Pub Date : 2022-12-23DOI: 10.1108/par-11-2021-0180
Zhenbo Zhang, Yuxuan Zhang, Mengfan Yan
Purpose This paper aims to explore the impact of product market competition (PMC) on companies’ investment in external auditing. Design/methodology/approach This paper applies a conceptual framework derived from demand–supply analysis and a panel data set of 2,263 listed manufacturing companies in China covering the period 2012–2019. In the assessment of PMC, this study measures industry-level competition intensity and company-specific market power separately. Findings Industries appear to engage in a lower average level of external auditing if industrial competition intensity is either too high or too low. Similarly, companies spend less on external auditing if their market power is either too strong or too weak, and the company-level inverted U-shaped relationship is much more evident in industries with weak PMC. Originality/value This paper shows that a company’s external audit strategy is affected by the level of competition it faces in its market. The findings of this paper can improve the current linear PMC–auditing theoretical framework and provide insights into the strategic auditing of listed companies in China. The findings also have significant implications for policy recommendations regarding corporate governance and market scrutiny regulations.
{"title":"Product market competition and audit fees: evidence from the Chinese manufacturing industry","authors":"Zhenbo Zhang, Yuxuan Zhang, Mengfan Yan","doi":"10.1108/par-11-2021-0180","DOIUrl":"https://doi.org/10.1108/par-11-2021-0180","url":null,"abstract":"\u0000Purpose\u0000This paper aims to explore the impact of product market competition (PMC) on companies’ investment in external auditing.\u0000\u0000\u0000Design/methodology/approach\u0000This paper applies a conceptual framework derived from demand–supply analysis and a panel data set of 2,263 listed manufacturing companies in China covering the period 2012–2019. In the assessment of PMC, this study measures industry-level competition intensity and company-specific market power separately.\u0000\u0000\u0000Findings\u0000Industries appear to engage in a lower average level of external auditing if industrial competition intensity is either too high or too low. Similarly, companies spend less on external auditing if their market power is either too strong or too weak, and the company-level inverted U-shaped relationship is much more evident in industries with weak PMC.\u0000\u0000\u0000Originality/value\u0000This paper shows that a company’s external audit strategy is affected by the level of competition it faces in its market. The findings of this paper can improve the current linear PMC–auditing theoretical framework and provide insights into the strategic auditing of listed companies in China. The findings also have significant implications for policy recommendations regarding corporate governance and market scrutiny regulations.\u0000","PeriodicalId":46088,"journal":{"name":"Pacific Accounting Review","volume":null,"pages":null},"PeriodicalIF":2.1,"publicationDate":"2022-12-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45659190","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 : 2022-12-22DOI: 10.1108/par-06-2021-0087
S. Roy
Purpose The purpose of this paper is to identify and gain recent insights into the extent to which skills expectation gap exists from the perspective of employers in a Pacific Island country, including the competencies perceived essential within the work context of accountants and the support provided by employers to accounting graduates to address the skills expectation gap. Design/methodology/approach Using the expectation–performance gap framework developed by Bui and Porter (2010), this study collects and analyses data via semi-structured interviews with employers at chartered accounting firms, large- and medium-sized commercial and industrial firms in Fiji. Findings Majority of the employers indicated that graduates from the Fijian universities are adequately prepared and have acquired the necessary attributes to perform at the workplace. However, employers expect universities to do a little more in terms of developing confidence and improving ability to apply theoretical knowledge to practice. The findings also outline that the institutional-, social- and student-related constraints directly affect the quality of graduates, which are not in control of academics. Research limitations/implications It is noted that graduate capabilities are developed over two different learning environments. This study focused on how universities prepared graduates to perform at the workplace from the perspective of employers. This serves as a basis for future research to investigate effectiveness of trainings provided by employers to graduates to enable them into becoming successful accounting professionals. Originality/value This study adds clarifications to the debate on academic–practice gap by providing recent insights into the extent to which graduates demonstrate capabilities to perform in the accounting profession, the prevailing issues with graduate capabilities and the employers’ contribution towards strengthening graduate capabilities.
