Pub Date : 2023-01-10DOI: 10.1108/jal-08-2022-0084
C. Cai
PurposeIn the presence of “real effects” of disclosure in a production economy, this research aims to investigate the link between disclosure and cost of capital relating to different time periods: namely the post-disclosure cost of capital (the cost of capital subsequent to disclosure), the pre-disclosure cost of capital (the cost of capital for the period leading up to disclosure) and the overall cost of capital (the cost of capital across both periods). The author also extends the analysis to whether and how in the presence of a real effect of disclosure, investors' ex ante welfare might be affected.Design/methodology/approachThis research is conducted via stylized models.FindingsThe author demonstrates that, first, in contrast to findings in a pure-exchange economy, in a production-based economy where disclosure affects firms' investment decisions, both the overall cost of capital and the investors' ex ante welfare can be affected by disclosure quality. As disclosure quality improves, the post-disclosure cost of capital may either increase or decrease, as may the pre-disclosure cost of capital. The change in the post-disclosure cost of capital is not fully offset by the change in the pre-disclosure cost of capital, and therefore the overall cost of capital can either increase or decrease. Second, a firm's profitability of existing and new production are critical factors in determining whether cost of capital increases or decreases with disclosure quality. The author characterizes conditions under which higher disclosure quality increases or decreases the disclosing firm's cost of capital over different time periods. Third, when disclosure affects interrelated firms' production decisions, the disclosing firm's overall cost of capital changes with disclosure quality, even when the marginal (unconditional) distribution of the disclosing firm's cash flow is not affected by the disclosure.Originality/valueThis research contributes to a largely unexplored but important area: the real effect of disclosure on the cost of capital.
{"title":"A real effect across time: disclosure quality, cost of capital and profitability","authors":"C. Cai","doi":"10.1108/jal-08-2022-0084","DOIUrl":"https://doi.org/10.1108/jal-08-2022-0084","url":null,"abstract":"PurposeIn the presence of “real effects” of disclosure in a production economy, this research aims to investigate the link between disclosure and cost of capital relating to different time periods: namely the post-disclosure cost of capital (the cost of capital subsequent to disclosure), the pre-disclosure cost of capital (the cost of capital for the period leading up to disclosure) and the overall cost of capital (the cost of capital across both periods). The author also extends the analysis to whether and how in the presence of a real effect of disclosure, investors' ex ante welfare might be affected.Design/methodology/approachThis research is conducted via stylized models.FindingsThe author demonstrates that, first, in contrast to findings in a pure-exchange economy, in a production-based economy where disclosure affects firms' investment decisions, both the overall cost of capital and the investors' ex ante welfare can be affected by disclosure quality. As disclosure quality improves, the post-disclosure cost of capital may either increase or decrease, as may the pre-disclosure cost of capital. The change in the post-disclosure cost of capital is not fully offset by the change in the pre-disclosure cost of capital, and therefore the overall cost of capital can either increase or decrease. Second, a firm's profitability of existing and new production are critical factors in determining whether cost of capital increases or decreases with disclosure quality. The author characterizes conditions under which higher disclosure quality increases or decreases the disclosing firm's cost of capital over different time periods. Third, when disclosure affects interrelated firms' production decisions, the disclosing firm's overall cost of capital changes with disclosure quality, even when the marginal (unconditional) distribution of the disclosing firm's cash flow is not affected by the disclosure.Originality/valueThis research contributes to a largely unexplored but important area: the real effect of disclosure on the cost of capital.","PeriodicalId":45666,"journal":{"name":"Journal of Accounting Literature","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2023-01-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46733233","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 : 2022-12-23DOI: 10.1108/jal-08-2022-0083
C. Cai
PurposeThe author in this paper identifies the gap between analytical and empirical studies regarding the relation between disclosure and cost of capital. Distinct from prior reviews, this paper focuses on the various assumptions of theoretical models and the insights and key results derived from those assumptions. The author also reviews how these theoretical papers are “applied” in empirical studies.Design/methodology/approachThe author systematically analyzes both theoretical and empirical papers that investigate disclosure and cost of capital between 2000 and 2020.FindingsThe author shows (1) that there is ample room for theorists to move from the pure exchange economy to the production-based economy setting to investigate the real effect of disclosure on the cost of capital; (2) structural estimation, although still nascent, is a promising direction to build the bridge between analytical and empirical studies in disclosure and cost of capital, and (3) besides ordinary least squares (OLS) regressions, researchers are encouraged to think outside the box regarding how to investigate the interplay between disclosure and cost of capital via a Deep Neural Network design.Originality/valueThe author provides a unique perspective and synthesized knowledge in the relations of disclosure and cost of capital.
