Pub Date : 2023-01-13DOI: 10.1108/jaar-07-2022-0179
Ricky C. M. Chung, L. Bayne, J. Birt
PurposeThe authors examine the determinants of ESG disclosure and differentiate between voluntary and mandatory disclosure regimes in Hong Kong.Design/methodology/approachThe authors analyse both Bloomberg ESG scores and a disclosure index score, manually constructed according to the 2019 Hong Kong Exchange ESG Guide using regression tests.FindingsThe results indicate that the level of concentrated ownership is negatively associated with the quantity of ESG disclosure only in the voluntary disclosure period, suggesting that agency problems are alleviated when ESG reporting is mandatory. The findings also show that larger firms significantly disclose higher levels of ESG information in both voluntary and mandatory disclosure periods. Furthermore, the extent of ESG disclosure significantly increases when firms' sustainability reports are audited by Big 4 accounting firms only in the voluntary disclosure period. Finally, the control variables are significantly related to the level of ESG disclosure showing that ESG disclosure increased over time and is significantly different among industries.OriginalityThe authors make contributions to the literature on non-financial disclosure in relation to ESG reporting by examining the relationship between firm characteristics and ESG disclosure in the Hong Kong context under both voluntary and mandatory disclosure regimes. This study also provides important implications for other stock markets and relevant stakeholders including preparers, users and the sustainability profession.
{"title":"Determinants of ESG disclosure among listed firms under voluntary and mandatory ESG disclosure regimes in Hong Kong","authors":"Ricky C. M. Chung, L. Bayne, J. Birt","doi":"10.1108/jaar-07-2022-0179","DOIUrl":"https://doi.org/10.1108/jaar-07-2022-0179","url":null,"abstract":"PurposeThe authors examine the determinants of ESG disclosure and differentiate between voluntary and mandatory disclosure regimes in Hong Kong.Design/methodology/approachThe authors analyse both Bloomberg ESG scores and a disclosure index score, manually constructed according to the 2019 Hong Kong Exchange ESG Guide using regression tests.FindingsThe results indicate that the level of concentrated ownership is negatively associated with the quantity of ESG disclosure only in the voluntary disclosure period, suggesting that agency problems are alleviated when ESG reporting is mandatory. The findings also show that larger firms significantly disclose higher levels of ESG information in both voluntary and mandatory disclosure periods. Furthermore, the extent of ESG disclosure significantly increases when firms' sustainability reports are audited by Big 4 accounting firms only in the voluntary disclosure period. Finally, the control variables are significantly related to the level of ESG disclosure showing that ESG disclosure increased over time and is significantly different among industries.OriginalityThe authors make contributions to the literature on non-financial disclosure in relation to ESG reporting by examining the relationship between firm characteristics and ESG disclosure in the Hong Kong context under both voluntary and mandatory disclosure regimes. This study also provides important implications for other stock markets and relevant stakeholders including preparers, users and the sustainability profession.","PeriodicalId":46321,"journal":{"name":"Journal of Applied Accounting Research","volume":" ","pages":""},"PeriodicalIF":3.0,"publicationDate":"2023-01-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48789922","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-01-09DOI: 10.1108/jaar-05-2022-0097
Etienne G. Harb, N. Nasrallah, R. El Khoury, K. Hussainey
PurposeLebanon has faced one of the most severe financial and economic crises since the end of 2019. The practices of the Lebanese banks are blamed for dangerously exposing economic agents and precipitating the current financial collapse. This paper examines the patterns of manipulation of the 10 biggest banks before and after implementing the financial engineering mechanism.Design/methodology/approachThe authors apply Benford law for the first and second positions of the reports of condition and income and four out of the six aspects of the CAMELS rating system (Capital Adequacy, Assets Quality, Management expertise, Earnings Strength, Liquidity and Sensitivity to the market) by excluding Management and Sensitivity. The deviations from BL frequencies are tested using Z-statistic and Chi-square tests.FindingsBanks seem to have manipulated their Capital Adequacy, Liquidity and Assets Quality in the pre-financial engineering and considerably in the post-financial engineering periods. Fraudulent manipulations in the banking sector can distort depositors, shareholders and regulating authorities.Research limitations/implicationsThis study has many implications for governmental authorities, commercial banks, depositors, businesses, accounting and auditing firms, and policymakers. The Lebanese government needs to implement corrective fiscal and monetary policies and apply amendments to the bank secrecy and capital control law. The central bank should revamp its organizational structure, improve its disclosure practices and significantly reduce its ties to the government and the political elite.Practical implicationsThe study findings suggest that the central bank should revamp its organizational structure, improve its disclosure practices and significantly reduce its ties to the government and the political elite.Originality/valueThe study is the first to examine the patterns of fraudulent manipulation in the Lebanese banking industry using Benford Law (BL).
