Pub Date : 2020-08-20DOI: 10.1108/ijaim-07-2020-0099
Siew H. Chan, T. Creel, Qian Song, Y. Yurova
Purpose This study aims to investigate the relationship between companies filing versus those not filing corporate social responsibility (CSR) reports and corporate governance. Design/methodology/approach The websites of US publicly traded companies were examined for commitment to CSR or sustainability reporting based on the preparation of voluntary reports. This information provided the CSR measure, the key independent variable in this study. The data used to compute discretionary accruals (based on the modified Jones model) were obtained from Compustat. Data on auditor tenure were retrieved from Audit Analytics. The number of members and financial experts on an audit committee were gathered from proxy reports filed with the US Securities and Exchange Commission. Findings Companies filing CSR reports have higher audit quality, higher audit committee quality, increased auditor tenure and lower auditor dismissal compared to those not filing CSR reports. The findings support stakeholder theory. Research limitations/implications This study’s utilization of multiple measures of corporate governance provides insight into the robustness of the relationship between CSR reporting and corporate governance. Further, this research uses a different measure of CSR reporting; that is, companies that voluntarily prepared separate CSR reports following or not following the Global Reporting Initiative (GRI) guidelines compared to reports prepared following the GRI guidelines. This approach increases the size and diversity (i.e. industries) of the sample (Kolk, 2003; Waddock and Graves, 1997). Practical implications The findings suggest that companies engage in CSR reporting to indicate strong corporate governance. Originality/value This study uses multiple measures of corporate governance to demonstrate the positive relationship between CSR behavior (measured via filing of CSR reports) and corporate governance.
目的本研究旨在探讨提交企业社会责任报告与未提交企业社会责任报告与公司治理之间的关系。设计/方法/途径美国上市公司的网站在自愿报告的基础上对企业社会责任或可持续发展报告的承诺进行了审查。这些信息提供了企业社会责任衡量标准，这是本研究的关键自变量。用于计算可自由支配应计项目的数据(基于修改后的Jones模型)来自Compustat。关于审计师任期的数据来自审计分析。审计委员会成员和金融专家的人数是根据向美国证券交易委员会(sec)提交的代理报告收集的。与未提交企业社会责任报告的公司相比，提交企业社会责任报告的公司具有更高的审计质量、更高的审计委员会质量、更长的审计师任期和更低的审计师解雇率。研究结果支持利益相关者理论。研究局限/启示本研究采用了多种公司治理指标，为企业社会责任报告与公司治理之间关系的稳健性提供了洞察。此外，本研究采用了不同的CSR报告衡量标准;也就是说，公司自愿编写单独的企业社会责任报告，遵循或不遵循全球报告倡议组织(GRI)的指导方针，与按照GRI指导方针编写的报告进行比较。这种方法增加了样本的规模和多样性(即行业)(Kolk, 2003;Waddock and Graves, 1997)。实践启示:研究结果表明，企业参与企业社会责任报告表明了强大的公司治理。原创性/价值本研究使用公司治理的多种措施来证明企业社会责任行为(通过提交企业社会责任报告来衡量)与公司治理之间的积极关系。
{"title":"Does CSR reporting indicate strong corporate governance?","authors":"Siew H. Chan, T. Creel, Qian Song, Y. Yurova","doi":"10.1108/ijaim-07-2020-0099","DOIUrl":"https://doi.org/10.1108/ijaim-07-2020-0099","url":null,"abstract":"\u0000Purpose\u0000This study aims to investigate the relationship between companies filing versus those not filing corporate social responsibility (CSR) reports and corporate governance.\u0000\u0000\u0000Design/methodology/approach\u0000The websites of US publicly traded companies were examined for commitment to CSR or sustainability reporting based on the preparation of voluntary reports. This information provided the CSR measure, the key independent variable in this study. The data used to compute discretionary accruals (based on the modified Jones model) were obtained from Compustat. Data on auditor tenure were retrieved from Audit Analytics. The number of members and financial experts on an audit committee were gathered from proxy reports filed with the US Securities and Exchange Commission.