{"title":"Filling the gap and moving forward: a review of analytical and empirical studies of disclosure and cost of capital","authors":"C. Cai","doi":"10.1108/jal-08-2022-0083","DOIUrl":"https://doi.org/10.1108/jal-08-2022-0083","url":null,"abstract":"PurposeThe author in this paper identifies the gap between analytical and empirical studies regarding the relation between disclosure and cost of capital. Distinct from prior reviews, this paper focuses on the various assumptions of theoretical models and the insights and key results derived from those assumptions. The author also reviews how these theoretical papers are “applied” in empirical studies.Design/methodology/approachThe author systematically analyzes both theoretical and empirical papers that investigate disclosure and cost of capital between 2000 and 2020.FindingsThe author shows (1) that there is ample room for theorists to move from the pure exchange economy to the production-based economy setting to investigate the real effect of disclosure on the cost of capital; (2) structural estimation, although still nascent, is a promising direction to build the bridge between analytical and empirical studies in disclosure and cost of capital, and (3) besides ordinary least squares (OLS) regressions, researchers are encouraged to think outside the box regarding how to investigate the interplay between disclosure and cost of capital via a Deep Neural Network design.Originality/valueThe author provides a unique perspective and synthesized knowledge in the relations of disclosure and cost of capital.","PeriodicalId":45666,"journal":{"name":"Journal of Accounting Literature","volume":"1 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-12-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41960876","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 : 2022-12-14DOI: 10.1108/jal-08-2022-0091
Ha Nguyen, Xian Zhou
PurposeThis paper aims to provide an overview, a classification of existing research groups for correlated default models using a reduced-form method and an identification of future research opportunities in the field.Design/methodology/approachA systematic literature review is used for the identification, selection, evaluation and synthesis of relevant literature using keywords regarding the reduced-form default models in the Web of Science database. The authors also add articles from cross-referencing and expert recommendations to the literature. HistCite™ program is used to generate a citation map of the literature.FindingsThe results show that reduced-form correlated default risk models are developing towards modelling credit risk with both observable and unobservable variables. The frailty correlated default model at the firm level is still a potential research field.Originality/valueThis is the first paper systematically reviewing the research on reduced-form models of default timing.