{"title":"Applying Benford's law to detect accounting data manipulation in the pre- and post-financial engineering periods","authors":"Etienne G. Harb, N. Nasrallah, R. El Khoury, K. Hussainey","doi":"10.1108/jaar-05-2022-0097","DOIUrl":"https://doi.org/10.1108/jaar-05-2022-0097","url":null,"abstract":"PurposeLebanon has faced one of the most severe financial and economic crises since the end of 2019. The practices of the Lebanese banks are blamed for dangerously exposing economic agents and precipitating the current financial collapse. This paper examines the patterns of manipulation of the 10 biggest banks before and after implementing the financial engineering mechanism.Design/methodology/approachThe authors apply Benford law for the first and second positions of the reports of condition and income and four out of the six aspects of the CAMELS rating system (Capital Adequacy, Assets Quality, Management expertise, Earnings Strength, Liquidity and Sensitivity to the market) by excluding Management and Sensitivity. The deviations from BL frequencies are tested using Z-statistic and Chi-square tests.FindingsBanks seem to have manipulated their Capital Adequacy, Liquidity and Assets Quality in the pre-financial engineering and considerably in the post-financial engineering periods. Fraudulent manipulations in the banking sector can distort depositors, shareholders and regulating authorities.Research limitations/implicationsThis study has many implications for governmental authorities, commercial banks, depositors, businesses, accounting and auditing firms, and policymakers. The Lebanese government needs to implement corrective fiscal and monetary policies and apply amendments to the bank secrecy and capital control law. The central bank should revamp its organizational structure, improve its disclosure practices and significantly reduce its ties to the government and the political elite.Practical implicationsThe study findings suggest that the central bank should revamp its organizational structure, improve its disclosure practices and significantly reduce its ties to the government and the political elite.Originality/valueThe study is the first to examine the patterns of fraudulent manipulation in the Lebanese banking industry using Benford Law (BL).","PeriodicalId":46321,"journal":{"name":"Journal of Applied Accounting Research","volume":" ","pages":""},"PeriodicalIF":3.0,"publicationDate":"2023-01-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44260019","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2023-01-02DOI: 10.1108/jaar-06-2022-0134
Fadi Alkaraan, Mohamamd Albahloul, K. Hussainey
PurposeCompanies documents such as annual reports incorporate narratives of repetitive rhetorical strategies as effective mechanisms adopted by companies' boardrooms to promote strategic change and strategic choices. These mechanisms can be viewed as persuasive appeals to facilitate boardrooms’ discourses. Despite the contribution of previous research through narrative analysis domains, conceptualization of narrative practices remains a relatively neglected area in the extant accounting literature.Design/methodology/approachThe analytical framework is rooted in Aristotle's three pillars of rhetorical proofs: ethos (credibility/trustworthiness), pathos (emotion/identification through cultural domains) and logos (reason/rationale) in investigating narrative extracts regarding persuasive appeals adopted by Carillion's board through annual reports that facilitate discourse regarding Carillion’s strategic choices. Further, the authors emphasis on repetitive rhetorical slogan strategies embedded in the annual reports regarding Carillion's acquisitions strategy. We viewed acquisitions narratives as rhetorical communication artefacts and analyzed the repetitive rhetoric slogans in these corporate documents.FindingsFindings of this study show how persuasive strategies and repetitive slogans trigger the discourses of Carillion's annual reports by drawing on perspectives from upper echelon theory, impression management and communication patterns. Findings reveal that Carillion’ board strategically use repetitive rhetoric slogans to shape optimistic corporate future performance which might be different from the feasible reality. Finally, the authors argue that corporate executives are striving to construct an alternative reality stem from their initial unrealistic aspiration to lead their sector of less controlled market share. Findings of this study have theoretical and managerial implications.Research limitations/implicationsThe key limitation of this study lies with the case study as the research methodology. Subjectivity remains inherent in interpreting the findings of this study. Future studies may adopt or adapt the authors’ analytical framework to examine other domains underpinning corporate reporting practices.Practical implicationsThe findings of this study have practical implications for boardrooms and policymakers. Findings of this study have theoretical and managerial implications. The level of optimism has its impact on the mood of financial decision-makers, and when there is a high level of optimism, managers may consider making more investment decisions and therefore making many acquisitions. Managerial overconfidence has been widely documented in the literature. Overconfident managers systematically overestimate the probability of good outcomes (and correspondingly underestimate the probability of bad outcomes) resulting from their actions.Social implicationsManagerial overconfidence refers to overestimation of managers' own abilities and out
