Pacific Accounting Review最新文献

Purpose

Extant studies propose music sentiment as a novel measure of individuals’ sentiment. These studies argue that individuals’ choice of music reflects their emotional condition in real time and influences their cognitive ability, making it a powerful tool for assessing their mood. This study aims to use music sentiment as a proxy for auditors’ mood and explore its impact on audit quality.

Design/methodology/approach

A sample of the US firms from 2017 to 2020 is used in the study. The authors apply the ordinary least squares regressions and the logit regressions to the audit quality models. The authors use absolute discretionary accruals and the propensity to meet or beat earnings forecasts as proxies for audit quality and calculate a stream-weighted average sentiment measure for Spotify’s Top-200 songs of each day during the audit period of a client firm to capture the sentiment of auditors.

Findings

The authors find that music sentiment is positively associated with audit quality. The result is consistent with the mood maintenance hypothesis, which suggests that a positive mood can induce auditors to be more careful in risky situations. Furthermore, the result is robust to various sensitivity analyses.

Originality/value

The study contributes to the scarce literature that focuses on auditors’ emotional state and highlights the importance of monitoring auditor mindset during the audit period.

Purpose

Prior research finds that early-career professional accountants (early PAs) are generally dissatisfied with the learning and training opportunities offered during their early employment years, which impacts their career progression. This paper aims to examine whether different learning styles between these early PAs and their qualified accounting employers and trainers diverge.

Design/methodology/approach

Using Kolb’s learning styles inventory and interviews, this study explores the learning styles of early PAs and their employers, examining changes in these learning styles over time.

Findings

This research shows the necessity for different learning styles to be integrated into early PA training and learning, as research participants’ learning styles tend to prefer active experimentation requiring practical examples and self-learning opportunities. In contrast, their senior, qualified accounting employers prefer conceptualisation-based learning styles. As early PAs’ career progression requires them to succeed in employer-supported training, some early PAs change their learning style preferences to progress, whereas others with incompatible learning styles either moved to different employers or reassessed their choice of profession.

Practical implications

To reduce career dissatisfaction, develop and retain competent accountants, early PAs must be supported to learn effectively. By reducing early PAs’ dissatisfaction early PA educators and employers will potentially increase the attractiveness of accounting as a profession.

Originality/value

Few studies interrogate how accounting professionals utilise learning and training post-graduation nor do they examine the learning styles of workplace trainers and learners. This exploratory study uniquely analyses the learning styles of both early PAs and their employers.

Purpose

This study aims to investigate the influence of social capital on firms’ business strategies, focusing on Miles and Snow (1978) dichotomy between “prospector” and “defender” strategies.

Design/methodology/approach

The authors perform multivariate regression analyses using a sample of US firms spanning the period from 1995 to 2021. The authors use a two-stage least squares model to alleviate endogeneity concerns and perform several cross-sectional tests and path analyses.

Findings

The authors find a significant and positive association between social capital and defender-type business strategies. Results from cross-sectional analyses reveal that this relationship is more pronounced in highly competitive product markets and among firms led by highly qualified CEOs. In addition, the authors find that CEO compensation mediates the effect of social capital on business strategy. Overall, the results suggest that low social capital regions foster prospector strategies due to managers’ self-maximizing incentives. Finally, the authors find that business strategy acts as a mediating factor, connecting social capital to firms’ financial reporting outcomes.

Social implications

In light of recent public concerns over declining social capital in major economies and the growing globalization and multiculturism in societies, the findings are of interest to policymakers and the wider society by highlighting the far-reaching implications of social capital on businesses and the capital market.

Originality/value

To the best of the authors’ knowledge, this study documents the first empirical evidence on the association between a society’s social capital and firms’ business strategies. The study contributes to the research on the determinants of a firm’s business strategy and extends the literature on the relationship between social capital and firm behavior.

Purpose

This study aims to enhance the understanding of the impact of the COVID-19 pandemic on corporate tax performance in the context of a large emerging country like Indonesia.

Design/methodology/approach

This study uses a quantitative approach with multiple regression methods on a data set of 2,366 firm-year observations registered on the Indonesia Stock Exchange (IDX) from 2017 to 2022.

Findings

The primary empirical findings from the multivariate regressions suggest a positive and significant association between the COVID-19 pandemic and corporate tax performance in Indonesia. In other words, these listed firms have increased their tax avoidance activities during the pandemic. As firms face financial hardships due to the pandemic's effects, they tend to engage in tax avoidance practices to reduce current income tax payments, thereby enhancing their liquidity. In addition, over time, firms have adapted to use various tax policies introduced by the government in response to the pandemic to mitigate the adverse impacts of the crisis.

Research limitations/implications

This study draws on a sample solely from one emerging country.

Practical implications

The results of this study can aid governments, policymakers, tax authorities and companies in evaluating their strategies concerning preparedness and emergency responses during crises, particularly those caused by pandemics.

Originality/value

To the best of the author’s knowledge, this study is considered one of the initial efforts to examine the impact of the COVID-19 pandemic on corporate tax avoidance in an emerging country like Indonesia.

Purpose

This paper aims to investigate the relationship between military connections and tax avoidance in Indonesia. Further, the paper examines whether the relationship between military connections and tax avoidance is impacted by three corporate governance variables: auditor size or Big 4, board size and audit committee independence. Indonesia's settings allow for a unique investigation, as military involvement has been documented.

Design/methodology/approach

This paper uses Indonesia as the research setting because its military forces have a long history of business involvement. The sample includes 1,986 firm-year observations on the Indonesia Stock Exchange from 2010 to 2018. The period signifies the time of significant change post-Suharto to illustrate changes in military reform.

Findings

Military-connected firms recorded a negative relationship with effective tax rates, indicating higher tax avoidance. The authors extend this test by considering three corporate governance variables: Big 4, board size and audit committee independence. They find the corporate governance variables are ineffective in mitigating the positive impact of military-connected firms and corporate tax avoidance. The results remain consistent when performing endogeneity tests.

Originality/value

This paper adds to the extant literature by examining the impact of military connections on tax avoidance. The findings reflect Indonesia's institutional settings depicting military and political connections.

Purpose

This paper aims to critically reflect on the formation of the International Sustainability Standards Board (ISSB), its current agenda and likely future direction. The authors consider the relationships between the ISSB and other standard setters, regulators, practitioners and stakeholders, and develop a comprehensive research agenda.

Design/methodology/approach

The authors review and critically analyse academic and practitioner publications alongside the ISSB’s workplans to identify the themes impacting the future of the ISSB and to develop a research agenda.

Findings

Three key themes emerge from the authors’ analysis that are likely to influence the future of the ISSB: the jurisdiction and scope of the ISSB – how far its influence is likely to extend, both geographically and conceptually; the ongoing legitimacy challenge the ISSB is facing in terms of setting an agenda for sustainability reporting; and the “capture” of sustainability reporting by influential stakeholders including capital providers.

Originality/value

The formation of the ISSB is critical to the future of sustainability reporting. The authors provide a comprehensive and topical overview of the past, present and potential future of the ISSB, highlighting the need for further research and providing a research agenda that addresses outstanding questions in the field.