{"title":"Graduate readiness for a professional career in accounting – an investigation of employers’ perspectives in Fiji","authors":"S. Roy","doi":"10.1108/par-06-2021-0087","DOIUrl":"https://doi.org/10.1108/par-06-2021-0087","url":null,"abstract":"\u0000Purpose\u0000The purpose of this paper is to identify and gain recent insights into the extent to which skills expectation gap exists from the perspective of employers in a Pacific Island country, including the competencies perceived essential within the work context of accountants and the support provided by employers to accounting graduates to address the skills expectation gap.\u0000\u0000\u0000Design/methodology/approach\u0000Using the expectation–performance gap framework developed by Bui and Porter (2010), this study collects and analyses data via semi-structured interviews with employers at chartered accounting firms, large- and medium-sized commercial and industrial firms in Fiji.\u0000\u0000\u0000Findings\u0000Majority of the employers indicated that graduates from the Fijian universities are adequately prepared and have acquired the necessary attributes to perform at the workplace. However, employers expect universities to do a little more in terms of developing confidence and improving ability to apply theoretical knowledge to practice. The findings also outline that the institutional-, social- and student-related constraints directly affect the quality of graduates, which are not in control of academics.\u0000\u0000\u0000Research limitations/implications\u0000It is noted that graduate capabilities are developed over two different learning environments. This study focused on how universities prepared graduates to perform at the workplace from the perspective of employers. This serves as a basis for future research to investigate effectiveness of trainings provided by employers to graduates to enable them into becoming successful accounting professionals.\u0000\u0000\u0000Originality/value\u0000This study adds clarifications to the debate on academic–practice gap by providing recent insights into the extent to which graduates demonstrate capabilities to perform in the accounting profession, the prevailing issues with graduate capabilities and the employers’ contribution towards strengthening graduate capabilities.\u0000","PeriodicalId":46088,"journal":{"name":"Pacific Accounting Review","volume":null,"pages":null},"PeriodicalIF":2.1,"publicationDate":"2022-12-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45834559","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 : 2022-12-05DOI: 10.1108/par-05-2022-0073
Minyoung Noh, Jimi Park
Purpose This study aims to examine how a firm’s strategic emphasis on value appropriation over value creation is associated with the readability of narrative disclosures in annual reports. Design/methodology/approach This study examines the effect of the strategic emphasis on annual report readability based on a total of 45,273 US firm-year (5,754 unique firms) observations for the period from 1994 to 2018. Strategic emphasis is measured as advertising expenses minus research and development expenses, scaled by sales and Bog index and various measures, such as the FOG, KINCAID and FLESCH index, are used to measure the annual report readability. Findings The authors find that the strategic emphasis on value appropriation over value creation is positively related to firms’ annual report readability. In addition, the positive effect of the strategic emphasis on value appropriation over value creation on annual report readability is more pronounced with high managerial ability. Practical implications With the continual effort of Securities and Exchange Commission regulation and IFRS updates to improve narrative disclosures, it is meaningful to provide evidence showing how managers shape narratives in annual reports by highlighting good news with easy-to-understand words, but also may establish a barrier to understanding by choosing to use long and complex words depending on their strategic emphasis. Originality/value The evidence suggests that a strategic emphasis between value appropriation and value creation and managerial ability is an important factor in shaping the readability of annual reports, which contributes to the management, accounting and finance literature that investigates the relationship between resource deployment (i.e. strategic emphasis) and textual properties of corporate financial disclosures (i.e. readability).