{"title":"Carillion's strategic choices and the boardroom's strategies of persuasive appeals: ethos, logos and pathos","authors":"Fadi Alkaraan, Mohamamd Albahloul, K. Hussainey","doi":"10.1108/jaar-06-2022-0134","DOIUrl":"https://doi.org/10.1108/jaar-06-2022-0134","url":null,"abstract":"PurposeCompanies documents such as annual reports incorporate narratives of repetitive rhetorical strategies as effective mechanisms adopted by companies' boardrooms to promote strategic change and strategic choices. These mechanisms can be viewed as persuasive appeals to facilitate boardrooms’ discourses. Despite the contribution of previous research through narrative analysis domains, conceptualization of narrative practices remains a relatively neglected area in the extant accounting literature.Design/methodology/approachThe analytical framework is rooted in Aristotle's three pillars of rhetorical proofs: ethos (credibility/trustworthiness), pathos (emotion/identification through cultural domains) and logos (reason/rationale) in investigating narrative extracts regarding persuasive appeals adopted by Carillion's board through annual reports that facilitate discourse regarding Carillion’s strategic choices. Further, the authors emphasis on repetitive rhetorical slogan strategies embedded in the annual reports regarding Carillion's acquisitions strategy. We viewed acquisitions narratives as rhetorical communication artefacts and analyzed the repetitive rhetoric slogans in these corporate documents.FindingsFindings of this study show how persuasive strategies and repetitive slogans trigger the discourses of Carillion's annual reports by drawing on perspectives from upper echelon theory, impression management and communication patterns. Findings reveal that Carillion’ board strategically use repetitive rhetoric slogans to shape optimistic corporate future performance which might be different from the feasible reality. Finally, the authors argue that corporate executives are striving to construct an alternative reality stem from their initial unrealistic aspiration to lead their sector of less controlled market share. Findings of this study have theoretical and managerial implications.Research limitations/implicationsThe key limitation of this study lies with the case study as the research methodology. Subjectivity remains inherent in interpreting the findings of this study. Future studies may adopt or adapt the authors’ analytical framework to examine other domains underpinning corporate reporting practices.Practical implicationsThe findings of this study have practical implications for boardrooms and policymakers. Findings of this study have theoretical and managerial implications. The level of optimism has its impact on the mood of financial decision-makers, and when there is a high level of optimism, managers may consider making more investment decisions and therefore making many acquisitions. Managerial overconfidence has been widely documented in the literature. Overconfident managers systematically overestimate the probability of good outcomes (and correspondingly underestimate the probability of bad outcomes) resulting from their actions.Social implicationsManagerial overconfidence refers to overestimation of managers' own abilities and out","PeriodicalId":46321,"journal":{"name":"Journal of Applied Accounting Research","volume":" ","pages":""},"PeriodicalIF":3.0,"publicationDate":"2023-01-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41831996","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}
Tujuan penelitian ini adalah untuk mengetahui prosedur pengelolaan DAK pada pendidikan menengah tahun anggaran 2019 pada Dinas Pendidikan Kota Ambon. DAK tahun anggaran 2019 adalah dana yang bersumber dari APBN, dana tersebut dialokasikan kedaerah dalam rangka mendanai kegiatan khusus yang merupakan urusan daerah yang termasuk dalam prioritas nasional. Salah satunya yaitu DAK bidang pendidikan menengah tahun anggaran 2019 yang dialokasikan kesekolah yang digunakan untuk membangun sarana dan prasarana fisik guna meningkatkan mutu pendidikan, dan menciptakan sumberdaya manusia yang lebih berdaya saing. Penelitian ini menggunakan teknik analisa data kualitatif untuk mengetahui bagaimana dinas pendidikan kota Ambon selaku instansi yang bertanggung jawab atas pengelolaan DAK bidang pendidikan menegah tahun anggaran 2019 mampu melaksanakan tugasnya dengan baik, professional dan transparan. Hasil penelitian menunjukan bahwa prosedur pengelolaan DAK bidang pendidikan menengah tahun ajaran 2019 dari tingkat pusat hingga diterima oleh sekolah harus melalui prosedur yang ketat sebelum sekolah penerima DAK mendapatkan DAK tersebut.
{"title":"PROSEDUR PENGELOLAAN DAK PADA DINAS PENDIDIKAN DAN OLAH RAGA KOTA AMBON","authors":"Juliana Kesaulya, S. Musaid","doi":"10.52158/jaa.v1i2.49","DOIUrl":"https://doi.org/10.52158/jaa.v1i2.49","url":null,"abstract":"Tujuan penelitian ini adalah untuk mengetahui prosedur pengelolaan DAK pada pendidikan menengah tahun anggaran 2019 pada Dinas Pendidikan Kota Ambon. DAK tahun anggaran 2019 adalah dana yang bersumber dari APBN, dana tersebut dialokasikan kedaerah dalam rangka mendanai kegiatan khusus yang merupakan urusan daerah yang termasuk dalam prioritas nasional. Salah satunya yaitu DAK bidang pendidikan menengah tahun anggaran 2019 yang dialokasikan kesekolah yang digunakan untuk membangun sarana dan prasarana fisik guna meningkatkan mutu pendidikan, dan menciptakan sumberdaya manusia yang lebih berdaya saing. \u0000Penelitian ini menggunakan teknik analisa data kualitatif untuk mengetahui bagaimana dinas pendidikan kota Ambon selaku instansi yang bertanggung jawab atas pengelolaan DAK bidang pendidikan menegah tahun anggaran 2019 mampu melaksanakan tugasnya dengan baik, professional dan transparan. Hasil penelitian menunjukan bahwa prosedur pengelolaan DAK bidang pendidikan menengah tahun ajaran 2019 dari tingkat pusat hingga diterima oleh sekolah harus melalui prosedur yang ketat sebelum sekolah penerima DAK mendapatkan DAK tersebut.","PeriodicalId":46321,"journal":{"name":"Journal of Applied Accounting Research","volume":"155 1","pages":""},"PeriodicalIF":3.0,"publicationDate":"2022-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"90419341","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 : 2022-12-28DOI: 10.1108/jaar-04-2022-0086
Sahar E-Vahdati, Javad Oradi, J. Nazari
