{"title":"The effect of mandatory extraction payment disclosures on corporate tax avoidance: evidence from the United Kingdom","authors":"Sameh Kobbi-Fakhfakh, Fatma Driss","doi":"10.1080/17449480.2023.2290735","DOIUrl":"https://doi.org/10.1080/17449480.2023.2290735","url":null,"abstract":"The study investigates whether mandatory extraction payment disclosures (EPD), a policy intervention involving Country-by-Country Reporting (CbCR) in extractive industries, affects corporate tax av...","PeriodicalId":45647,"journal":{"name":"Accounting in Europe","volume":"28 1","pages":""},"PeriodicalIF":2.8,"publicationDate":"2023-12-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138685155","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: 10.1080/17449480.2023.2292654
Giuseppe Nicolò, Serena Santis, Alberto Incollingo, Paolo Tartaglia Polcini
This review systematically investigates the body of scientific knowledge on value relevance in accounting and reporting fields through a mixed method integrating bibliometric and systematic literat...
{"title":"Value Relevance Research in Accounting and Reporting Domains: A Bibliometric Analysis","authors":"Giuseppe Nicolò, Serena Santis, Alberto Incollingo, Paolo Tartaglia Polcini","doi":"10.1080/17449480.2023.2292654","DOIUrl":"https://doi.org/10.1080/17449480.2023.2292654","url":null,"abstract":"This review systematically investigates the body of scientific knowledge on value relevance in accounting and reporting fields through a mixed method integrating bibliometric and systematic literat...","PeriodicalId":45647,"journal":{"name":"Accounting in Europe","volume":"6 1","pages":""},"PeriodicalIF":2.8,"publicationDate":"2023-12-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138579871","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-09-20DOI: 10.1080/17449480.2023.2256059
Isabell Keller, Brigitte Eierle, Sven Hartlieb
ABSTRACTThis paper addresses the effects of clients’ carbon risk on audit pricing. Using data from 438 EU companies for the period 2013–2019, we find a positive relationship between carbon risk (measured by the level of carbon emissions) and audit fees. Furthermore, we find that participation in the European Union’s Emission Trading System, a limited market and regulation scheme to mitigate special industries’ Greenhouse Gas emissions, strengthens the positive relationship between carbon risk and audit fees. Insights from additional tests indicate that auditors price carbon risk particularly for large clients that are under greater public scrutiny and that the increase in fees rather stems from a risk premium charged by the auditor than higher audit effort. With interest in climate change developing rapidly across society, practice and research combined with the increasing importance of reducing carbon risk, our findings are timely and should thus appeal to a wide variety of recipients.Keywords: audit feesaudit riskcarbon riskGHG emissionEU emission trading system AcknowledgementsWe thank Max Göttsche, Francesco Mazzi, Frank Schiemann and seminar participants at the 17th Workshop on European Financial Reporting (EUFIN), University of Bamberg and University of Ingolstadt for valuable comments and suggestions. All errors remain our own.Disclosure StatementNo potential conflict of interest was reported by the authors.Notes1 In the context of sustainability reporting, Hummel and Szekely (Citation2022) have recently shown that not only financial stakeholders (e.g., analysts, investors, lenders) but also non-financial stakeholders (e.g., media, employees, customers) are important in building pressure on firms’ sustainability behavior.2 For further information and reference see: https://www.reuters.com/article/us-climate%20change-accounts-exclusive/exclusive-big-four-auditors-face-investor-calls-fortougher-climate-scrutiny-idUSKBN1Y21XK3 See for instance the results of the Yale Climate Opinion Survey, which are publicly available and discussed in Marlon et al. (Citation2022).4 However, it is important to note that regulation alone is not sufficient in increasing the awareness for climate change risks but that informal institutions like cultural-cognitive factors are also important (Panfilo & Krasodomska, Citation2022).5 Some studies more broadly define carbon risk a set of environmental risks which ‘describe any corporate risk related to climate change or the use of fossil fuels’ (Hoffmann & Busch, Citation2008, p. 514). According to this definition, carbon risk relates to firms’ reliance on fossil fuels and corresponding socio-political factors such as government-related measures and changes in consumer preferences, but also the direct physical effects of climate change (Jung et al., Citation2018). In this paper, we follow the definition by the FSB and understand carbon risk mainly as the indirect transitional risks from climate change for carbon-inten