\u0000\u0000\u0000Findings\u0000Companies filing CSR reports have higher audit quality, higher audit committee quality, increased auditor tenure and lower auditor dismissal compared to those not filing CSR reports. The findings support stakeholder theory.\u0000\u0000\u0000Research limitations/implications\u0000This study’s utilization of multiple measures of corporate governance provides insight into the robustness of the relationship between CSR reporting and corporate governance. Further, this research uses a different measure of CSR reporting; that is, companies that voluntarily prepared separate CSR reports following or not following the Global Reporting Initiative (GRI) guidelines compared to reports prepared following the GRI guidelines. This approach increases the size and diversity (i.e. industries) of the sample (Kolk, 2003; Waddock and Graves, 1997).\u0000\u0000\u0000Practical implications\u0000The findings suggest that companies engage in CSR reporting to indicate strong corporate governance.\u0000\u0000\u0000Originality/value\u0000This study uses multiple measures of corporate governance to demonstrate the positive relationship between CSR behavior (measured via filing of CSR reports) and corporate governance.\u0000","PeriodicalId":46371,"journal":{"name":"International Journal of Accounting and Information Management","volume":"48 1","pages":""},"PeriodicalIF":30.2,"publicationDate":"2020-08-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89576759","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 : 2020-08-20DOI: 10.1108/ijaim-02-2020-0020
Huixiang Zeng, Li Yang, J. Shi
Purpose Internal audit executives instruct the internal audit department to supervise corporate business management activities, evaluate internal controls and risks and provide recommendations for operating. Therefore, this paper aims to confirm whether and how the supervisory ability of the chief internal audit executive enhances the internal audit department’s function to prevent corporate fraud. Based on the results, this paper further researches the role of the supervisory board position in this relationship. Design/methodology/approach This paper examines 922 small and medium-sized listed enterprises in China from 2010 to 2017 and empirically investigates the influence of the internal audit executive’s supervisory ability (IAESA) on the occurrence of corporate fraud. Findings The results reveal that the IAESA is significantly negatively correlated with the occurrence of corporate fraud. This suppression effect is more pronounced when the internal audit executive is also the company’s supervisor. However, if the internal audit executive is the chairman of the board of supervisors, the suppression effect no longer exists. This paper therefore confirms that the IAESA curbs corporate fraud via the improvement of the internal corporate control level. Research limitations/implications Because the sample data was limited by the information disclosure level of the included companies, the sample size was relatively small as compared with those of other studies. Practical implications This study not only expands the research perspective in the field of internal audit functions but also provides a decision-making reference for the prevention of corporate fraud. Social implications This paper extends an approach that might be able to curb corporate fraud. Originality/value A comprehensive index was developed using data envelope analysis to quantify the supervisory ability of internal audit executives. Based on this, this research confirms that the internal audit department performs a “firewall function” to prevent corporate fraud.