目的本研究旨在检验公司对价值分配而非价值创造的战略重视与年度报告中叙述性披露的可读性之间的关系。设计/方法/方法本研究基于1994年至2018年期间45273家美国公司年度（5754家独特公司）的观察结果，考察了战略重点对年度报告可读性的影响。战略重点是以广告费用减去研发费用来衡量的，按销售和博格指数衡量，并使用FOG、KINCAID和FLESCH指数等各种指标来衡量年度报告的可读性。研究结果发现，战略上重视价值分配而非价值创造与企业年报的可读性呈正相关。此外，战略上强调价值分配而非价值创造对年报可读性的积极影响在管理能力较高的情况下更为明显。实际含义随着美国证券交易委员会（Securities and Exchange Commission）监管和《国际财务报告准则》（IFRS）更新的不断努力，以改进叙述性披露，提供证据表明管理人员如何通过用通俗易懂的词语突出好消息来塑造年度报告中的叙述是有意义的，但也可能通过根据其战略重点选择使用长而复杂的单词来建立理解障碍。原创性/价值有证据表明，在价值分配、价值创造和管理能力之间的战略重点是塑造年度报告可读性的一个重要因素，这有助于管理，会计和财务文献，研究资源部署（即战略重点）和公司财务披露的文本属性（即可读性）之间的关系。
{"title":"The impact of strategic emphasis on the readability of narrative information in annual reports","authors":"Minyoung Noh, Jimi Park","doi":"10.1108/par-05-2022-0073","DOIUrl":"https://doi.org/10.1108/par-05-2022-0073","url":null,"abstract":"\u0000Purpose\u0000This study aims to examine how a firm’s strategic emphasis on value appropriation over value creation is associated with the readability of narrative disclosures in annual reports.\u0000\u0000\u0000Design/methodology/approach\u0000This study examines the effect of the strategic emphasis on annual report readability based on a total of 45,273 US firm-year (5,754 unique firms) observations for the period from 1994 to 2018. Strategic emphasis is measured as advertising expenses minus research and development expenses, scaled by sales and Bog index and various measures, such as the FOG, KINCAID and FLESCH index, are used to measure the annual report readability.\u0000\u0000\u0000Findings\u0000The authors find that the strategic emphasis on value appropriation over value creation is positively related to firms’ annual report readability. In addition, the positive effect of the strategic emphasis on value appropriation over value creation on annual report readability is more pronounced with high managerial ability.\u0000\u0000\u0000Practical implications\u0000With the continual effort of Securities and Exchange Commission regulation and IFRS updates to improve narrative disclosures, it is meaningful to provide evidence showing how managers shape narratives in annual reports by highlighting good news with easy-to-understand words, but also may establish a barrier to understanding by choosing to use long and complex words depending on their strategic emphasis.\u0000\u0000\u0000Originality/value\u0000The evidence suggests that a strategic emphasis between value appropriation and value creation and managerial ability is an important factor in shaping the readability of annual reports, which contributes to the management, accounting and finance literature that investigates the relationship between resource deployment (i.e. strategic emphasis) and textual properties of corporate financial disclosures (i.e. readability).\u0000","PeriodicalId":46088,"journal":{"name":"Pacific Accounting Review","volume":null,"pages":null},"PeriodicalIF":2.1,"publicationDate":"2022-12-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44870315","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 : 2022-11-23DOI: 10.1108/par-04-2022-0051
J. Park, Yiding Wang, Sijing Wei
Purpose Employees, as internal stakeholders, not only play significant roles in a company’s operations but are also important users of a company’s financial information. However, prior accounting research to date has not explored whether employees incorporate a firm’s ability to meet earnings benchmarks in forming and revising their perceptions of firms. This study aims to focus on whether a firm’s ability to meet relevant earnings benchmarks impacts employees’ perceptions. Design/methodology/approach The authors use employees’ perception scores from the 100 Best Companies to Work for from 1998 to 2015. The authors conduct an empirical study to examine the impact of beating earnings benchmarks on the perceptions of employees by estimating regression analyses. The dependent variable is employee perceptions of the firm. The variables of interest are the earnings growth and the analyst forecast benchmarks. The authors control for earnings performance and other determinants of employees’ perceptions. Findings The authors find that beating the earnings benchmarks is relevant for employees but has different impacts on the employees’ perceptions of firms. Specifically, both level and change analyses suggest that a firm’s ability to beat the earnings growth benchmark affects employees’ perceptions. However, the authors find no associations between employees’ perceptions and the analyst forecast benchmarks. Research limitations/implications The authors recognize the amount of variation among the two groups’ perceptions from the binary variable creates an inherent limitation that the authors examine the best firms in terms of employee perceptions compared to the second-best firms. Therefore, the authors create another measure, EMPLOYEE_PERCEPTION2, which equals one if the firm’s ranking is within the top quartile and zero if the firm’s ranking is within the bottom quartile. This new variable increases the variation of employees’ perceptions in the sample to address the inherent limitation by allowing us to compare the best firms to the worst firms in the sample. Originality/value The study highlights the importance of beating earnings benchmarks for employees as a broader group of stakeholders. The study contributes to accounting benchmarks literature by exploring a different group of earnings benchmarks users. The authors also contribute to psychology studies by providing empirical evidence on the previously untested, intuitive prediction that employees’ views depend on a firm’s ability to meet relevant earnings benchmarks.
