Pub Date : 2022-01-05DOI: 10.1108/ijaim-07-2021-0135
Maria I. Kyriakou
Purpose This paper aims to examine the impact of the recent financial crisis on audit quality by analysing discretionary accruals. Design/methodology/approach This study considers a sample of German, French, Italian and Spanish non-financial firms from 2005 to 2013 to investigate the auditor’s independence. It uses a cross-sectional and time-series ordinary least squares regression model to control for other predictors of the auditor’s independence when the financial crisis produces a decrease in audit quality. Findings The proportion of the non-financial firms having lower audit quality was higher during the financial crisis. In addition, during the crisis auditors were less likely to provide a higher audit quality for these non-financial firms. The level of audit quality returned to normal levels during the post-crisis years when the crisis had ceased. Originality/value These findings contribute to the literature on the impact of economic and financial changes on audit quality. In addition, this research finds that the Big Four accounting firms provide a higher audit quality in different circumstances from non-Big Four accounting firms, and that audit quality decreased during the crisis and returned to normal in the post-crisis period.
{"title":"The effect of the financial crisis on audit quality: European evidence","authors":"Maria I. Kyriakou","doi":"10.1108/ijaim-07-2021-0135","DOIUrl":"https://doi.org/10.1108/ijaim-07-2021-0135","url":null,"abstract":"\u0000Purpose\u0000This paper aims to examine the impact of the recent financial crisis on audit quality by analysing discretionary accruals.\u0000\u0000\u0000Design/methodology/approach\u0000This study considers a sample of German, French, Italian and Spanish non-financial firms from 2005 to 2013 to investigate the auditor’s independence. It uses a cross-sectional and time-series ordinary least squares regression model to control for other predictors of the auditor’s independence when the financial crisis produces a decrease in audit quality.\u0000\u0000\u0000Findings\u0000The proportion of the non-financial firms having lower audit quality was higher during the financial crisis. In addition, during the crisis auditors were less likely to provide a higher audit quality for these non-financial firms. The level of audit quality returned to normal levels during the post-crisis years when the crisis had ceased.\u0000\u0000\u0000Originality/value\u0000These findings contribute to the literature on the impact of economic and financial changes on audit quality. In addition, this research finds that the Big Four accounting firms provide a higher audit quality in different circumstances from non-Big Four accounting firms, and that audit quality decreased during the crisis and returned to normal in the post-crisis period.\u0000","PeriodicalId":46371,"journal":{"name":"International Journal of Accounting and Information Management","volume":"2062 1","pages":""},"PeriodicalIF":30.2,"publicationDate":"2022-01-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86548724","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 : 2021-12-16DOI: 10.1108/ijaim-06-2021-0126
Michael Cipriano, Elizabeth T. Cole, J. Briggs
Purpose Studies show firms reporting using Generally Accepted Accounting Principles in the United States (US GAAP) and International Financial Reporting Standards (IFRS) are similarly valued in the market, however, these studies are limited due to the noise present in international studies from regulatory differences. This study aims to eliminate much of this noise by using a cleaner sample of all listings with the Securities Exchange Commission (SEC). This paper also looks at more detailed book value figures. Design/methodology/approach There have been previous studies on the differences in market valuation of firms reporting using IFRS vs US GAAP. Most of this research is confounded with difficulties due to different regulatory environments and volatile time periods. The study uses cleaner data following the SEC’s acceptance of IFRS financials without a 20-F Reconciliation. The authors use a large sample of non-US firms trading on US exchanges choosing to use either US GAAP or IFRS for SEC reporting purposes. The sample period starts two years after the SEC’s acceptance of IFRS financials without a 20-F reconciliation and is larger than earlier samples. Findings The authors show that there is no difference between IFRS and US GAAP firms’ overall value relevance, however, earnings are more value relevant when measured using IFRS and book value is more value relevant when measured using US GAAP. The authors find that the difference between US GAAP and IFRS can be explained, at least in part, by greater market multiples being placed on inventories and goodwill using US GAAP. This is offset in part by greater multiples being placed on other assets under IFRS. Originality/value The authors replicate earlier studies but also extend with a better sample and more detailed finings.