{"title":"Does the supervisory ability of internal audit executives affect the occurrence of corporate fraud? Evidence from small and medium-sized listed enterprises in China","authors":"Huixiang Zeng, Li Yang, J. Shi","doi":"10.1108/ijaim-02-2020-0020","DOIUrl":"https://doi.org/10.1108/ijaim-02-2020-0020","url":null,"abstract":"\u0000Purpose\u0000Internal audit executives instruct the internal audit department to supervise corporate business management activities, evaluate internal controls and risks and provide recommendations for operating. Therefore, this paper aims to confirm whether and how the supervisory ability of the chief internal audit executive enhances the internal audit department’s function to prevent corporate fraud. Based on the results, this paper further researches the role of the supervisory board position in this relationship.\u0000\u0000\u0000Design/methodology/approach\u0000This paper examines 922 small and medium-sized listed enterprises in China from 2010 to 2017 and empirically investigates the influence of the internal audit executive’s supervisory ability (IAESA) on the occurrence of corporate fraud.\u0000\u0000\u0000Findings\u0000The results reveal that the IAESA is significantly negatively correlated with the occurrence of corporate fraud. This suppression effect is more pronounced when the internal audit executive is also the company’s supervisor. However, if the internal audit executive is the chairman of the board of supervisors, the suppression effect no longer exists. This paper therefore confirms that the IAESA curbs corporate fraud via the improvement of the internal corporate control level.\u0000\u0000\u0000Research limitations/implications\u0000Because the sample data was limited by the information disclosure level of the included companies, the sample size was relatively small as compared with those of other studies.\u0000\u0000\u0000Practical implications\u0000This study not only expands the research perspective in the field of internal audit functions but also provides a decision-making reference for the prevention of corporate fraud.\u0000\u0000\u0000Social implications\u0000This paper extends an approach that might be able to curb corporate fraud.\u0000\u0000\u0000Originality/value\u0000A comprehensive index was developed using data envelope analysis to quantify the supervisory ability of internal audit executives. Based on this, this research confirms that the internal audit department performs a “firewall function” to prevent corporate fraud.\u0000","PeriodicalId":46371,"journal":{"name":"International Journal of Accounting and Information Management","volume":"1 1","pages":""},"PeriodicalIF":30.2,"publicationDate":"2020-08-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"88039539","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 : 2020-08-10DOI: 10.1108/IJAIM-07-2020-0109
R. Salem, Ernest Ezeani, A. Gerged, M. Usman, R. M. Alqatamin
Purpose This study aims to examine the influence of the quality of voluntary disclosure (QVD) on earnings management (EM) amongst a sample of commercial banks in the Middle East and North Africa (MENA) region. Design/methodology/approach Using a sample of 1,060 bank-year observations for the period 2006–2015, this paper developed a three-dimensional framework to measure the QVD, which considers the quantity, spread and usefulness of the information. Furthermore, this study examines the QVD-EM nexus using an ordinary least squares regression model. This technique is supplemented with conducting an instrumental variable regression model and a two-stage least squares model to overcome the potential occurrence of endogeneity problems. Findings The findings suggest that QVD is negatively attributed to EM in the context of MENA banks. The findings also confirm that the quality of financial reporting is enhanced by QVD dimensions that were considered in the framework, leading banks to less engagement in EM practices. In contrast, the influence of the quantity dimension (level) of the disclosed information has an insignificant impact on EM, while the spread and usefulness dimensions of VD are negatively and significantly associated with EM in the region. Research limitations/implications Although the results are robust to various measurements and to the possible occurrence of endogeneity problems, there are a few limitations should be acknowledged, which provides opportunities for future research. For example, the sample size is relatively small due to data accessibility issues. Likewise, the findings of the research might not be appropriate for non-financial sectors. These limitations provide a good opportunity for future studies to expand on the research by covering other developing economies and, thereby, enriching the understanding offered by this study. Practical implications This study offers several implications for bank managers, academics and policymakers. Firstly, it may help managers to appreciate the function and the importance of QVD in mitigating EM. Secondly, for academics, the study provides suggestive evidence on the impact of QVD on EM; however, future research may need to consider the role of morality and ethical behaviour across different environments in reducing excessive risk-taking and constraining earnings manipulation. Finally, it provides insights for policymakers and regulators to develop a framework or guidance that can help banks in providing high-QVD in the context of developing economies. Originality/value The study distinctively develops an innovative measurement for QVD using a new multi-dimensional model. This paper also bring new evidence on QVD complexity and its impact on EM practice from an under-researched developing context, namely, the MENA region.