目的本文旨在使用简化形式方法对相关违约模型的现有研究小组进行概述、分类，并确定该领域未来的研究机会。设计/方法/方法系统的文献综述用于识别、选择、评估和综合相关文献，使用与Web of Science数据库中的简化形式默认模型有关的关键词。作者还将交叉引用和专家推荐的文章添加到文献中。HistCite™ 该程序用于生成文献的引文地图。研究结果表明，降阶相关违约风险模型正朝着同时具有可观察变量和不可观察变量的信用风险建模方向发展。企业层面的脆弱性相关违约模型仍然是一个潜在的研究领域。独创性/价值这是第一篇系统地回顾违约时间简化模型研究的论文。
{"title":"Reduced-form models of correlated default timing: a systematic literature review","authors":"Ha Nguyen, Xian Zhou","doi":"10.1108/jal-08-2022-0091","DOIUrl":"https://doi.org/10.1108/jal-08-2022-0091","url":null,"abstract":"PurposeThis paper aims to provide an overview, a classification of existing research groups for correlated default models using a reduced-form method and an identification of future research opportunities in the field.Design/methodology/approachA systematic literature review is used for the identification, selection, evaluation and synthesis of relevant literature using keywords regarding the reduced-form default models in the Web of Science database. The authors also add articles from cross-referencing and expert recommendations to the literature. HistCite™ program is used to generate a citation map of the literature.FindingsThe results show that reduced-form correlated default risk models are developing towards modelling credit risk with both observable and unobservable variables. The frailty correlated default model at the firm level is still a potential research field.Originality/valueThis is the first paper systematically reviewing the research on reduced-form models of default timing.","PeriodicalId":45666,"journal":{"name":"Journal of Accounting Literature","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-12-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46797063","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 : 2022-12-08DOI: 10.1108/jal-03-2022-0033
Minna Martikainen, Antti Miihkinen, Luke Watson
PurposeNegative disclosure tone in 10-K annual reports has economic consequences, yet relatively little is known about how it is generated. Boards of directors play an important governance role with respect to mandatory disclosures and personally sign off on Form 10-K, leading us to expect directors to influence financial reporting narratives. This study investigates whether the negative tone of firms' narrative annual report disclosures is associated with the human and social capital of its board of directors.Design/methodology/approachMultivariate regression analyses of negative disclosure tone (Loughran and McDonald, 2011) on board members' average age, gender, education, financial expertise and turnover is performed. A host of supplemental tests to corroborate our primary analysis, including using Sarbanes-Oxley's financial expert mandate as an exogenous shock to board composition, impact threshold for a confounding variable, placebo analysis, portfolio tests of more and less negative disclosing firms and portfolio tests of “loud” versus “quiet” boards are conducted.FindingsEvidence that directors' gender, education, financial expertise and board turnover are associated with more negative disclosure tone, while directors' age is associated with less negative disclosure tone is found. The study also looked within the board to differentiate whether these findings are driven by characteristics of inside directors or outside directors serving on the audit committee, or both, as these are the specific groups of directors we would expect to play a role in disclosure. It was found that negative disclosure tone is associated with a lower bid-ask spread, so this study interpreted more negative tone as containing more descriptive information.Originality/valueThis study helps decode the “black box” of annual report disclosure tone, which Loughran and McDonald (2011) show has important economic implications. The results help inform stakeholders such as policymakers, executives and capital market participants as to how board member traits are associated with disclosure. The findings are particularly important as this study bears witness to the increasing prominence of gender/diversity mandates (e.g. Israel, Norway, California) and financial expertise mandates (e.g. Sarbanes-Oxley).