{"title":"Employees’ perceptions and earnings benchmarks","authors":"J. Park, Yiding Wang, Sijing Wei","doi":"10.1108/par-04-2022-0051","DOIUrl":"https://doi.org/10.1108/par-04-2022-0051","url":null,"abstract":"\u0000Purpose\u0000Employees, as internal stakeholders, not only play significant roles in a company’s operations but are also important users of a company’s financial information. However, prior accounting research to date has not explored whether employees incorporate a firm’s ability to meet earnings benchmarks in forming and revising their perceptions of firms. This study aims to focus on whether a firm’s ability to meet relevant earnings benchmarks impacts employees’ perceptions.\u0000\u0000\u0000Design/methodology/approach\u0000The authors use employees’ perception scores from the 100 Best Companies to Work for from 1998 to 2015. The authors conduct an empirical study to examine the impact of beating earnings benchmarks on the perceptions of employees by estimating regression analyses. The dependent variable is employee perceptions of the firm. The variables of interest are the earnings growth and the analyst forecast benchmarks. The authors control for earnings performance and other determinants of employees’ perceptions.\u0000\u0000\u0000Findings\u0000The authors find that beating the earnings benchmarks is relevant for employees but has different impacts on the employees’ perceptions of firms. Specifically, both level and change analyses suggest that a firm’s ability to beat the earnings growth benchmark affects employees’ perceptions. However, the authors find no associations between employees’ perceptions and the analyst forecast benchmarks.\u0000\u0000\u0000Research limitations/implications\u0000The authors recognize the amount of variation among the two groups’ perceptions from the binary variable creates an inherent limitation that the authors examine the best firms in terms of employee perceptions compared to the second-best firms. Therefore, the authors create another measure, EMPLOYEE_PERCEPTION2, which equals one if the firm’s ranking is within the top quartile and zero if the firm’s ranking is within the bottom quartile. This new variable increases the variation of employees’ perceptions in the sample to address the inherent limitation by allowing us to compare the best firms to the worst firms in the sample.\u0000\u0000\u0000Originality/value\u0000The study highlights the importance of beating earnings benchmarks for employees as a broader group of stakeholders. The study contributes to accounting benchmarks literature by exploring a different group of earnings benchmarks users. The authors also contribute to psychology studies by providing empirical evidence on the previously untested, intuitive prediction that employees’ views depend on a firm’s ability to meet relevant earnings benchmarks.\u0000","PeriodicalId":46088,"journal":{"name":"Pacific Accounting Review","volume":null,"pages":null},"PeriodicalIF":2.1,"publicationDate":"2022-11-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47374151","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 : 2022-11-22DOI: 10.1108/par-02-2022-0029
Ines Amara, Imen Khelil, Anis El Ammari, Hichem Khlif
Purpose This paper aims to examine the association between money laundering and infrastructure quality and whether the strength of auditing and reporting standards (SARS) moderates this association. Design/methodology/approach The sample includes 348 country-year observations over the period of 2015–2017. The authors use Basel Anti-Money Laundering reports for 2015, 2016 and 2017 to collect data concerning money laundering. Infrastructure quality and the remaining variables are gathered from the Global Competitiveness reports for the same years. Findings Results show that money laundering is negatively associated with infrastructure quality. This negative association remains stable for countries characterised by low SARS, while it becomes less pronounced for countries with high SARS. Additional tests for the moderating impact of the SARS, using an interaction term between money laundering and SARS dummy variable, confirm that high SARS mitigates the adverse effect of money laundering on infrastructure quality. Originality/value These findings are important for policymakers, as they put emphasis on the adverse effect of money laundering and financial crimes on infrastructure quality and how solid auditing and reporting standards may improve infrastructure quality and reduce the negative effect of money laundering on the same variable. Thus, strengthening legislations concerning auditing and reporting standards in one country may improve infrastructure quality and combat money laundering and its adverse impacts.