{"title":"Auditors’ Carbon Risk Consideration under the EU Emission Trading System","authors":"Isabell Keller, Brigitte Eierle, Sven Hartlieb","doi":"10.1080/17449480.2023.2256059","DOIUrl":"https://doi.org/10.1080/17449480.2023.2256059","url":null,"abstract":"ABSTRACTThis paper addresses the effects of clients’ carbon risk on audit pricing. Using data from 438 EU companies for the period 2013–2019, we find a positive relationship between carbon risk (measured by the level of carbon emissions) and audit fees. Furthermore, we find that participation in the European Union’s Emission Trading System, a limited market and regulation scheme to mitigate special industries’ Greenhouse Gas emissions, strengthens the positive relationship between carbon risk and audit fees. Insights from additional tests indicate that auditors price carbon risk particularly for large clients that are under greater public scrutiny and that the increase in fees rather stems from a risk premium charged by the auditor than higher audit effort. With interest in climate change developing rapidly across society, practice and research combined with the increasing importance of reducing carbon risk, our findings are timely and should thus appeal to a wide variety of recipients.Keywords: audit feesaudit riskcarbon riskGHG emissionEU emission trading system AcknowledgementsWe thank Max Göttsche, Francesco Mazzi, Frank Schiemann and seminar participants at the 17th Workshop on European Financial Reporting (EUFIN), University of Bamberg and University of Ingolstadt for valuable comments and suggestions. All errors remain our own.Disclosure StatementNo potential conflict of interest was reported by the authors.Notes1 In the context of sustainability reporting, Hummel and Szekely (Citation2022) have recently shown that not only financial stakeholders (e.g., analysts, investors, lenders) but also non-financial stakeholders (e.g., media, employees, customers) are important in building pressure on firms’ sustainability behavior.2 For further information and reference see: https://www.reuters.com/article/us-climate%20change-accounts-exclusive/exclusive-big-four-auditors-face-investor-calls-fortougher-climate-scrutiny-idUSKBN1Y21XK3 See for instance the results of the Yale Climate Opinion Survey, which are publicly available and discussed in Marlon et al. (Citation2022).4 However, it is important to note that regulation alone is not sufficient in increasing the awareness for climate change risks but that informal institutions like cultural-cognitive factors are also important (Panfilo & Krasodomska, Citation2022).5 Some studies more broadly define carbon risk a set of environmental risks which ‘describe any corporate risk related to climate change or the use of fossil fuels’ (Hoffmann & Busch, Citation2008, p. 514). According to this definition, carbon risk relates to firms’ reliance on fossil fuels and corresponding socio-political factors such as government-related measures and changes in consumer preferences, but also the direct physical effects of climate change (Jung et al., Citation2018). In this paper, we follow the definition by the FSB and understand carbon risk mainly as the indirect transitional risks from climate change for carbon-inten","PeriodicalId":45647,"journal":{"name":"Accounting in Europe","volume":"44 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-09-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"136264754","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-09-07DOI: 10.1080/17449480.2023.2253808
Erlend Kvaal, Edgar Löw, Zoltán Novotny-Farkas, Argyro Panaretou, Annelies Renders, Peter Sampers
{"title":"Classification and Measurement under IFRS 9: A Commentary and Suggestions for Future Research","authors":"Erlend Kvaal, Edgar Löw, Zoltán Novotny-Farkas, Argyro Panaretou, Annelies Renders, Peter Sampers","doi":"10.1080/17449480.2023.2253808","DOIUrl":"https://doi.org/10.1080/17449480.2023.2253808","url":null,"abstract":"","PeriodicalId":45647,"journal":{"name":"Accounting in Europe","volume":" ","pages":""},"PeriodicalIF":2.8,"publicationDate":"2023-09-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42785801","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 : 2023-08-27DOI: 10.1080/17449480.2023.2251996
Abiot Tessema
{"title":"Does mandatory recognition of derivatives and hedging activities influence investors’ uncertainty and diversity of opinion? The moderating role of product market competition","authors":"Abiot Tessema","doi":"10.1080/17449480.2023.2251996","DOIUrl":"https://doi.org/10.1080/17449480.2023.2251996","url":null,"abstract":"","PeriodicalId":45647,"journal":{"name":"Accounting in Europe","volume":" ","pages":""},"PeriodicalIF":2.8,"publicationDate":"2023-08-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48848907","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 : 2023-08-20DOI: 10.1080/17449480.2023.2247410
Jere R. Francis
{"title":"What exactly do we mean by audit quality?","authors":"Jere R. Francis","doi":"10.1080/17449480.2023.2247410","DOIUrl":"https://doi.org/10.1080/17449480.2023.2247410","url":null,"abstract":"","PeriodicalId":45647,"journal":{"name":"Accounting in Europe","volume":"293 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-08-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135876938","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 : 2023-08-13DOI: 10.1080/17449480.2023.2244509
A. Rautiainen, Jani Saastamoinen, Kati Pajunen