PurposeThis study examines the association between chief executive officer (CEO) gender and the readability of annual reports by considering some demographic attributes of female CEOs.Design/methodology/approachOrdinary least squares (OLS) regression is used to test the research hypotheses on a sample of S&P 500 firms between 2004 and 2016.FindingsThe results show that female CEOs are significantly positively associated with the readability of 10-K reports – in line with ethical-sensitivity theory. Further results show that this association is variable depending on the demographic attributes of female CEOs – in line with upper echelon theory. Specifically, older female CEOs and those with financial expertise are significantly associated with more readable 10-K reports. In contrast, female CEOs hired from within the firm are negatively associated with the readability of 10-K.Research limitations/implicationsThis study provides evidence on the effect of female CEOs and their demographic attributes on annual report readability, which was not addressed in prior research.Practical implicationsThe findings show that the appointment of female CEOs seems like a helpful avenue to reduce concerns among the regulators about the textual complexity of annual reports. However, the most important policy implication of the study is that the decision to appoint female CEOs should be based more on their demographic attributes than on gender equality recommendations and full trust in women's behavioral consequences.Originality/valueThis study contributes to the academic literature on readability and gender. Prior research has not clarified which attributes and skills of female CEOs drive their abilities to improve shareholder value and make more ethical decisions. This study suggests that female CEOs are not better “per se” to improve corporate governance practices, and the impacts of female CEOs are not the same and differ according to their demographic attributes.
{"title":"CEO gender and readability of annual reports: do female CEOs’ demographic attributes matter?","authors":"Sahar E-Vahdati, Javad Oradi, J. Nazari","doi":"10.1108/jaar-04-2022-0086","DOIUrl":"https://doi.org/10.1108/jaar-04-2022-0086","url":null,"abstract":"PurposeThis study examines the association between chief executive officer (CEO) gender and the readability of annual reports by considering some demographic attributes of female CEOs.Design/methodology/approachOrdinary least squares (OLS) regression is used to test the research hypotheses on a sample of S&P 500 firms between 2004 and 2016.FindingsThe results show that female CEOs are significantly positively associated with the readability of 10-K reports – in line with ethical-sensitivity theory. Further results show that this association is variable depending on the demographic attributes of female CEOs – in line with upper echelon theory. Specifically, older female CEOs and those with financial expertise are significantly associated with more readable 10-K reports. In contrast, female CEOs hired from within the firm are negatively associated with the readability of 10-K.Research limitations/implicationsThis study provides evidence on the effect of female CEOs and their demographic attributes on annual report readability, which was not addressed in prior research.Practical implicationsThe findings show that the appointment of female CEOs seems like a helpful avenue to reduce concerns among the regulators about the textual complexity of annual reports. However, the most important policy implication of the study is that the decision to appoint female CEOs should be based more on their demographic attributes than on gender equality recommendations and full trust in women's behavioral consequences.Originality/valueThis study contributes to the academic literature on readability and gender. Prior research has not clarified which attributes and skills of female CEOs drive their abilities to improve shareholder value and make more ethical decisions. This study suggests that female CEOs are not better “per se” to improve corporate governance practices, and the impacts of female CEOs are not the same and differ according to their demographic attributes.","PeriodicalId":46321,"journal":{"name":"Journal of Applied Accounting Research","volume":" ","pages":""},"PeriodicalIF":3.0,"publicationDate":"2022-12-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48907522","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 : 2022-12-27DOI: 10.1108/jaar-03-2022-0055
A. Rohani, Mirna Jabbour, S. Aliyu
PurposeWith the growing attention around carbon emissions disclosure, the demand for external carbon assurance on emissions reports has been increasing by stakeholders as it provides additional credibility and confidence. This study investigates the association between the higher level of external carbon assurance and improvement in a firm's carbon emissions. It provides an understanding of corporate incentives for obtaining a higher level of carbon assurance, particularly in relation to carbon performance enhancements.Design/methodology/approachData are collected from 170 US companies for the period 2012–2017 and are analysed using a change analysis. Generalised method of moment (GMM) is used to address endogeneity.FindingsFollowing the rationales taken by legitimacy and “outside-in” management views, the findings reveal that a higher level of carbon assurance (i.e. reasonable assurance) marginally improves firms' carbon performance (i.e. reported carbon emissions). This is consistent with “outside-in” management view suggesting that a higher level of assurance could be utilised as a tool for accessing more information about stakeholders' needs and concerns, which can be useful in enhancing carbon performance.Research limitations/implicationsThe findings are generalisable to US firms and may not extend to other contexts.Practical implicationsThe implication of this study for companies is that a high level of sustainability assurance is a useful tool to access detailed information about stakeholder concerns, of which internalisation can help to marginally improve carbon performance. For policymakers, the insights into and enhanced understanding of the incentives for obtaining carbon assurance can help policymakers to develop effective policies and initiatives for carbon assurance. Considering the possible improvements in carbon performance when obtaining a high level of sustainability verification, governments need to consider mandating carbon assurance.Originality/valueThis study extends the existing studies of assurance in sustainability context as well as in carbon context by explaining why companies voluntarily get expensive external verification (i.e. higher level of assurance) of their carbon emissions disclosure. This study responds to calls in the literature for empirical research investigating the association between environmental performance and external assurance with a focus on level of assurance.HighlightsA higher level of carbon assurance Marginally improves firms' carbon performance.Corporate incentives to obtain higher level of carbon assurance is beyond seeking legitimacy.Higher level of assurance is a useful tool for accessing more information about stakeholders' concerns.Consistent with “ouside-in”management view, companies internalise stakeholders' concerns to marginally improve performance.