10-K年度报告中的负面披露基调会产生经济后果，但人们对其产生的原因知之甚少。董事会在强制性披露方面发挥着重要的治理作用，并亲自签署10-K表格，这使我们期望董事能够影响财务报告的叙述。本研究探讨了公司年报披露的负面基调是否与董事会的人力资本和社会资本有关。设计/方法/方法消极披露语气(Loughran and McDonald, 2011)对董事会成员的平均年龄、性别、教育程度、财务专业知识和离职率进行了多元回归分析。为了证实我们的主要分析，我们进行了一系列补充测试，包括使用萨班斯-奥克斯利法案(Sarbanes-Oxley)的金融专家授权作为对董事会构成的外生冲击、混淆变量的影响阈值、安慰剂分析、对更多和更少负面披露公司的投资组合测试，以及对“大声”与“安静”董事会的投资组合测试。发现董事性别、受教育程度、财务专业知识和董事会更替与负面信息披露语气的增加有关，而年龄与负面信息披露语气的减少有关。该研究还对董事会内部进行了调查，以区分这些发现是由内部董事的特征驱动的，还是由在审计委员会任职的外部董事的特征驱动的，或者两者兼而有之，因为这些是我们期望在披露中发挥作用的特定董事群体。研究发现，消极的披露语气与较低的买卖价差相关，因此本研究将更多的消极语气解释为包含更多的描述性信息。原创性/价值本研究有助于解读年度报告披露基调的“黑箱”，Loughran和McDonald(2011)认为这具有重要的经济意义。研究结果有助于决策者、高管和资本市场参与者等利益相关者了解董事会成员的特质与信息披露之间的关系。这些发现尤其重要，因为这项研究证明了性别/多样性任务(如以色列、挪威、加利福尼亚)和金融专业知识任务(如萨班斯-奥克斯利法案)日益突出。
{"title":"Board characteristics and negative disclosure tone","authors":"Minna Martikainen, Antti Miihkinen, Luke Watson","doi":"10.1108/jal-03-2022-0033","DOIUrl":"https://doi.org/10.1108/jal-03-2022-0033","url":null,"abstract":"PurposeNegative disclosure tone in 10-K annual reports has economic consequences, yet relatively little is known about how it is generated. Boards of directors play an important governance role with respect to mandatory disclosures and personally sign off on Form 10-K, leading us to expect directors to influence financial reporting narratives. This study investigates whether the negative tone of firms' narrative annual report disclosures is associated with the human and social capital of its board of directors.Design/methodology/approachMultivariate regression analyses of negative disclosure tone (Loughran and McDonald, 2011) on board members' average age, gender, education, financial expertise and turnover is performed. A host of supplemental tests to corroborate our primary analysis, including using Sarbanes-Oxley's financial expert mandate as an exogenous shock to board composition, impact threshold for a confounding variable, placebo analysis, portfolio tests of more and less negative disclosing firms and portfolio tests of “loud” versus “quiet” boards are conducted.FindingsEvidence that directors' gender, education, financial expertise and board turnover are associated with more negative disclosure tone, while directors' age is associated with less negative disclosure tone is found. The study also looked within the board to differentiate whether these findings are driven by characteristics of inside directors or outside directors serving on the audit committee, or both, as these are the specific groups of directors we would expect to play a role in disclosure. It was found that negative disclosure tone is associated with a lower bid-ask spread, so this study interpreted more negative tone as containing more descriptive information.Originality/valueThis study helps decode the “black box” of annual report disclosure tone, which Loughran and McDonald (2011) show has important economic implications. The results help inform stakeholders such as policymakers, executives and capital market participants as to how board member traits are associated with disclosure. The findings are particularly important as this study bears witness to the increasing prominence of gender/diversity mandates (e.g. Israel, Norway, California) and financial expertise mandates (e.g. Sarbanes-Oxley).","PeriodicalId":45666,"journal":{"name":"Journal of Accounting Literature","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-12-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48247682","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 : 2022-11-21DOI: 10.1108/jal-02-2022-0027
Stavros Degiannakis, G. Giannopoulos, Salma Ibrahim, B. Jorgensen
PurposeThe authors propose an alternative robust technique to test for discontinuities in distributions and provide consistent evidence of discontinuities around zero for both scaled and unscaled earnings levels and changes. The advantage of the proposed test is that it does not rely on arbitrary choice of bin width choices.Design/methodology/approachTo evaluate the power of the test, the authors examine the density function of non-discretionary earnings and detect no evidence of discontinuities around zero in levels and changes of these non-discretionary earnings. As robustness, the authors use pre-managed earnings excluding accrual and real manipulation and find similar evidence.FindingsThe finding using our technique support the Burgstahler and Dichev (1997) interpretation on earnings management, even for smaller sample sizes and reject the theory that discontinuities arise from scaling and sampling methods.Originality/valueThe study provides an overview of those studies that support and those that oppose using “testing for discontinuities” as a way to examine earnings management. The authors advance the literature by providing an alternative methodology supporting the view that the kink in the distribution represents earnings management.