{"title":"Value relevance and market valuation of assets measured using IFRS and US GAAP in the US equity market","authors":"Michael Cipriano, Elizabeth T. Cole, J. Briggs","doi":"10.1108/ijaim-06-2021-0126","DOIUrl":"https://doi.org/10.1108/ijaim-06-2021-0126","url":null,"abstract":"\u0000Purpose\u0000Studies show firms reporting using Generally Accepted Accounting Principles in the United States (US GAAP) and International Financial Reporting Standards (IFRS) are similarly valued in the market, however, these studies are limited due to the noise present in international studies from regulatory differences. This study aims to eliminate much of this noise by using a cleaner sample of all listings with the Securities Exchange Commission (SEC). This paper also looks at more detailed book value figures.\u0000\u0000\u0000Design/methodology/approach\u0000There have been previous studies on the differences in market valuation of firms reporting using IFRS vs US GAAP. Most of this research is confounded with difficulties due to different regulatory environments and volatile time periods. The study uses cleaner data following the SEC’s acceptance of IFRS financials without a 20-F Reconciliation. The authors use a large sample of non-US firms trading on US exchanges choosing to use either US GAAP or IFRS for SEC reporting purposes. The sample period starts two years after the SEC’s acceptance of IFRS financials without a 20-F reconciliation and is larger than earlier samples.\u0000\u0000\u0000Findings\u0000The authors show that there is no difference between IFRS and US GAAP firms’ overall value relevance, however, earnings are more value relevant when measured using IFRS and book value is more value relevant when measured using US GAAP. The authors find that the difference between US GAAP and IFRS can be explained, at least in part, by greater market multiples being placed on inventories and goodwill using US GAAP. This is offset in part by greater multiples being placed on other assets under IFRS.\u0000\u0000\u0000Originality/value\u0000The authors replicate earlier studies but also extend with a better sample and more detailed finings.\u0000","PeriodicalId":46371,"journal":{"name":"International Journal of Accounting and Information Management","volume":"7 1","pages":""},"PeriodicalIF":30.2,"publicationDate":"2021-12-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"78570744","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 : 2021-12-07DOI: 10.1108/ijaim-05-2021-0109
Chen-Wen Chen, Abeer Hassan
Purpose This paper aims to contribute to the discussion on the executives’ team and firm performance by investigating the relationships between executives’ compensation, management gender diversity and firm financial performance in growth enterprises market (GEM) listed firms in China. Design/methodology/approach Data are collected from 461 companies listed on GEM boards during the period from the year 2016 to 2018. Specifically, executives’ compensation and female executives are set as the independent variables, and the proxy selected of corporate performance is Tobin’s Q ratio. Findings The results show that the correlation between corporate performance and executive cash payment is not significant, while executives’ equity-based compensation shows a significant positive correlation with firm performance. In addition, the participation of female executives is negatively associated with firm performance. Research limitations/implications The results have practical implications for governments, policymakers and regulatory authorities, by indicating the importance of women to corporate success. In particular, the findings of this paper emphasize the specific background of GEM in China and provide empirical support for the value of women’s participation in corporate governance. In addition, the finding on the relationship between executive compensation and corporate performance of GEM listed companies provides guidance for the establishment of a performance compensation system of GEM listed companies in China. Originality/value This paper provides new evidence for the current literature of executive team and corporate performance. This is the first paper to adopt triangulation in theories from different disciplines including optimal contractual approach, managerial power approach as new perspectives of agency theory, upper echelons theory, motivational-hygiene theory and women leadership style theory. The results will contribute to provide guidance for enterprises to formulate an efficient compensation system and build a reasonable senior management team structure.
{"title":"Management gender diversity, executives compensation and firm performance","authors":"Chen-Wen Chen, Abeer Hassan","doi":"10.1108/ijaim-05-2021-0109","DOIUrl":"https://doi.org/10.1108/ijaim-05-2021-0109","url":null,"abstract":"\u0000Purpose\u0000This paper aims to contribute to the discussion on the executives’ team and firm performance by investigating the relationships between executives’ compensation, management gender diversity and firm financial performance in growth enterprises market (GEM) listed firms in China.\u0000\u0000\u0000Design/methodology/approach\u0000Data are collected from 461 companies listed on GEM boards during the period from the year 2016 to 2018. Specifically, executives’ compensation and female executives are set as the independent variables, and the proxy selected of corporate performance is Tobin’s Q ratio.\u0000\u0000\u0000Findings\u0000The results show that the correlation between corporate performance and executive cash payment is not significant, while executives’ equity-based compensation shows a significant positive correlation with firm performance. In addition, the participation of female executives is negatively associated with firm performance.