Alternative performance measures (APMs) and alternative ways of presenting financial information pose a threat to the comparability of financial statement information and the assessment of alternative information may rouse increased professional skepticism (PS). The alternative performance measures or “alternative truths” presented in financial statements range from excluding few non-recurrent items to stating full “ non-IFRS”, “non - GAAP” or “ p ro forma” results. In a case where the presentation selected leads either to profit or loss, two differing figures may increase uncertainty in audit work and affect the perceived risks in the case. In this paper, we study how Finnish public auditors perceive audit work and professional skepticism related to APMs, with a survey (N=220) with statements focusing on the professional skepticism (PS) both generally (as a personal trait, trait skepticism ) and as case-specific state skepticism . We develop a measurement instrument for state skepticism. We find that state skepticism related to APMs is a largely separate component of professional (trait) skepticism. State skepticism seems to be helpful, together with considerations of the practical usefulness of those measures, in assessing APMs. Further, we find that auditors hold various views on APMs, and that search for knowledge seems a key feature in coping with APMs.
{"title":"Auditors’ perceptions of alternative performance measures – alternative truths and professional skepticism","authors":"A. Rautiainen, Jani Saastamoinen, Kati Pajunen","doi":"10.1080/17449480.2023.2244509","DOIUrl":"https://doi.org/10.1080/17449480.2023.2244509","url":null,"abstract":"Alternative performance measures (APMs) and alternative ways of presenting financial information pose a threat to the comparability of financial statement information and the assessment of alternative information may rouse increased professional skepticism (PS). The alternative performance measures or “alternative truths” presented in financial statements range from excluding few non-recurrent items to stating full “ non-IFRS”, “non - GAAP” or “ p ro forma” results. In a case where the presentation selected leads either to profit or loss, two differing figures may increase uncertainty in audit work and affect the perceived risks in the case. In this paper, we study how Finnish public auditors perceive audit work and professional skepticism related to APMs, with a survey (N=220) with statements focusing on the professional skepticism (PS) both generally (as a personal trait, trait skepticism ) and as case-specific state skepticism . We develop a measurement instrument for state skepticism. We find that state skepticism related to APMs is a largely separate component of professional (trait) skepticism. State skepticism seems to be helpful, together with considerations of the practical usefulness of those measures, in assessing APMs. Further, we find that auditors hold various views on APMs, and that search for knowledge seems a key feature in coping with APMs.","PeriodicalId":45647,"journal":{"name":"Accounting in Europe","volume":" ","pages":""},"PeriodicalIF":2.8,"publicationDate":"2023-08-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49582310","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 : 2023-08-11DOI: 10.1080/17449480.2023.2241871
Frederik Verplancke, Stefanie De Bruyckere, P. Everaert, Carine Coppens, Eva Blondeel
{"title":"Small and Medium-Sized Accounting Practices (SMPs): Explaining Financial Performance based on Human Capital and Organisational Resources","authors":"Frederik Verplancke, Stefanie De Bruyckere, P. Everaert, Carine Coppens, Eva Blondeel","doi":"10.1080/17449480.2023.2241871","DOIUrl":"https://doi.org/10.1080/17449480.2023.2241871","url":null,"abstract":"","PeriodicalId":45647,"journal":{"name":"Accounting in Europe","volume":" ","pages":""},"PeriodicalIF":2.8,"publicationDate":"2023-08-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41480841","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 : 2023-07-19DOI: 10.1080/17449480.2023.2237056
M. Bengtsson, D. Argento
Abstract By bridging the two main approaches examining de jure adoption of IFRS, namely, convergence and divergence studies, we provide a framework that more fully captures the totality, dynamics, and complexity of voluntary adoption of IFRS by country. The framework offers an understanding of accounting regulators’ efforts to balance between pressure to adopt IFRS and national specific conditions that may conflict with IFRS requirements. The suggested framework depicts four propositions which are built on four institutional dimensions: the degree of IFRS diffusion, national accounting system compatibility with IFRS, country dependence on external financing, and accounting regulator’s international networking. These four propositions jointly predict national adoption level of IFRS, ranging from non-adoption to partial adoption, and to full adoption. The framework assumes that the current IFRS adoption status by country is not static and may change over time. The voluntary adoption of IFRS standards by country is understood as the result of tradeoffs among multiple factors. In doing so, the developed framework solves a theoretical dichotomy in IFRS studies: the tendency of using institutional isomorphism to examine convergence versus accounting classification to understand divergence.