{"title":"An alternative approach to detect earnings management to meet or beat benchmarks","authors":"Stavros Degiannakis, G. Giannopoulos, Salma Ibrahim, B. Jorgensen","doi":"10.1108/jal-02-2022-0027","DOIUrl":"https://doi.org/10.1108/jal-02-2022-0027","url":null,"abstract":"PurposeThe authors propose an alternative robust technique to test for discontinuities in distributions and provide consistent evidence of discontinuities around zero for both scaled and unscaled earnings levels and changes. The advantage of the proposed test is that it does not rely on arbitrary choice of bin width choices.Design/methodology/approachTo evaluate the power of the test, the authors examine the density function of non-discretionary earnings and detect no evidence of discontinuities around zero in levels and changes of these non-discretionary earnings. As robustness, the authors use pre-managed earnings excluding accrual and real manipulation and find similar evidence.FindingsThe finding using our technique support the Burgstahler and Dichev (1997) interpretation on earnings management, even for smaller sample sizes and reject the theory that discontinuities arise from scaling and sampling methods.Originality/valueThe study provides an overview of those studies that support and those that oppose using “testing for discontinuities” as a way to examine earnings management. The authors advance the literature by providing an alternative methodology supporting the view that the kink in the distribution represents earnings management.","PeriodicalId":45666,"journal":{"name":"Journal of Accounting Literature","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-11-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44476151","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 : 2022-11-14DOI: 10.1108/jal-03-2022-0039
Damian J. Bridge
PurposeThis paper builds on the findings of Bridge (2021) and attempts to understand the major ethical, equity, and leadership issues that may arise when governments plan massive infrastructure and amelioration programs such as the United States’ Green New Deal (GND). The methodology developed here could be applied to the plans being created in other developed countries such as Canada and Korea.Design/methodology/approachA qualitative approach was used to analyse the ethical issues associated with the Green New Deal via semi-structured interviews with 34 published authors of academic articles dealing with the ethics of climate change. Two industry experts were also consulted for reference.FindingsThis paper identifies three key themes arising from the proposed implementation of the Green New Deal. Firstly, the GND has the potential to present equity, justice, and ethical issues that must be considered as part of any intended adoption. Secondly, the GND will present opportunities for economic and climate success, but some groups may suffer due to its implementation. Thirdly, those that have the capacity, wealth, leadership, and ability should lead climate change initiatives. This may require market solutions in the short-term to reach 2050 net zero targets.Originality/valueThis paper is the first qualitative study undertaken on the Green New Deal, contributing to the development of the scant literature on this topic and also informing the practical implementation of wholesale infrastructure plans.
{"title":"The ethics of climate change and the green new deal: a qualitative study","authors":"Damian J. Bridge","doi":"10.1108/jal-03-2022-0039","DOIUrl":"https://doi.org/10.1108/jal-03-2022-0039","url":null,"abstract":"PurposeThis paper builds on the findings of Bridge (2021) and attempts to understand the major ethical, equity, and leadership issues that may arise when governments plan massive infrastructure and amelioration programs such as the United States’ Green New Deal (GND). The methodology developed here could be applied to the plans being created in other developed countries such as Canada and Korea.Design/methodology/approachA qualitative approach was used to analyse the ethical issues associated with the Green New Deal via semi-structured interviews with 34 published authors of academic articles dealing with the ethics of climate change. Two industry experts were also consulted for reference.FindingsThis paper identifies three key themes arising from the proposed implementation of the Green New Deal. Firstly, the GND has the potential to present equity, justice, and ethical issues that must be considered as part of any intended adoption. Secondly, the GND will present opportunities for economic and climate success, but some groups may suffer due to its implementation. Thirdly, those that have the capacity, wealth, leadership, and ability should lead climate change initiatives. This may require market solutions in the short-term to reach 2050 net zero targets.Originality/valueThis paper is the first qualitative study undertaken on the Green New Deal, contributing to the development of the scant literature on this topic and also informing the practical implementation of wholesale infrastructure plans.","PeriodicalId":45666,"journal":{"name":"Journal of Accounting Literature","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-11-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49359503","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 : 2022-11-08DOI: 10.1108/jal-06-2022-0067
Andrew C. Stuart, Stephen H. Fuller, Nicole M. Heron, Tracey J. Riley