\u0000\u0000\u0000Research limitations/implications\u0000The results have practical implications for governments, policymakers and regulatory authorities, by indicating the importance of women to corporate success. In particular, the findings of this paper emphasize the specific background of GEM in China and provide empirical support for the value of women’s participation in corporate governance. In addition, the finding on the relationship between executive compensation and corporate performance of GEM listed companies provides guidance for the establishment of a performance compensation system of GEM listed companies in China.\u0000\u0000\u0000Originality/value\u0000This paper provides new evidence for the current literature of executive team and corporate performance. This is the first paper to adopt triangulation in theories from different disciplines including optimal contractual approach, managerial power approach as new perspectives of agency theory, upper echelons theory, motivational-hygiene theory and women leadership style theory. The results will contribute to provide guidance for enterprises to formulate an efficient compensation system and build a reasonable senior management team structure.\u0000","PeriodicalId":46371,"journal":{"name":"International Journal of Accounting and Information Management","volume":"76 1","pages":""},"PeriodicalIF":30.2,"publicationDate":"2021-12-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73909394","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 : 2021-11-16DOI: 10.1108/ijaim-06-2021-0117
Elena Fedorova, S. Druchok, P. Drogovoz
Purpose The goal of the study is to examine the effects of news sentiment and topics dominating in the news field prior to the initial public offering (IPO) on the IPO underpricing. Design/methodology/approach The authors’ approach has several steps. The first is textual analysis. To detect the dominating topics in the news, the authors use Latent Dirichlet allocation. The authors use bidirectional encoder representations from transformers (BERT) pretrained on financial news corpus to evaluate the tonality of articles. The second is evaluation of feature importance. To this end, a linear regression with robust estimators and Classification and Regression Tree and Random Forest are used. The third is data. The text data consists of 345,731 news articles from Thomson Reuters related to the USA in the date range from 1 January 2011 to 31 May 2018. The data contains all the possible topics from the website, excluding anything related to sports. The sample of 386 initial public offerings completed in the USA from 1 January 2011 to 31 May 2018 was collected from Bloomberg Database. Findings The authors found that sentiment of the media regarding the companies going public influences IPO underpricing. Some topics, namely, the climate change and environmental policies and the trade war between the US and China, have influence on IPO underpricing if they appear in the media prior to the IPO day. Originality/value The puzzle of IPO underpricing is studied from the point of Narrative Economics theory for the first time. While most of the works cover only some specific news segment, we use Thomson Reuters news aggregator, which uses such sources The New York Post, CNN, Fox, Atlantic, The Washington Post ? Buzzfeed. To evaluate the sentiment of the articles, a state-of-the-art approach BERT is used. The hypothesis that some common narratives or topics in the public discussion may impose influence on such example of biased behaviour like IPO underpricing has also found confirmation.
{"title":"Impact of news sentiment and topics on IPO underpricing: US evidence","authors":"Elena Fedorova, S. Druchok, P. Drogovoz","doi":"10.1108/ijaim-06-2021-0117","DOIUrl":"https://doi.org/10.1108/ijaim-06-2021-0117","url":null,"abstract":"\u0000Purpose\u0000The goal of the study is to examine the effects of news sentiment and topics dominating in the news field prior to the initial public offering (IPO) on the IPO underpricing.\u0000\u0000\u0000Design/methodology/approach\u0000The authors’ approach has several steps. The first is textual analysis. To detect the dominating topics in the news, the authors use Latent Dirichlet allocation. The authors use bidirectional encoder representations from transformers (BERT) pretrained on financial news corpus to evaluate the tonality of articles. The second is evaluation of feature importance. To this end, a linear regression with robust estimators and Classification and Regression Tree and Random Forest are used. The third is data. The text data consists of 345,731 news articles from Thomson Reuters related to the USA in the date range from 1 January 2011 to 31 May 2018. The data contains all the possible topics from the website, excluding anything related to sports. The sample of 386 initial public offerings completed in the USA from 1 January 2011 to 31 May 2018 was collected from Bloomberg Database.\u0000\u0000\u0000Findings\u0000The authors found that sentiment of the media regarding the companies going public influences IPO underpricing. Some topics, namely, the climate change and environmental policies and the trade war between the US and China, have influence on IPO underpricing if they appear in the media prior to the IPO day.\u0000\u0000\u0000Originality/value\u0000The puzzle of IPO underpricing is studied from the point of Narrative Economics theory for the first time. While most of the works cover only some specific news segment, we use Thomson Reuters news aggregator, which uses such sources The New York Post, CNN, Fox, Atlantic, The Washington Post ? Buzzfeed. To evaluate the sentiment of the articles, a state-of-the-art approach BERT is used. The hypothesis that some common narratives or topics in the public discussion may impose influence on such example of biased behaviour like IPO underpricing has also found confirmation.\u0000","PeriodicalId":46371,"journal":{"name":"International Journal of Accounting and Information Management","volume":"25 1","pages":""},"PeriodicalIF":30.2,"publicationDate":"2021-11-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"85563163","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 : 2021-11-01DOI: 10.1108/ijaim-09-2021-0183