{"title":"Corporate incentives for obtaining higher level of carbon assurance: seeking legitimacy or improving performance?","authors":"A. Rohani, Mirna Jabbour, S. Aliyu","doi":"10.1108/jaar-03-2022-0055","DOIUrl":"https://doi.org/10.1108/jaar-03-2022-0055","url":null,"abstract":"PurposeWith the growing attention around carbon emissions disclosure, the demand for external carbon assurance on emissions reports has been increasing by stakeholders as it provides additional credibility and confidence. This study investigates the association between the higher level of external carbon assurance and improvement in a firm's carbon emissions. It provides an understanding of corporate incentives for obtaining a higher level of carbon assurance, particularly in relation to carbon performance enhancements.Design/methodology/approachData are collected from 170 US companies for the period 2012–2017 and are analysed using a change analysis. Generalised method of moment (GMM) is used to address endogeneity.FindingsFollowing the rationales taken by legitimacy and “outside-in” management views, the findings reveal that a higher level of carbon assurance (i.e. reasonable assurance) marginally improves firms' carbon performance (i.e. reported carbon emissions). This is consistent with “outside-in” management view suggesting that a higher level of assurance could be utilised as a tool for accessing more information about stakeholders' needs and concerns, which can be useful in enhancing carbon performance.Research limitations/implicationsThe findings are generalisable to US firms and may not extend to other contexts.Practical implicationsThe implication of this study for companies is that a high level of sustainability assurance is a useful tool to access detailed information about stakeholder concerns, of which internalisation can help to marginally improve carbon performance. For policymakers, the insights into and enhanced understanding of the incentives for obtaining carbon assurance can help policymakers to develop effective policies and initiatives for carbon assurance. Considering the possible improvements in carbon performance when obtaining a high level of sustainability verification, governments need to consider mandating carbon assurance.Originality/valueThis study extends the existing studies of assurance in sustainability context as well as in carbon context by explaining why companies voluntarily get expensive external verification (i.e. higher level of assurance) of their carbon emissions disclosure. This study responds to calls in the literature for empirical research investigating the association between environmental performance and external assurance with a focus on level of assurance.HighlightsA higher level of carbon assurance Marginally improves firms' carbon performance.Corporate incentives to obtain higher level of carbon assurance is beyond seeking legitimacy.Higher level of assurance is a useful tool for accessing more information about stakeholders' concerns.Consistent with “ouside-in”management view, companies internalise stakeholders' concerns to marginally improve performance.","PeriodicalId":46321,"journal":{"name":"Journal of Applied Accounting Research","volume":" ","pages":""},"PeriodicalIF":3.0,"publicationDate":"2022-12-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46952083","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 : 2022-12-27DOI: 10.1108/jaar-06-2022-0151
Giovanni Zampone, G. Nicolò, Giuseppe Sannino, Serena De Iorio
PurposeThe study examines the association between board gender diversity and Sustainable Development Goal (SDG) disclosure from an international and longitudinal perspective. It also investigates the role of the Sustainability Committee (SC) as a possible factor that can mediate the relationship between board gender diversity and SDG disclosure.Design/methodology/approachThe authors focused on the annual Communication on Progress (CoP) prepared annually by a sample of 526 companies from 39 countries and ten industry sectors along the 2017–2020 period to evaluate the SDG disclosure. Baron and Kenny's (1986) three-step model is estimated to test the impact of the presence of an SC on the SDG disclosure level and the mediating effect exerted by the SC on the relationship between board gender diversity and SDG disclosure.FindingsFindings shed light on the usefulness of the CoP as an alternative reporting tool to communicate progress against SDGs achievement, especially regarding SDGs 13 and 8. This study evidences that board gender diversity positively influences SDG disclosure. The relationship between board gender diversity and SDG disclosure is not only direct but also mediated by the presence of an SC.Research limitations/implicationsCompanies need to consider the role of women in enhancing the effectiveness of their governance mechanisms and their ability to meet stakeholder information needs. Establishing a specific SC represents a valid mechanism that ensures greater transparency about corporate actions tackled to contribute toward SDGs and enhances the relationship between board gender diversity and SDG disclosure among International companies.Practical implicationsThe study's findings offer stimuli for policy-makers and regulators to reflect on the relevance of the CoP as a possible alternative communication tool to provide SDGs information and overcome the limitations of the Sustainability Reports.Originality/valueThis is the first study that examines companies' SDG disclosure practices focusing on CoPs. Further, to the best of the authors' knowledge, this is the first study that tests the relationship between gender diversity and SDG disclosure, considering the mediating effect of an SC committee.