PurposeThis paper aims to review and synthesize the corporate social responsibility (CSR) disclosure literature in order to (1) develop a comprehensive definition of disclosure quality; (2) review the evolution of disclosure quality proxies used by accounting researchers; (3) describe the antecedents to disclosure quality; (4) describe the outcomes of disclosure quality; and (5) identify gaps in the current literature and offer suggestions for future research.Design/methodology/approachThis study conducted a systematic review capturing articles examining CSR disclosure quality. The researchers first searched EBSCO, identifying all relevant articles by searching for “corporate social responsibility,” “CSR,” “ESG” and “sustainability reporting” anywhere in the article. Then, the results were filtered to focus on 23 of the most prominent accounting journals. The search resulted in 592 articles which were individually reviewed for relevance to the authors’ review. This study includes all articles that examine disclosure and provide insight into elements that influence disclosure quality or provide evidence of the effects of disclosure quality on user decision-making.FindingsIt is found that a comprehensive definition of CSR disclosure quality has yet to be developed and that proxies for CSR disclosure quality have evolved over time. This study synthesizes the literature on the antecedents of CSR disclosure quality, and how CSR disclosure quality affects users' decision-making and related outcomes. Overall, the review of this study suggests that assurance and a number of corporate features have important effects on disclosure quality. Also, high-quality disclosures are positively associated with many benefits to market participants.Originality/valueThis study complements Huang and Watson's (2015) CSR literature review by comprehensively reviewing and synthesizing the CSR disclosure quality literature that was only emerging when their review was published. Importantly, this study contributes to the CSR disclosure literature by developing a comprehensive definition of CSR disclosure quality that is grounded in the accounting literature and aligned with current frameworks.
{"title":"Defining CSR disclosure quality: a review and synthesis of the accounting literature","authors":"Andrew C. Stuart, Stephen H. Fuller, Nicole M. Heron, Tracey J. Riley","doi":"10.1108/jal-06-2022-0067","DOIUrl":"https://doi.org/10.1108/jal-06-2022-0067","url":null,"abstract":"PurposeThis paper aims to review and synthesize the corporate social responsibility (CSR) disclosure literature in order to (1) develop a comprehensive definition of disclosure quality; (2) review the evolution of disclosure quality proxies used by accounting researchers; (3) describe the antecedents to disclosure quality; (4) describe the outcomes of disclosure quality; and (5) identify gaps in the current literature and offer suggestions for future research.Design/methodology/approachThis study conducted a systematic review capturing articles examining CSR disclosure quality. The researchers first searched EBSCO, identifying all relevant articles by searching for “corporate social responsibility,” “CSR,” “ESG” and “sustainability reporting” anywhere in the article. Then, the results were filtered to focus on 23 of the most prominent accounting journals. The search resulted in 592 articles which were individually reviewed for relevance to the authors’ review. This study includes all articles that examine disclosure and provide insight into elements that influence disclosure quality or provide evidence of the effects of disclosure quality on user decision-making.FindingsIt is found that a comprehensive definition of CSR disclosure quality has yet to be developed and that proxies for CSR disclosure quality have evolved over time. This study synthesizes the literature on the antecedents of CSR disclosure quality, and how CSR disclosure quality affects users' decision-making and related outcomes. Overall, the review of this study suggests that assurance and a number of corporate features have important effects on disclosure quality. Also, high-quality disclosures are positively associated with many benefits to market participants.Originality/valueThis study complements Huang and Watson's (2015) CSR literature review by comprehensively reviewing and synthesizing the CSR disclosure quality literature that was only emerging when their review was published. Importantly, this study contributes to the CSR disclosure literature by developing a comprehensive definition of CSR disclosure quality that is grounded in the accounting literature and aligned with current frameworks.","PeriodicalId":45666,"journal":{"name":"Journal of Accounting Literature","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-11-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43685418","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 : 2022-10-18DOI: 10.1108/jal-01-2022-0013
Amitava Saha