Siew H. Chan, Qian Song
Purpose This study investigates whether consideration of future consequences (CFC), Machiavellianism (MACH) and the perceived role of ethics and social responsibility (PRESOR) enhance understanding of the impact of tax audit risk on compliance. Design/methodology/approach A between-subjects experiment is conducted to test the hypotheses. A hypothetical tax audit case (or lack thereof) is used to create a high (low) perceived tax audit risk. The usable responses of 144 participants representing the general taxpayer population are analyzed. Findings The results suggest that taxpayers with lower CFC, MACH or PRESOR scores are more compliant when tax audit risk is high than low. In contrast, taxpayers with higher CFC, MACH or PRESOR scores are indifferent toward high or low tax audit risk. Research limitations/implications Research can elicit consideration of future consequences of being detected for taxpayers with lower CFC scores to increase compliance. Additionally, increased saliency of tax audit risk and detection of noncompliance in a tax audit can enhance the compliance of taxpayers with lower MACH scores. Dissemination of information via social media on the value of ethical and social responsibility of compliance can also increase the compliance of taxpayers with higher PRESOR scores. Practical implications This study helps researchers and the tax authority better understand the complexities of compliance and the ethical dilemmas that taxpayers face, especially when a considerable amount of cash income is involved. To deter underreporting of cash income, the tax authority can use social media to explain how data analytics tools can facilitate the analysis and integration of multiple sources of a taxpayer’s income and expenses. Originality/value Prior studies present participants with objective tax audit rates, such as 5, 25 and 30 (Cullis et al., 2006; Maciejovsky et al., 2007; Trivedi et al., 2003) or 50% (Maciejovsky et al., 2012) to investigate tax compliance. However, the actual tax audit rate is very low (about 1%) due to the limited resources of the tax authority (Alm and Torgler, 2011). To attenuate perceptions of unrealistic tax audit rates, this study operationalizes high (low) tax audit risk via a hypothetical tax audit case (or lack thereof) to examine the impact of tax audit risk on compliance.
目的本研究探讨未来后果(CFC)、马基雅维利主义(MACH)和道德与社会责任(PRESOR)的感知作用是否能增强对税务审计风险对合规影响的理解。设计/方法/方法进行受试者间实验以检验假设。假设的税务审计案例(或缺乏案例)用于创建高(低)感知税务审计风险。对代表一般纳税人群体的144名参与者的可用回答进行了分析。结果表明，当税务审计风险高时，CFC、MACH或PRESOR得分较低的纳税人的合规程度较低。相比之下，CFC、MACH或PRESOR得分较高的纳税人对高、低税务审计风险漠不关心。研究的局限性/意义研究可以引起对CFC分数较低的纳税人被发现的未来后果的考虑，以提高依从性。此外，在税务审计中增加税务审计风险的显著性和对不合规的发现可以提高马赫分数较低的纳税人的合规性。通过社交媒体传播关于合规的道德和社会责任价值的信息也可以提高PRESOR得分较高的纳税人的合规程度。实际意义本研究有助于研究人员和税务机关更好地理解合规的复杂性和纳税人面临的道德困境，特别是当涉及大量现金收入时。为了防止少报现金收入，税务机关可以使用社交媒体来解释数据分析工具如何促进对纳税人收入和支出的多个来源的分析和整合。先前的研究向参与者展示了客观的税务审计税率，如5,25和30 (Cullis等人，2006;Maciejovsky et al.， 2007;Trivedi et al.， 2003)或50% (Maciejovsky et al.， 2012)调查税务合规性。然而，由于税务机关的资源有限，实际的税务审计率很低(约为1%)(Alm和Torgler, 2011)。为了减轻人们对不现实的税务审计率的看法，本研究通过一个假设的税务审计案例(或缺乏案例)来操作高(低)税务审计风险，以检验税务审计风险对合规的影响。
{"title":"Implications of tax audit risk, consequences, aggressive behavior and ethics for compliance","authors":"Siew H. Chan, Qian Song","doi":"10.1108/ijaim-09-2021-0183","DOIUrl":"https://doi.org/10.1108/ijaim-09-2021-0183","url":null,"abstract":"\u0000Purpose\u0000This study investigates whether consideration of future consequences (CFC), Machiavellianism (MACH) and the perceived role of ethics and social responsibility (PRESOR) enhance understanding of the impact of tax audit risk on compliance.\u0000\u0000\u0000Design/methodology/approach\u0000A between-subjects experiment is conducted to test the hypotheses. A hypothetical tax audit case (or lack thereof) is used to create a high (low) perceived tax audit risk. The usable responses of 144 participants representing the general taxpayer population are analyzed.\u0000\u0000\u0000Findings\u0000The results suggest that taxpayers with lower CFC, MACH or PRESOR scores are more compliant when tax audit risk is high than low. In contrast, taxpayers with higher CFC, MACH or PRESOR scores are indifferent toward high or low tax audit risk.\u0000\u0000\u0000Research limitations/implications\u0000Research can elicit consideration of future consequences of being detected for taxpayers with lower CFC scores to increase compliance. Additionally, increased saliency of tax audit risk and detection of noncompliance in a tax audit can enhance the compliance of taxpayers with lower MACH scores. Dissemination of information via social media on the value of ethical and social responsibility of compliance can also increase the compliance of taxpayers with higher PRESOR scores.\u0000\u0000\u0000Practical implications\u0000This study helps researchers and the tax authority better understand the complexities of compliance and the ethical dilemmas that taxpayers face, especially when a considerable amount of cash income is involved. To deter underreporting of cash income, the tax authority can use social media to explain how data analytics tools can facilitate the analysis and integration of multiple sources of a taxpayer’s income and expenses.\u0000\u0000\u0000Originality/value\u0000Prior studies present participants with objective tax audit rates, such as 5, 25 and 30 (Cullis et al., 2006; Maciejovsky et al., 2007; Trivedi et al., 2003) or 50% (Maciejovsky et al., 2012) to investigate tax compliance. However, the actual tax audit rate is very low (about 1%) due to the limited resources of the tax authority (Alm and Torgler, 2011). To attenuate perceptions of unrealistic tax audit rates, this study operationalizes high (low) tax audit risk via a hypothetical tax audit case (or lack thereof) to examine the impact of tax audit risk on compliance.\u0000","PeriodicalId":46371,"journal":{"name":"International Journal of Accounting and Information Management","volume":"155 1 1","pages":""},"PeriodicalIF":30.2,"publicationDate":"2021-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"72515119","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 : 2021-10-29DOI: 10.1108/ijaim-04-2021-0085