{"title":"Money laundering and infrastructure quality: the moderating effect of the strength of auditing and reporting standards","authors":"Ines Amara, Imen Khelil, Anis El Ammari, Hichem Khlif","doi":"10.1108/par-02-2022-0029","DOIUrl":"https://doi.org/10.1108/par-02-2022-0029","url":null,"abstract":"\u0000Purpose\u0000This paper aims to examine the association between money laundering and infrastructure quality and whether the strength of auditing and reporting standards (SARS) moderates this association.\u0000\u0000\u0000Design/methodology/approach\u0000The sample includes 348 country-year observations over the period of 2015–2017. The authors use Basel Anti-Money Laundering reports for 2015, 2016 and 2017 to collect data concerning money laundering. Infrastructure quality and the remaining variables are gathered from the Global Competitiveness reports for the same years.\u0000\u0000\u0000Findings\u0000Results show that money laundering is negatively associated with infrastructure quality. This negative association remains stable for countries characterised by low SARS, while it becomes less pronounced for countries with high SARS. Additional tests for the moderating impact of the SARS, using an interaction term between money laundering and SARS dummy variable, confirm that high SARS mitigates the adverse effect of money laundering on infrastructure quality.\u0000\u0000\u0000Originality/value\u0000These findings are important for policymakers, as they put emphasis on the adverse effect of money laundering and financial crimes on infrastructure quality and how solid auditing and reporting standards may improve infrastructure quality and reduce the negative effect of money laundering on the same variable. Thus, strengthening legislations concerning auditing and reporting standards in one country may improve infrastructure quality and combat money laundering and its adverse impacts.\u0000","PeriodicalId":46088,"journal":{"name":"Pacific Accounting Review","volume":null,"pages":null},"PeriodicalIF":2.1,"publicationDate":"2022-11-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46580787","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 : 2022-11-09DOI: 10.1108/par-08-2021-0134
Huu Cuong Nguyen
Purpose This study aims to examine the levels of interim financial reporting (IR) disclosure by listed firms in the Asia-Pacific region and factors influencing these disclosure levels. Design/methodology/approach Drawing on a sample of 700 interim reports issued in 2012 by the top 100 listed firms in seven Asia-Pacific countries (Australia, Hong Kong, Malaysia, Singapore, the Philippines, Thailand and Vietnam), the author constructed a disclosure index consisting of disclosure items commonly required across the sample countries. Using this index, the study measures the extent to which listed firms in the Asia-Pacific Region comply with IR disclosure requirements. The study performs ordinary least square regression to investigate the influence of the four country-level factors including international financial reporting standard (IFRS) adoption, audit review, reporting frequency and reporting lag. Findings This research documents that IR disclosure varies significantly across the region. The IR disclosure levels are positively associated with IFRS adoption, audit review and mandatory of quarterly reporting, but negatively associated with reporting lag. Originality/value IR regulation varies across the Asia-Pacific region, but there is no existing research on the country-level factors influencing IR disclosure practices. To the best of the author’s knowledge, this is the first paper providing some insights into IR disclosure levels by listed firms in the region. It also contributes to the disclosure literature by providing empirical evidence on the country-level factors influencing these disclosure levels. Deriving from the findings, the authors offer recommendations for regulators, investors and listed firms on the issue of reviewing the regulation, using information and preparing IR.
{"title":"Interim financial reporting disclosure by listed firms in the Asia-Pacific region and influencing factors","authors":"Huu Cuong Nguyen","doi":"10.1108/par-08-2021-0134","DOIUrl":"https://doi.org/10.1108/par-08-2021-0134","url":null,"abstract":"\u0000Purpose\u0000This study aims to examine the levels of interim financial reporting (IR) disclosure by listed firms in the Asia-Pacific region and factors influencing these disclosure levels.\u0000\u0000\u0000Design/methodology/approach\u0000Drawing on a sample of 700 interim reports issued in 2012 by the top 100 listed firms in seven Asia-Pacific countries (Australia, Hong Kong, Malaysia, Singapore, the Philippines, Thailand and Vietnam), the author constructed a disclosure index consisting of disclosure items commonly required across the sample countries. Using this index, the study measures the extent to which listed firms in the Asia-Pacific Region comply with IR disclosure requirements. The study performs ordinary least square regression to investigate the influence of the four country-level factors including international financial reporting standard (IFRS) adoption, audit review, reporting frequency and reporting lag.\u0000\u0000\u0000Findings\u0000This research documents that IR disclosure varies significantly across the region. The IR disclosure levels are positively associated with IFRS adoption, audit review and mandatory of quarterly reporting, but negatively associated with reporting lag.\u0000\u0000\u0000Originality/value\u0000IR regulation varies across the Asia-Pacific region, but there is no existing research on the country-level factors influencing IR disclosure practices. To the best of the author’s knowledge, this is the first paper providing some insights into IR disclosure levels by listed firms in the region. It also contributes to the disclosure literature by providing empirical evidence on the country-level factors influencing these disclosure levels. Deriving from the findings, the authors offer recommendations for regulators, investors and listed firms on the issue of reviewing the regulation, using information and preparing IR.\u0000","PeriodicalId":46088,"journal":{"name":"Pacific Accounting Review","volume":null,"pages":null},"PeriodicalIF":2.1,"publicationDate":"2022-11-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44070066","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 : 2022-10-17DOI: 10.1108/par-08-2021-0132