PurposeThis paper presents a systematic literature review, including content and bibliometric analyses, of the impact of a crisis on financial reporting quality. In addition, this review identifies emerging research themes and provides future directions.Design/methodology/approachThe adopted systematic literature review approach finds 29 highly cited articles on the effect of a crisis on financial reporting quality, with an additional seven studies for analysis identified in a review of emerging literature.FindingsThis study consolidates prior research findings on financial reporting quality during a crisis under four major themes: (1) earnings quality and its determinants; (2) audit quality around a crisis; (3) conservatism, valuation effects and corporate governance; and (4) financial stability and regulations. Mixed and inconclusive findings are documented for most themes, suggesting that this literature is still in its infancy and that room exists for further theoretical refinement.Practical implicationsThe study's findings potentially have important ramifications for managers, standard setters, government regulators and policymakers. By highlighting examples of changes in firms' reporting practices during a crisis, the study provides a context in which to understand the influence or potential influence of the current coronavirus (COVID-19) pandemic on firms' financial reporting practices.Originality/valueTo the best of the author's knowledge, this is the first study to systematically review and synthesise prior research findings on the quality of financial reporting during economic crises. The study identifies many unexplored research areas regarding crises, with possible direct implications for financial reporting practices. The impact of these issues needs to be carefully considered and understood, with the current coronavirus pandemic demonstrating that firms have the opportunity to compromise ethical aspects of their decisions as they experience pressure to maximise profits.
{"title":"Financial reporting quality during a crisis: a systematic review","authors":"Amitava Saha","doi":"10.1108/jal-01-2022-0013","DOIUrl":"https://doi.org/10.1108/jal-01-2022-0013","url":null,"abstract":"PurposeThis paper presents a systematic literature review, including content and bibliometric analyses, of the impact of a crisis on financial reporting quality. In addition, this review identifies emerging research themes and provides future directions.Design/methodology/approachThe adopted systematic literature review approach finds 29 highly cited articles on the effect of a crisis on financial reporting quality, with an additional seven studies for analysis identified in a review of emerging literature.FindingsThis study consolidates prior research findings on financial reporting quality during a crisis under four major themes: (1) earnings quality and its determinants; (2) audit quality around a crisis; (3) conservatism, valuation effects and corporate governance; and (4) financial stability and regulations. Mixed and inconclusive findings are documented for most themes, suggesting that this literature is still in its infancy and that room exists for further theoretical refinement.Practical implicationsThe study's findings potentially have important ramifications for managers, standard setters, government regulators and policymakers. By highlighting examples of changes in firms' reporting practices during a crisis, the study provides a context in which to understand the influence or potential influence of the current coronavirus (COVID-19) pandemic on firms' financial reporting practices.Originality/valueTo the best of the author's knowledge, this is the first study to systematically review and synthesise prior research findings on the quality of financial reporting during economic crises. The study identifies many unexplored research areas regarding crises, with possible direct implications for financial reporting practices. The impact of these issues needs to be carefully considered and understood, with the current coronavirus pandemic demonstrating that firms have the opportunity to compromise ethical aspects of their decisions as they experience pressure to maximise profits.","PeriodicalId":45666,"journal":{"name":"Journal of Accounting Literature","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-10-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46466094","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 : 2022-10-06DOI: 10.1108/jal-08-2022-0085
Zijian Cheng, Z. Liu, Jiaxin Xie
PurposeDoes the choice of listing process matter in determining a firm's future crash risk? It is understood that the main function of an equity market is to provide price discovery, however, it is not clear whether the choice of listing methods would matter to the shareholders' wealth in the long term. We are the first to answer this question by utilising a hand-collected dataset that identifies all companies that went public via reverse merger (RM) in a growing emerging market.Design/methodology/approachUsing hand-collected data from 2000 to 2018 in China, we follow the literature to construct two crash risk measures for RM and IPO firms. Our main analysis is performed using OLS regressions on the full sample as well as a sample using Propensity Score Matching. Our results hold with a number of robustness checks.FindingsWe find that reverse merger (RM) firms exhibit higher future stock price crash risk than initial public offering (IPO) firms. This relationship is more predominant in non-state-owned enterprises, and we find weak evidence suggesting such relationship weakens as firms stay longer in the market. There is no significant difference in future stock price crash risk between RM firms listed during IPO suspension periods and normal IPO firms.Originality/valueWe are the first to study the choice of listing method and its impact on firms' future stock price crash risk.