V. Tawiah
Purpose This study aims to examine whether the impact of international financial reporting standards (IFRS) on audit fees differs between early and late adopters. Design/methodology/approach The authors use robust econometric estimation on a sample of 314 firms from both early and late IFRS adopting countries. Findings The authors find that IFRS is positively and significantly associated with an increase in audit fees for early adopters, but the impact is very weak for late adopters and insignificant in some cases. The results on auditing time suggest that increase in audit fees around IFRS adoption is due to an increase in audit reporting lags. After accounting for pre- and post-years, the authors find that the relationship between IFRS and audit fees, as well as audit time for late adopters, is significant only in the adoption year. However, early adopters experience a significant increase in audit fees and audit time in the transition year to one-year post-adoption. Practical implications The findings imply that countries that are yet to adopt IFRS are less likely to experience a significant increase in audit fees audit time. Hence, is probable that the benefit of IFRS will outweigh the cost. Originality/value The results, therefore, suggest that early adopters paid a premium for been the first users of IFRS, which is consistent with any innovation. The study provides new insights by demonstrating that the consequences of IFRS differ between early and late adopters.
{"title":"Does the impact of IFRS on audit fees differ between early and late adopters?","authors":"V. Tawiah","doi":"10.1108/ijaim-04-2021-0085","DOIUrl":"https://doi.org/10.1108/ijaim-04-2021-0085","url":null,"abstract":"\u0000Purpose\u0000This study aims to examine whether the impact of international financial reporting standards (IFRS) on audit fees differs between early and late adopters.\u0000\u0000\u0000Design/methodology/approach\u0000The authors use robust econometric estimation on a sample of 314 firms from both early and late IFRS adopting countries.\u0000\u0000\u0000Findings\u0000The authors find that IFRS is positively and significantly associated with an increase in audit fees for early adopters, but the impact is very weak for late adopters and insignificant in some cases. The results on auditing time suggest that increase in audit fees around IFRS adoption is due to an increase in audit reporting lags. After accounting for pre- and post-years, the authors find that the relationship between IFRS and audit fees, as well as audit time for late adopters, is significant only in the adoption year. However, early adopters experience a significant increase in audit fees and audit time in the transition year to one-year post-adoption.\u0000\u0000\u0000Practical implications\u0000The findings imply that countries that are yet to adopt IFRS are less likely to experience a significant increase in audit fees audit time. Hence, is probable that the benefit of IFRS will outweigh the cost.\u0000\u0000\u0000Originality/value\u0000The results, therefore, suggest that early adopters paid a premium for been the first users of IFRS, which is consistent with any innovation. The study provides new insights by demonstrating that the consequences of IFRS differ between early and late adopters.\u0000","PeriodicalId":46371,"journal":{"name":"International Journal of Accounting and Information Management","volume":"54 1","pages":""},"PeriodicalIF":30.2,"publicationDate":"2021-10-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89209838","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 : 2021-10-29DOI: 10.1108/ijaim-07-2021-0155
Y. Rao, Ken H. Guo
Purpose The US Securities and Exchange Commission (SEC) requires public companies to file structured data in eXtensible Business Reporting Language (XBRL). One of the key arguments behind the XBRL mandate is that the technical standard can help improve processing efficiency for data aggregators. This paper aims to empirically test the data processing efficiency hypothesis. Design/methodology/approach To test the data processing efficiency hypothesis, the authors adopt a two-sample research design by using data from Compustat: a pooled sample (N = 61,898) and a quasi-experimental sample (N = 564). The authors measure data processing efficiency as the time lag between the dates of 10-K filings on the SEC’s EDGAR system and the dates of related data finalized in the Compustat database. Findings The statistical results show that after controlling for potential effects of firm size, age, fiscal year and industry, XBRL has a non-significant impact on data efficiency. It suggests that the data processing efficiency benefit may have been overestimated. Originality/value This study provides some timely empirical evidence to the debate as to whether XBRL can improve data processing efficiency. The non-significant results suggest that it may be necessary to revisit the mandate of XBRL reporting in the USA and many other countries.