N. Liyanapathirana, C. Akroyd
Purpose This paper aims to understand how accountants in Sri Lanka perceive the effect of religiosity on ethical decision-making. Sri Lanka is a highly religious country, but it also has a high level of corruption, so understanding ethical decision-making in this context is important for the accounting profession. Design/methodology/approach Data were collected using semi-structured interviews with 40 accountants in Sri Lanka with decision-making roles. Virtue ethics theory and content analysis were used to analyse the interview data and categorise accountants' responses into themes using an interpretive methodology. Findings This paper identifies three ways in which religiosity can influence accountants’ ethical decision-making. Firstly, through a faith in the beliefs of their religion; secondly, through awareness of religious prescriptions and virtues; and thirdly, through a commitment towards religious practices and rituals. However, the findings show that religiosity does not always influence the ethical decision-making of accountants because of pervasive corruption, which is a cultural norm in contemporary Sri Lanka. Thus, it is evident that there is an interrelationship between religious and cultural environments which can influence ethical decision-making. Originality/value While the religiosity of accountants can support ethical decision-making, the findings of this paper show that the cultural norm of corruption can mediate this connection as the evidence shows that accountants with a strong religious background, irrespective of their religion, may still act unethically when corruption is a cultural norm.
{"title":"Religiosity and accountants' ethical decision-making in a religious country with a high level of corruption","authors":"N. Liyanapathirana, C. Akroyd","doi":"10.1108/par-08-2021-0132","DOIUrl":"https://doi.org/10.1108/par-08-2021-0132","url":null,"abstract":"\u0000Purpose\u0000This paper aims to understand how accountants in Sri Lanka perceive the effect of religiosity on ethical decision-making. Sri Lanka is a highly religious country, but it also has a high level of corruption, so understanding ethical decision-making in this context is important for the accounting profession.\u0000\u0000\u0000Design/methodology/approach\u0000Data were collected using semi-structured interviews with 40 accountants in Sri Lanka with decision-making roles. Virtue ethics theory and content analysis were used to analyse the interview data and categorise accountants' responses into themes using an interpretive methodology.\u0000\u0000\u0000Findings\u0000This paper identifies three ways in which religiosity can influence accountants’ ethical decision-making. Firstly, through a faith in the beliefs of their religion; secondly, through awareness of religious prescriptions and virtues; and thirdly, through a commitment towards religious practices and rituals. However, the findings show that religiosity does not always influence the ethical decision-making of accountants because of pervasive corruption, which is a cultural norm in contemporary Sri Lanka. Thus, it is evident that there is an interrelationship between religious and cultural environments which can influence ethical decision-making.\u0000\u0000\u0000Originality/value\u0000While the religiosity of accountants can support ethical decision-making, the findings of this paper show that the cultural norm of corruption can mediate this connection as the evidence shows that accountants with a strong religious background, irrespective of their religion, may still act unethically when corruption is a cultural norm.\u0000","PeriodicalId":46088,"journal":{"name":"Pacific Accounting Review","volume":null,"pages":null},"PeriodicalIF":2.1,"publicationDate":"2022-10-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44078068","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 : 2022-09-30DOI: 10.1108/par-09-2021-0156
Dawei Jin, Hao Shen, Haizhi Wang, Desheng Yin
Purpose The purpose of this paper is to empirically explore whether and to what extent the changes in state corporate income tax rates affect corporate tax aggressiveness. Design/methodology/approach Using a differences-in-differences approach with dynamic treatment, the authors investigate the effect of staggered changes in state corporate income tax rates in the USA on corporate tax aggressiveness. Findings Firms become more aggressive in avoiding taxes following state tax increases but are insensitive to tax cuts. The effect of state tax increases on tax aggressiveness is weaker for firms with greater debt tax shields and marginal tax rates. Firms are more likely to shift their operations and relocate their headquarters out of states experiencing tax increases. Originality/value To the best of the authors' knowledge, this paper is the first to study the relation between state tax policy changes and corporate tax aggressiveness. This paper finds an asymmetrical pattern of corporate tax aggressiveness in response to state tax changes.