{"title":"Reverse mergers and stock price crash risk: evidence from China","authors":"Zijian Cheng, Z. Liu, Jiaxin Xie","doi":"10.1108/jal-08-2022-0085","DOIUrl":"https://doi.org/10.1108/jal-08-2022-0085","url":null,"abstract":"PurposeDoes the choice of listing process matter in determining a firm's future crash risk? It is understood that the main function of an equity market is to provide price discovery, however, it is not clear whether the choice of listing methods would matter to the shareholders' wealth in the long term. We are the first to answer this question by utilising a hand-collected dataset that identifies all companies that went public via reverse merger (RM) in a growing emerging market.Design/methodology/approachUsing hand-collected data from 2000 to 2018 in China, we follow the literature to construct two crash risk measures for RM and IPO firms. Our main analysis is performed using OLS regressions on the full sample as well as a sample using Propensity Score Matching. Our results hold with a number of robustness checks.FindingsWe find that reverse merger (RM) firms exhibit higher future stock price crash risk than initial public offering (IPO) firms. This relationship is more predominant in non-state-owned enterprises, and we find weak evidence suggesting such relationship weakens as firms stay longer in the market. There is no significant difference in future stock price crash risk between RM firms listed during IPO suspension periods and normal IPO firms.Originality/valueWe are the first to study the choice of listing method and its impact on firms' future stock price crash risk.","PeriodicalId":45666,"journal":{"name":"Journal of Accounting Literature","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-10-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45341511","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 : 2022-10-04DOI: 10.1108/jal-08-2022-0087
Summer Xia
PurposeThe global transition into clean energy demands a re-examination of the link between fossil fuels and clean energy markets. This paper aims to identify the key research areas about clean energy and fossil fuels and outlines emerging themes for future research.Design/methodology/approachThis paper uses bibliographic mapping to identify the most influential publications among 500 articles published between 1991 and 2022 (as of March 2022). The first step is the identification of literature for inclusion and data cleaning. Next is producing a citation map using Bibliometrix for analysis and synthesis.FindingsThe research on clean energy and fossil fuels has developed into three areas by examining their dynamic causality, return/risk spillovers, and volatility spillovers. However, pr evious studies focus on the oil and clean energy market, and limited studies examine the market linkage. As a result, market linkage presents a challenge in front of energy transition into a green economy.Originality/valueThis paper makes a clear contribution to the literature by identifying the important existing and emerging research areas on the clean energy and fossil fuels market.
{"title":"The link and spillovers between clean energy and fossil fuels market: a systematic literature review","authors":"Summer Xia","doi":"10.1108/jal-08-2022-0087","DOIUrl":"https://doi.org/10.1108/jal-08-2022-0087","url":null,"abstract":"PurposeThe global transition into clean energy demands a re-examination of the link between fossil fuels and clean energy markets. This paper aims to identify the key research areas about clean energy and fossil fuels and outlines emerging themes for future research.Design/methodology/approachThis paper uses bibliographic mapping to identify the most influential publications among 500 articles published between 1991 and 2022 (as of March 2022). The first step is the identification of literature for inclusion and data cleaning. Next is producing a citation map using Bibliometrix for analysis and synthesis.FindingsThe research on clean energy and fossil fuels has developed into three areas by examining their dynamic causality, return/risk spillovers, and volatility spillovers. However, pr evious studies focus on the oil and clean energy market, and limited studies examine the market linkage. As a result, market linkage presents a challenge in front of energy transition into a green economy.Originality/valueThis paper makes a clear contribution to the literature by identifying the important existing and emerging research areas on the clean energy and fossil fuels market.","PeriodicalId":45666,"journal":{"name":"Journal of Accounting Literature","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-10-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47157659","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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