{"title":"Does XBRL help improve data processing efficiency?","authors":"Y. Rao, Ken H. Guo","doi":"10.1108/ijaim-07-2021-0155","DOIUrl":"https://doi.org/10.1108/ijaim-07-2021-0155","url":null,"abstract":"\u0000Purpose\u0000The US Securities and Exchange Commission (SEC) requires public companies to file structured data in eXtensible Business Reporting Language (XBRL). One of the key arguments behind the XBRL mandate is that the technical standard can help improve processing efficiency for data aggregators. This paper aims to empirically test the data processing efficiency hypothesis.\u0000\u0000\u0000Design/methodology/approach\u0000To test the data processing efficiency hypothesis, the authors adopt a two-sample research design by using data from Compustat: a pooled sample (N = 61,898) and a quasi-experimental sample (N = 564). The authors measure data processing efficiency as the time lag between the dates of 10-K filings on the SEC’s EDGAR system and the dates of related data finalized in the Compustat database.\u0000\u0000\u0000Findings\u0000The statistical results show that after controlling for potential effects of firm size, age, fiscal year and industry, XBRL has a non-significant impact on data efficiency. It suggests that the data processing efficiency benefit may have been overestimated.\u0000\u0000\u0000Originality/value\u0000This study provides some timely empirical evidence to the debate as to whether XBRL can improve data processing efficiency. The non-significant results suggest that it may be necessary to revisit the mandate of XBRL reporting in the USA and many other countries.\u0000","PeriodicalId":46371,"journal":{"name":"International Journal of Accounting and Information Management","volume":"94 1","pages":""},"PeriodicalIF":30.2,"publicationDate":"2021-10-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"88405029","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 : 2021-10-28DOI: 10.1108/ijaim-07-2021-0137
A. Issa, Mohammad A. A. Zaid, J. Hanaysha, Ammar Ali Gull
Purpose The purpose of this study is to examine the impact of board diversity (e.g. education, gender, nationality and royal family members) on voluntary corporate social responsibility (CSR) disclosure for a sample of banks listed in the Arabian Gulf Council countries. Design/methodology/approach The authors use the Global Reporting Initiative guidelines to construct the CSR disclosure index. The empirical analysis is based on the data of banks listed in the Gulf Cooperation Council countries over the period 2011–2019. To tackle the potential issue of endogeneity, the authors apply the system generalized method of moments (GMM) estimation approach to investigate the relationship between board diversity and CSR disclosure index. Findings The findings of the analysis show that there is a significant relationship between board diversity and the level of voluntary CSR disclosure. Specifically, the authors find that diversity captured by the education level, nationality and the presence of royal family members on board is positively associated with the level of voluntary CSR disclosure while diversity captured by the gender of board members is negatively associated with the level of voluntary CSR disclosure. Practical implications The regulators, policymakers, stakeholders and the board of directors become aware of the diversity mechanisms that must be used to promote CSR practices in the banking sector of Arabian Gulf countries. Originality/value The authors extend the existing literature by providing empirical evidence on the association between board diversity and voluntary CSR disclosure practices of banks operating in the Arabian Gulf countries. This study also highlights that board gender diversity may have a different impact on voluntary CSR disclosure between developed countries and developing countries. This paper also provides preliminary evidence on the importance of education level, the presence of foreign and royal directors on board to influence CSR practices of banks operating in the Arabian Gulf countries.