{"title":"Do state tax changes affect corporate tax aggressiveness? US evidence","authors":"Dawei Jin, Hao Shen, Haizhi Wang, Desheng Yin","doi":"10.1108/par-09-2021-0156","DOIUrl":"https://doi.org/10.1108/par-09-2021-0156","url":null,"abstract":"\u0000Purpose\u0000The purpose of this paper is to empirically explore whether and to what extent the changes in state corporate income tax rates affect corporate tax aggressiveness.\u0000\u0000\u0000Design/methodology/approach\u0000Using a differences-in-differences approach with dynamic treatment, the authors investigate the effect of staggered changes in state corporate income tax rates in the USA on corporate tax aggressiveness.\u0000\u0000\u0000Findings\u0000Firms become more aggressive in avoiding taxes following state tax increases but are insensitive to tax cuts. The effect of state tax increases on tax aggressiveness is weaker for firms with greater debt tax shields and marginal tax rates. Firms are more likely to shift their operations and relocate their headquarters out of states experiencing tax increases.\u0000\u0000\u0000Originality/value\u0000To the best of the authors' knowledge, this paper is the first to study the relation between state tax policy changes and corporate tax aggressiveness. This paper finds an asymmetrical pattern of corporate tax aggressiveness in response to state tax changes.\u0000","PeriodicalId":46088,"journal":{"name":"Pacific Accounting Review","volume":null,"pages":null},"PeriodicalIF":2.1,"publicationDate":"2022-09-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45148373","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 : 2022-09-13DOI: 10.1108/par-01-2022-0014
Wenzhang Sun, Jiawei Zhu, Xuhui Wang
Purpose The purpose of this study is to investigate the impact of board secretaries’ characteristics on annual report readability using an original method that evaluates the readability of Chinese characters. Design/methodology/approach The authors manually collect board secretaries’ characteristics from the China Securities Market and Accounting Research database and obtain annual reports from the China Information website. Ordinary least square regression is applied to evaluate the impact, and then robustness tests and additional regression analyses are conducted. Findings Board secretaries’ legal-professional expertise, international expertise and role duality improve annual report readability. However, their political connections are negatively associated with it. The effect of expertise (role duality) is more pronounced for firms with lower ex ante litigation risk (board secretaries with equity holdings). Furthermore, higher readability increases the compensation of board secretaries, whereas lower readability increases their turnover. Finally, annual report readability is positively related to firm performance. Research limitations/implications The authors only investigate listed firms in China from 2007 to 2017 because of the difficulties of obtaining data and text mining. Practical implications The authors provide managerial insights for regulators aiming to establish an effective governance mechanism with Chinese characteristics. First, certain requirements for board secretaries’ expertise can improve annual report readability. Further, firms can consider appointing board members or senior executives as board secretaries to enhance disclosure quality. Originality/value To the best of the authors’ knowledge, this study is the first to verify the effect of board secretaries’ characteristics on disclosure quality, especially annual report readability. Moreover, this study proposes a novel measure of annual report readability for Chinese texts.