{"title":"Gender diversity and SDG disclosure: the mediating role of the sustainability committee","authors":"Giovanni Zampone, G. Nicolò, Giuseppe Sannino, Serena De Iorio","doi":"10.1108/jaar-06-2022-0151","DOIUrl":"https://doi.org/10.1108/jaar-06-2022-0151","url":null,"abstract":"PurposeThe study examines the association between board gender diversity and Sustainable Development Goal (SDG) disclosure from an international and longitudinal perspective. It also investigates the role of the Sustainability Committee (SC) as a possible factor that can mediate the relationship between board gender diversity and SDG disclosure.Design/methodology/approachThe authors focused on the annual Communication on Progress (CoP) prepared annually by a sample of 526 companies from 39 countries and ten industry sectors along the 2017–2020 period to evaluate the SDG disclosure. Baron and Kenny's (1986) three-step model is estimated to test the impact of the presence of an SC on the SDG disclosure level and the mediating effect exerted by the SC on the relationship between board gender diversity and SDG disclosure.FindingsFindings shed light on the usefulness of the CoP as an alternative reporting tool to communicate progress against SDGs achievement, especially regarding SDGs 13 and 8. This study evidences that board gender diversity positively influences SDG disclosure. The relationship between board gender diversity and SDG disclosure is not only direct but also mediated by the presence of an SC.Research limitations/implicationsCompanies need to consider the role of women in enhancing the effectiveness of their governance mechanisms and their ability to meet stakeholder information needs. Establishing a specific SC represents a valid mechanism that ensures greater transparency about corporate actions tackled to contribute toward SDGs and enhances the relationship between board gender diversity and SDG disclosure among International companies.Practical implicationsThe study's findings offer stimuli for policy-makers and regulators to reflect on the relevance of the CoP as a possible alternative communication tool to provide SDGs information and overcome the limitations of the Sustainability Reports.Originality/valueThis is the first study that examines companies' SDG disclosure practices focusing on CoPs. Further, to the best of the authors' knowledge, this is the first study that tests the relationship between gender diversity and SDG disclosure, considering the mediating effect of an SC committee.","PeriodicalId":46321,"journal":{"name":"Journal of Applied Accounting Research","volume":" ","pages":""},"PeriodicalIF":3.0,"publicationDate":"2022-12-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43055501","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 : 2022-12-27DOI: 10.1108/jaar-02-2022-0040
C. H. Sundkvist, Tonny Stenheim
PurposeThe purpose of this paper is to examine the role family identity and reputational concerns plays when private family firms engage in earnings management.Design/methodology/approachThe paper is conducted as an archival study using data from private limited liability firms in Norway over the period from 2002 to 2015. The dataset includes financial accounting data and data on family relationships between shareholders, board members and CEOs, where family relationships are determined through bloodlines, adoption and marriage, tracing back four generations and extending out to third cousins. To investigate the incidence of earnings management, the authors employ a measure of accrual-based earnings management (AEM) (Dechow and Dichev, 2002; McNichols, 2002) and a measure of real earnings management (REM) (Roychowdhury, 2006). They use whether or not the family name is included in the firm name (i.e. family name congruence) as a proxy for family members' identification with the family firm and their sensitivity to reputational concerns.FindingsThe authors’ results show that AEM is lower for family-named family firms. Moreover, their findings also indicate that family-named family firms are more likely to select REM over AEM, compared to nonfamily named family firms. This is even more pronounced when detection risk is high (high quality audit proxied by Big 4).Research limitations/implicationsThe quality of the authors’ findings is limited to the validity of their proxy for family firm identification and reputational concerns (the family name included in the firm name). Even though findings from prior research suggest that family name congruence is a valid proxy for identity and reputational concerns (e.g. Kashmiri and Mahajan, 2010, 2014; Rousseau et al., 2018; Zellweger et al., 2013), future research should investigate the validity of these results using alternative proxies for family firm identification. Future research should also investigate whether the authors’ findings are generalizable to public family firms.Practical implicationsThe authors’ results suggest that the risk of AEM is lower for family-named family firms, whereas the risk of REM is somewhat higher, compared to nonfamily named family firms. These results might be relevant for financial accounting users, auditors and supervisory and monitoring bodies when assessing the risk of earnings management.Originality/valueThe paper is, as far as the authors are aware of, the first to investigate the role of family name congruence and detection risk when private family firms select between AEM and REM.