{"title":"International Accounting Convergence and Divergence: Towards a Framework for Understanding De Jure Adoption of IFRS","authors":"M. Bengtsson, D. Argento","doi":"10.1080/17449480.2023.2237056","DOIUrl":"https://doi.org/10.1080/17449480.2023.2237056","url":null,"abstract":"Abstract\u0000 By bridging the two main approaches examining de jure adoption of IFRS, namely, convergence and divergence studies, we provide a framework that more fully captures the totality, dynamics, and complexity of voluntary adoption of IFRS by country. The framework offers an understanding of accounting regulators’ efforts to balance between pressure to adopt IFRS and national specific conditions that may conflict with IFRS requirements. The suggested framework depicts four propositions which are built on four institutional dimensions: the degree of IFRS diffusion, national accounting system compatibility with IFRS, country dependence on external financing, and accounting regulator’s international networking. These four propositions jointly predict national adoption level of IFRS, ranging from non-adoption to partial adoption, and to full adoption. The framework assumes that the current IFRS adoption status by country is not static and may change over time. The voluntary adoption of IFRS standards by country is understood as the result of tradeoffs among multiple factors. In doing so, the developed framework solves a theoretical dichotomy in IFRS studies: the tendency of using institutional isomorphism to examine convergence versus accounting classification to understand divergence.","PeriodicalId":45647,"journal":{"name":"Accounting in Europe","volume":" ","pages":""},"PeriodicalIF":2.8,"publicationDate":"2023-07-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44348974","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 : 2023-07-13DOI: 10.1080/17449480.2023.2231964
Cédric Poretti, Tiphaine Jérôme, Carl Brousseau
Abstract In this paper, we investigate the earnings management behavior of listed family firms holding the name of the family (eponymous FF). Specifically, we use a Swiss sample of 1,544 firm-year observations from 2006 to 2018 to examine the association of eponymous FF with accrual-based earnings management in general, and identify circumstances where this association does not hold. First, we find that, on average, eponymous FF exhibit less earnings management than non-FF. Second, we exploit a Swiss-specific option to voluntarily turn away from IFRS to local GAAP. Using a difference-in-differences approach, we find that eponymous FF exhibit higher levels of earnings management immediately after the switch. Finally, we show that eponymous FF exhibit higher earnings management when the family is directly involved in the board of directors or the managing board. Our findings provide a more nuanced understanding of the effects of family identification on earnings management incentives in listed firms.
{"title":"Family identification and earnings management in listed firms","authors":"Cédric Poretti, Tiphaine Jérôme, Carl Brousseau","doi":"10.1080/17449480.2023.2231964","DOIUrl":"https://doi.org/10.1080/17449480.2023.2231964","url":null,"abstract":"Abstract In this paper, we investigate the earnings management behavior of listed family firms holding the name of the family (eponymous FF). Specifically, we use a Swiss sample of 1,544 firm-year observations from 2006 to 2018 to examine the association of eponymous FF with accrual-based earnings management in general, and identify circumstances where this association does not hold. First, we find that, on average, eponymous FF exhibit less earnings management than non-FF. Second, we exploit a Swiss-specific option to voluntarily turn away from IFRS to local GAAP. Using a difference-in-differences approach, we find that eponymous FF exhibit higher levels of earnings management immediately after the switch. Finally, we show that eponymous FF exhibit higher earnings management when the family is directly involved in the board of directors or the managing board. Our findings provide a more nuanced understanding of the effects of family identification on earnings management incentives in listed firms.","PeriodicalId":45647,"journal":{"name":"Accounting in Europe","volume":" ","pages":""},"PeriodicalIF":2.8,"publicationDate":"2023-07-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42453098","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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