{"title":"Do board secretaries influence annual report readability?","authors":"Wenzhang Sun, Jiawei Zhu, Xuhui Wang","doi":"10.1108/par-01-2022-0014","DOIUrl":"https://doi.org/10.1108/par-01-2022-0014","url":null,"abstract":"\u0000Purpose\u0000The purpose of this study is to investigate the impact of board secretaries’ characteristics on annual report readability using an original method that evaluates the readability of Chinese characters.\u0000\u0000\u0000Design/methodology/approach\u0000The authors manually collect board secretaries’ characteristics from the China Securities Market and Accounting Research database and obtain annual reports from the China Information website. Ordinary least square regression is applied to evaluate the impact, and then robustness tests and additional regression analyses are conducted.\u0000\u0000\u0000Findings\u0000Board secretaries’ legal-professional expertise, international expertise and role duality improve annual report readability. However, their political connections are negatively associated with it. The effect of expertise (role duality) is more pronounced for firms with lower ex ante litigation risk (board secretaries with equity holdings). Furthermore, higher readability increases the compensation of board secretaries, whereas lower readability increases their turnover. Finally, annual report readability is positively related to firm performance.\u0000\u0000\u0000Research limitations/implications\u0000The authors only investigate listed firms in China from 2007 to 2017 because of the difficulties of obtaining data and text mining.\u0000\u0000\u0000Practical implications\u0000The authors provide managerial insights for regulators aiming to establish an effective governance mechanism with Chinese characteristics. First, certain requirements for board secretaries’ expertise can improve annual report readability. Further, firms can consider appointing board members or senior executives as board secretaries to enhance disclosure quality.\u0000\u0000\u0000Originality/value\u0000To the best of the authors’ knowledge, this study is the first to verify the effect of board secretaries’ characteristics on disclosure quality, especially annual report readability. Moreover, this study proposes a novel measure of annual report readability for Chinese texts.\u0000","PeriodicalId":46088,"journal":{"name":"Pacific Accounting Review","volume":null,"pages":null},"PeriodicalIF":2.1,"publicationDate":"2022-09-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42483200","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 : 2022-08-11DOI: 10.1108/par-07-2021-0123
Muhammad Riaz, Shu Jinghong, U. Siddiqi
Purpose The purpose of this study is to illuminate financial commitment of a firm vis-a-vis corporate behavior of 519 reported fabric businesses in G-20 states. This study also aims to take into account the regional baseline comparisons (i.e. subsampling) of G-20 firms based on the available data. The pattern of the current study comes from the registered companies in the G-20 states. For the fabricating business, the 2007–2018 annual financial statements are obtained from the Thomson Reuters Data Stream and World Stock Exchange. Design/methodology/approach For the investigation, the panel data were analyzed from the period 2007–2018 by applying summary statistics of ordinary least square, correlation matrix and generalized method of moments. Findings The findings of this study suggest that Ln assets, dividends and investments have a positive association with the debt level. In addition, profitability and working capital were negatively associated with change in total debt under pecking order theory. Research limitations/implications The effects of the geographical location of the firms and current global economic downturn were accounted for the capital structure decisions and corporate performance of G-20 firms. Originality/value This study instigates observed phenomenon elicited from capital structure theory by applying analytical method, instead of describing them in terms of administrative selection, taking measure and chief financial officers risk preference. Finally, work is required to form new hypothesis and explore novel factors that could enrich academic scholars’ motivation.
{"title":"A comparative analysis of capital structure of G-20 firms on regional basis","authors":"Muhammad Riaz, Shu Jinghong, U. Siddiqi","doi":"10.1108/par-07-2021-0123","DOIUrl":"https://doi.org/10.1108/par-07-2021-0123","url":null,"abstract":"\u0000Purpose\u0000The purpose of this study is to illuminate financial commitment of a firm vis-a-vis corporate behavior of 519 reported fabric businesses in G-20 states. This study also aims to take into account the regional baseline comparisons (i.e. subsampling) of G-20 firms based on the available data. The pattern of the current study comes from the registered companies in the G-20 states. For the fabricating business, the 2007–2018 annual financial statements are obtained from the Thomson Reuters Data Stream and World Stock Exchange.\u0000\u0000\u0000Design/methodology/approach\u0000For the investigation, the panel data were analyzed from the period 2007–2018 by applying summary statistics of ordinary least square, correlation matrix and generalized method of moments.\u0000\u0000\u0000Findings\u0000The findings of this study suggest that Ln assets, dividends and investments have a positive association with the debt level. In addition, profitability and working capital were negatively associated with change in total debt under pecking order theory.\u0000\u0000\u0000Research limitations/implications\u0000The effects of the geographical location of the firms and current global economic downturn were accounted for the capital structure decisions and corporate performance of G-20 firms.\u0000\u0000\u0000Originality/value\u0000This study instigates observed phenomenon elicited from capital structure theory by applying analytical method, instead of describing them in terms of administrative selection, taking measure and chief financial officers risk preference. Finally, work is required to form new hypothesis and explore novel factors that could enrich academic scholars’ motivation.\u0000","PeriodicalId":46088,"journal":{"name":"Pacific Accounting Review","volume":null,"pages":null},"PeriodicalIF":2.1,"publicationDate":"2022-08-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41581069","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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