本文的目的是研究家族认同和声誉问题在私营家族企业进行盈余管理时所起的作用。设计/方法/方法本文是作为档案研究进行的，使用了2002年至2015年期间挪威私人有限责任公司的数据。该数据集包括财务会计数据以及股东、董事会成员和首席执行官之间的家庭关系数据，其中家庭关系是通过血统、收养和婚姻确定的，可以追溯到四代人，并延伸到第三代表兄弟。为了调查盈余管理的发生率，作者采用了一种基于权责发生制的盈余管理(AEM)的度量(Dechow and Dichev, 2002;McNichols, 2002)和衡量实际盈余管理(REM) (Roychowdhury, 2006)。他们使用姓氏是否包含在企业名称中(即姓氏一致性)作为家庭成员对家族企业的认同及其对声誉问题的敏感性的代理。研究结果表明，家族企业的AEM较低。此外，他们的研究结果还表明，与非家族家族企业相比，家族家族企业更有可能选择REM而不是AEM。当检测风险较高(由四大会计师事务所代理的高质量审计)时，这一点更加明显。研究局限性/启示作者的研究结果的质量仅限于他们对家族企业识别和声誉问题(公司名称中包含的家族名称)的代理的有效性。尽管先前的研究结果表明，姓氏一致性是身份和声誉问题的有效代理(例如Kashmiri和Mahajan, 2010, 2014;Rousseau et al.， 2018;Zellweger等人，2013)，未来的研究应该使用替代代理来调查这些结果的有效性，以确定家族企业。未来的研究还应该调查作者的发现是否可以推广到上市家族企业。实际意义:作者的研究结果表明，与非家族企业相比，家族企业的AEM风险较低，而REM风险略高。这些结果可能与财务会计使用者、审计师和监督和监测机构在评估盈余管理风险时有关。就作者所知，本文是第一个研究家族企业姓氏一致性和发现风险在家族企业在AEM和REM之间选择时所起作用的研究。
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Pub Date : 2022-12-15DOI: 10.1108/jaar-09-2022-0252
Hammed Afolabi, Ronita Ram, K. Hussainey, M. Nandy, S. Lodh
PurposeThe authors explore the behaviour and perspectives of SMEs' owners towards a greener economy and its implications for net zero carbon emissions target.Design/methodology/approachThe authors draw on the mirroring concept and 26 semi-structured interviews with SMEs' owners and managers to provide insights and explore the misalignment between SMEs' actions and perceptions and the technical architecture (and requirements) of achieving net zero carbon emissions in the UK.FindingsThe authors find that SMEs lack trust and are sceptical about the government's net zero emissions agenda. The authors also find that lack of understanding and perceived benefits, and supply chain complexities (end-to-end emissions) are the key factors hindering SMEs interests in engaging with better carbon emissions management and environmental management system (EMS). Moreover, pressure from external stakeholders, particularly banks and customers, is a strong driver to draw SMEs more effectively with sustainability and environmental impact disclosure.Research limitations/implicationsThe sample is limited to 26 SMEs' owners operating in seven industries. Future research could explore the result in other industries. Further research could also investigate how the sustainability reports produced by SMEs are useful for different user groups' decision-making. This study reinforces the social constructionist approach to advance our understanding of SMEs' actions towards carbon emission management and EMS.Practical implicationsThis study shows how government policies and SMEs' interests can be aligned to achieve the net zero carbon emissions target.Originality/valueThis is the first study to examine the perceptions and behaviour of SMEs towards the ongoing pursuit of a greener economy in the UK, including the key factors driving their actions and reasoning.