{"title":"An examination of board diversity and corporate social responsibility disclosure: evidence from banking sector in the Arabian Gulf countries","authors":"A. Issa, Mohammad A. A. Zaid, J. Hanaysha, Ammar Ali Gull","doi":"10.1108/ijaim-07-2021-0137","DOIUrl":"https://doi.org/10.1108/ijaim-07-2021-0137","url":null,"abstract":"\u0000Purpose\u0000The purpose of this study is to examine the impact of board diversity (e.g. education, gender, nationality and royal family members) on voluntary corporate social responsibility (CSR) disclosure for a sample of banks listed in the Arabian Gulf Council countries.\u0000\u0000\u0000Design/methodology/approach\u0000The authors use the Global Reporting Initiative guidelines to construct the CSR disclosure index. The empirical analysis is based on the data of banks listed in the Gulf Cooperation Council countries over the period 2011–2019. To tackle the potential issue of endogeneity, the authors apply the system generalized method of moments (GMM) estimation approach to investigate the relationship between board diversity and CSR disclosure index.\u0000\u0000\u0000Findings\u0000The findings of the analysis show that there is a significant relationship between board diversity and the level of voluntary CSR disclosure. Specifically, the authors find that diversity captured by the education level, nationality and the presence of royal family members on board is positively associated with the level of voluntary CSR disclosure while diversity captured by the gender of board members is negatively associated with the level of voluntary CSR disclosure.\u0000\u0000\u0000Practical implications\u0000The regulators, policymakers, stakeholders and the board of directors become aware of the diversity mechanisms that must be used to promote CSR practices in the banking sector of Arabian Gulf countries.\u0000\u0000\u0000Originality/value\u0000The authors extend the existing literature by providing empirical evidence on the association between board diversity and voluntary CSR disclosure practices of banks operating in the Arabian Gulf countries. This study also highlights that board gender diversity may have a different impact on voluntary CSR disclosure between developed countries and developing countries. This paper also provides preliminary evidence on the importance of education level, the presence of foreign and royal directors on board to influence CSR practices of banks operating in the Arabian Gulf countries.\u0000","PeriodicalId":46371,"journal":{"name":"International Journal of Accounting and Information Management","volume":"22 1","pages":""},"PeriodicalIF":30.2,"publicationDate":"2021-10-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84130597","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 : 2021-10-27DOI: 10.1108/ijaim-07-2021-0141
Yanxi Li, S. Ouyang
Purpose The purpose of this study is to examine the impact of controlling shareholders’ share pledging on goodwill impairment. Design/methodology/approach This study empirically investigates the effect of controlling shareholders’ share pledging on both the decision and amount of goodwill impairment for Chinese listed firms from 2007 to 2017. Findings This study finds that the proportion of controlling shareholders’ share pledging is negatively related to both impairment decisions and amounts; these negative relationships are intensified when firms face high stock price crash risks. In addition, the empirical results show that firms with larger share pledging are less likely to recognize goodwill impairment or are likely to record relatively smaller impairment amounts when they are followed by fewer financial analysts. Originality/value Most of the relevant literature has focused on managers’ behaviors toward goodwill impairments, while less attention has been given to goodwill impairments from the perspective of controlling shareholders. In fact, controlling shareholders may have strong incentives to protect their control rights when they exercise disproportionate control rights, especially in China. Given the high ownership concentration, prior studies may not have adequately explained the agency problem of controlling shareholders in goodwill impairment. This study uses share pledging as a case to fill this gap. Specifically, it investigates whether both goodwill impairment decisions and amounts are affected by controlling shareholders’ share pledging.
{"title":"Do controlling shareholders share pledging affect goodwill impairment? Evidence from China","authors":"Yanxi Li, S. Ouyang","doi":"10.1108/ijaim-07-2021-0141","DOIUrl":"https://doi.org/10.1108/ijaim-07-2021-0141","url":null,"abstract":"\u0000Purpose\u0000The purpose of this study is to examine the impact of controlling shareholders’ share pledging on goodwill impairment.\u0000\u0000\u0000Design/methodology/approach\u0000This study empirically investigates the effect of controlling shareholders’ share pledging on both the decision and amount of goodwill impairment for Chinese listed firms from 2007 to 2017.\u0000\u0000\u0000Findings\u0000This study finds that the proportion of controlling shareholders’ share pledging is negatively related to both impairment decisions and amounts; these negative relationships are intensified when firms face high stock price crash risks. In addition, the empirical results show that firms with larger share pledging are less likely to recognize goodwill impairment or are likely to record relatively smaller impairment amounts when they are followed by fewer financial analysts.\u0000\u0000\u0000Originality/value\u0000Most of the relevant literature has focused on managers’ behaviors toward goodwill impairments, while less attention has been given to goodwill impairments from the perspective of controlling shareholders. In fact, controlling shareholders may have strong incentives to protect their control rights when they exercise disproportionate control rights, especially in China. Given the high ownership concentration, prior studies may not have adequately explained the agency problem of controlling shareholders in goodwill impairment. This study uses share pledging as a case to fill this gap. Specifically, it investigates whether both goodwill impairment decisions and amounts are affected by controlling shareholders’ share pledging.\u0000","PeriodicalId":46371,"journal":{"name":"International Journal of Accounting and Information Management","volume":"33 1","pages":""},"PeriodicalIF":30.2,"publicationDate":"2021-10-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"79821923","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}