{"title":"Exploration of small and medium entities' actions on sustainability practices and their implications for a greener economy","authors":"Hammed Afolabi, Ronita Ram, K. Hussainey, M. Nandy, S. Lodh","doi":"10.1108/jaar-09-2022-0252","DOIUrl":"https://doi.org/10.1108/jaar-09-2022-0252","url":null,"abstract":"PurposeThe authors explore the behaviour and perspectives of SMEs' owners towards a greener economy and its implications for net zero carbon emissions target.Design/methodology/approachThe authors draw on the mirroring concept and 26 semi-structured interviews with SMEs' owners and managers to provide insights and explore the misalignment between SMEs' actions and perceptions and the technical architecture (and requirements) of achieving net zero carbon emissions in the UK.FindingsThe authors find that SMEs lack trust and are sceptical about the government's net zero emissions agenda. The authors also find that lack of understanding and perceived benefits, and supply chain complexities (end-to-end emissions) are the key factors hindering SMEs interests in engaging with better carbon emissions management and environmental management system (EMS). Moreover, pressure from external stakeholders, particularly banks and customers, is a strong driver to draw SMEs more effectively with sustainability and environmental impact disclosure.Research limitations/implicationsThe sample is limited to 26 SMEs' owners operating in seven industries. Future research could explore the result in other industries. Further research could also investigate how the sustainability reports produced by SMEs are useful for different user groups' decision-making. This study reinforces the social constructionist approach to advance our understanding of SMEs' actions towards carbon emission management and EMS.Practical implicationsThis study shows how government policies and SMEs' interests can be aligned to achieve the net zero carbon emissions target.Originality/valueThis is the first study to examine the perceptions and behaviour of SMEs towards the ongoing pursuit of a greener economy in the UK, including the key factors driving their actions and reasoning.","PeriodicalId":46321,"journal":{"name":"Journal of Applied Accounting Research","volume":" ","pages":""},"PeriodicalIF":3.0,"publicationDate":"2022-12-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41440750","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 : 2022-12-06DOI: 10.1108/jaar-03-2022-0068
M. Nandy, C. Kuzey, Ali Uyar, S. Lodh, Abdullah S. Karaman
PurposeThis paper focuses exclusively on the drivers and consequences of Global Reporting Initiative (GRI) adoption in sustainability reports with a particular focus on corporate social responsibility (CSR) mechanisms.Design/methodology/approachThe sample includes 63 countries with 4,625 unique firms in these countries and 29,054 firm-year observations between 2002 and 2019. The empirical methodology is logistic and linear regression analyses with country and year fixed effects.FindingsThe findings show that CSR committees and executive CSR compensation stimulate firms' GRI adoption. Furthermore, while GRI adoption enhanced firm value in the earlier period of 2002–2010, it weakened firm value in the later period between 2011 and 2019 implying a loss of value relevance. However, the moderating effect of CSR committees and executive CSR compensation on GRI adoption has led to higher firm value in recent times. A more in-depth investigation of polluting versus non-polluting sectors and weak and strong institutional environments reveals both convergence and divergence respectively among these sub-samples. The results are robust to alternative samplings, alternative methodology and endogeneity concerns.Research limitations/implicationsThe main limitations of the study are the binary nature of key variables, such as CSR committee, executive CSR compensation and GRI adoption, due to the availability of binary data but not continuous data.Practical implicationsFirms allocate substantial funds for SR and following GRI guidelines; hence, the findings guide them on how to ensure the return on this investment.Social implicationsShareholders who particularly pursue socially responsible investment can shape their investment portfolios in firms that engage with sustainability reporting (SR) and GRI adoption practices.Originality/valueIt is not clear in the literature if CSR committees will adopt the GRI for SR because of any incentive. Thus, we examine if the CSR committee and executive CSR compensation can play a direct role in GRI adoption and play a moderating role between GRI adoption and firm value. Moreover, whether GRI adoption and its value relevance might change across periods, sectors (polluting versus non-polluting) and varying institutional environments (investor protection) are addressed in this study.
{"title":"Can CSR mechanisms spur GRI adoption and restore its lost value relevance?","authors":"M. Nandy, C. Kuzey, Ali Uyar, S. Lodh, Abdullah S. Karaman","doi":"10.1108/jaar-03-2022-0068","DOIUrl":"https://doi.org/10.1108/jaar-03-2022-0068","url":null,"abstract":"PurposeThis paper focuses exclusively on the drivers and consequences of Global Reporting Initiative (GRI) adoption in sustainability reports with a particular focus on corporate social responsibility (CSR) mechanisms.Design/methodology/approachThe sample includes 63 countries with 4,625 unique firms in these countries and 29,054 firm-year observations between 2002 and 2019. The empirical methodology is logistic and linear regression analyses with country and year fixed effects.FindingsThe findings show that CSR committees and executive CSR compensation stimulate firms' GRI adoption. Furthermore, while GRI adoption enhanced firm value in the earlier period of 2002–2010, it weakened firm value in the later period between 2011 and 2019 implying a loss of value relevance. However, the moderating effect of CSR committees and executive CSR compensation on GRI adoption has led to higher firm value in recent times. A more in-depth investigation of polluting versus non-polluting sectors and weak and strong institutional environments reveals both convergence and divergence respectively among these sub-samples. The results are robust to alternative samplings, alternative methodology and endogeneity concerns.Research limitations/implicationsThe main limitations of the study are the binary nature of key variables, such as CSR committee, executive CSR compensation and GRI adoption, due to the availability of binary data but not continuous data.Practical implicationsFirms allocate substantial funds for SR and following GRI guidelines; hence, the findings guide them on how to ensure the return on this investment.Social implicationsShareholders who particularly pursue socially responsible investment can shape their investment portfolios in firms that engage with sustainability reporting (SR) and GRI adoption practices.Originality/valueIt is not clear in the literature if CSR committees will adopt the GRI for SR because of any incentive. Thus, we examine if the CSR committee and executive CSR compensation can play a direct role in GRI adoption and play a moderating role between GRI adoption and firm value. Moreover, whether GRI adoption and its value relevance might change across periods, sectors (polluting versus non-polluting) and varying institutional environments (investor protection) are addressed in this study.","PeriodicalId":46321,"journal":{"name":"Journal of Applied Accounting Research","volume":" ","pages":""},"PeriodicalIF":3.0,"publicationDate":"2022-12-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46542801","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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