Purpose The aim of this study is to evaluate of the predictive ability of goodwill and other intangible assets on forecasting corporate profitability. Subsequently, this study compares the efficiency of deep learning model to that of other machine learning models such as random forest (RF) and support vector machine (SVM) as well as traditional statistical methods such as the linear regression model. Design/methodology/approach Studies confirm that goodwill and intangibles are valuable assets that give companies a competitive advantage to increase profitability and shareholders’ returns. Thus, by using as sample Greek-listed financial data, this study investigates whether or not the inclusion of goodwill and intangible assets as input variables in this modified deep learning models contribute to the corporate profitability prediction accuracy. Subsequently, this study compares the modified long-short-term model with other machine learning models such as SVMs and RF as well as the traditional panel regression model. Findings The findings of this paper confirm that goodwill and intangible assets clearly improve the performance of a deep learning corporate profitability prediction model. Furthermore, this study provides evidence that the modified long short-term memory model outperforms other machine learning models such as SVMs and RF , as well as traditional statistical panel regression model, in predicting corporate profitability. Research limitations/implications Limitation of this study includes the relatively small amount of data available. Furthermore, the aim is to challenge the authors’ modified long short-term memory by using listed corporate data of Greece, a code-law country that suffered severely during the recent fiscal crisis. However, this study proposes that future research may apply deep learning corporate profitability models on a bigger pool of data such as STOXX Europe 600 companies. Practical implications Subsequently, the authors believe that their paper is of interest to different professional groups, such as financial analysts and banks, which the authors’ paper can support in their corporate profitability evaluation procedure. Furthermore, as well as shareholders are concerned, this paper could be of benefit in forecasting management’s potential to create future returns. Finally, management may incorporate this model in the evaluation process of potential acquisitions of other companies. Originality/value The contributions of this work can be summarized in the following aspects. This study provides evidence that by including goodwill and other intangible assets in the authors’ input portfolio, prediction errors represented by root mean squared error are reduced. A modified long short-term memory model is proposed to predict the numerical value of the profitability (or the profitability ratio) in contrast to other studies which deal with trend predictions, i.e. the binomial output result of positive or negative ea
{"title":"Can intangible assets predict future performance? A deep learning approach","authors":"Pechlivanidis Eleftherios, Ginoglou Dimitrios, Barmpoutis Panagiotis","doi":"10.1108/ijaim-06-2021-0124","DOIUrl":"https://doi.org/10.1108/ijaim-06-2021-0124","url":null,"abstract":"\u0000Purpose\u0000The aim of this study is to evaluate of the predictive ability of goodwill and other intangible assets on forecasting corporate profitability. Subsequently, this study compares the efficiency of deep learning model to that of other machine learning models such as random forest (RF) and support vector machine (SVM) as well as traditional statistical methods such as the linear regression model.\u0000\u0000\u0000Design/methodology/approach\u0000Studies confirm that goodwill and intangibles are valuable assets that give companies a competitive advantage to increase profitability and shareholders’ returns. Thus, by using as sample Greek-listed financial data, this study investigates whether or not the inclusion of goodwill and intangible assets as input variables in this modified deep learning models contribute to the corporate profitability prediction accuracy. Subsequently, this study compares the modified long-short-term model with other machine learning models such as SVMs and RF as well as the traditional panel regression model.\u0000\u0000\u0000Findings\u0000The findings of this paper confirm that goodwill and intangible assets clearly improve the performance of a deep learning corporate profitability prediction model. Furthermore, this study provides evidence that the modified long short-term memory model outperforms other machine learning models such as SVMs and RF , as well as traditional statistical panel regression model, in predicting corporate profitability.\u0000\u0000\u0000Research limitations/implications\u0000Limitation of this study includes the relatively small amount of data available. Furthermore, the aim is to challenge the authors’ modified long short-term memory by using listed corporate data of Greece, a code-law country that suffered severely during the recent fiscal crisis. However, this study proposes that future research may apply deep learning corporate profitability models on a bigger pool of data such as STOXX Europe 600 companies.\u0000\u0000\u0000Practical implications\u0000Subsequently, the authors believe that their paper is of interest to different professional groups, such as financial analysts and banks, which the authors’ paper can support in their corporate profitability evaluation procedure. Furthermore, as well as shareholders are concerned, this paper could be of benefit in forecasting management’s potential to create future returns. Finally, management may incorporate this model in the evaluation process of potential acquisitions of other companies.\u0000\u0000\u0000Originality/value\u0000The contributions of this work can be summarized in the following aspects. This study provides evidence that by including goodwill and other intangible assets in the authors’ input portfolio, prediction errors represented by root mean squared error are reduced. A modified long short-term memory model is proposed to predict the numerical value of the profitability (or the profitability ratio) in contrast to other studies which deal with trend predictions, i.e. the binomial output result of positive or negative ea","PeriodicalId":46371,"journal":{"name":"International Journal of Accounting and Information Management","volume":"14 1","pages":""},"PeriodicalIF":30.2,"publicationDate":"2021-10-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"76882374","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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