{"title":"Does the quality of voluntary disclosure constrain earnings management in emerging economies? Evidence from Middle Eastern and North African banks","authors":"R. Salem, Ernest Ezeani, A. Gerged, M. Usman, R. M. Alqatamin","doi":"10.1108/IJAIM-07-2020-0109","DOIUrl":"https://doi.org/10.1108/IJAIM-07-2020-0109","url":null,"abstract":"\u0000Purpose\u0000This study aims to examine the influence of the quality of voluntary disclosure (QVD) on earnings management (EM) amongst a sample of commercial banks in the Middle East and North Africa (MENA) region.\u0000\u0000\u0000Design/methodology/approach\u0000Using a sample of 1,060 bank-year observations for the period 2006–2015, this paper developed a three-dimensional framework to measure the QVD, which considers the quantity, spread and usefulness of the information. Furthermore, this study examines the QVD-EM nexus using an ordinary least squares regression model. This technique is supplemented with conducting an instrumental variable regression model and a two-stage least squares model to overcome the potential occurrence of endogeneity problems.\u0000\u0000\u0000Findings\u0000The findings suggest that QVD is negatively attributed to EM in the context of MENA banks. The findings also confirm that the quality of financial reporting is enhanced by QVD dimensions that were considered in the framework, leading banks to less engagement in EM practices. In contrast, the influence of the quantity dimension (level) of the disclosed information has an insignificant impact on EM, while the spread and usefulness dimensions of VD are negatively and significantly associated with EM in the region.\u0000\u0000\u0000Research limitations/implications\u0000Although the results are robust to various measurements and to the possible occurrence of endogeneity problems, there are a few limitations should be acknowledged, which provides opportunities for future research. For example, the sample size is relatively small due to data accessibility issues. Likewise, the findings of the research might not be appropriate for non-financial sectors. These limitations provide a good opportunity for future studies to expand on the research by covering other developing economies and, thereby, enriching the understanding offered by this study.\u0000\u0000\u0000Practical implications\u0000This study offers several implications for bank managers, academics and policymakers. Firstly, it may help managers to appreciate the function and the importance of QVD in mitigating EM. Secondly, for academics, the study provides suggestive evidence on the impact of QVD on EM; however, future research may need to consider the role of morality and ethical behaviour across different environments in reducing excessive risk-taking and constraining earnings manipulation. Finally, it provides insights for policymakers and regulators to develop a framework or guidance that can help banks in providing high-QVD in the context of developing economies.\u0000\u0000\u0000Originality/value\u0000The study distinctively develops an innovative measurement for QVD using a new multi-dimensional model. This paper also bring new evidence on QVD complexity and its impact on EM practice from an under-researched developing context, namely, the MENA region.\u0000","PeriodicalId":46371,"journal":{"name":"International Journal of Accounting and Information Management","volume":"7 1","pages":""},"PeriodicalIF":30.2,"publicationDate":"2020-08-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81727158","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 : 2020-08-03DOI: 10.1108/ijaim-05-2020-0068
B. Cancela, M. E. Neves, L. L. Rodrigues, A. Dias
Purpose - In the macroeconomic environment of the Iberian Peninsula, this paper aims to examine the influence of corporate governance characteristics on corporate sustainability performance. The purpose of this paper is to address corporate practices while determining which corporate governance characteristics can improve corporate sustainability, considering, for this purpose, three dimensions of sustainability: economic, environmental and social. Design/methodology/approach - This sample comprises 99 non-financial companies of the Iberian Peninsula, during the 2013–2017 period. The authors have used the panel data methodology, specifically the generalized method of moments (GMM) estimation method proposed by Arellano and Bover (1995) and Blundell and Bond (1998) to test the hypotheses formulated. Findings - The results obtained have shown that corporate sustainability performance is affected differently depending on the sustainability dimension that is considered. Specifically, the economic dimension is determined by public debt, the board size, board diversity and the existence of an audit committee. Regarding the environmental dimension, the board size and the presence of the audit committee, as well the corporate social responsibility committee, are the most important determinants. Finally, the social dimension was influenced by the board size, audit committee and the control variable of capital structure, which means that in this dimension, the sources of financing used by the company also help in determining its levels of social concern. Originality/value - To the best of the authors’ knowledge, this is the first time that a study has been carried out in the Iberian Peninsula on the corporate sustainability using GMM-system model for three dimensions of sustainability. Corporate sustainability depends on external and internal factors of companies. Therefore, regulators and managers should realize that they will have to be more effective in their statements.
{"title":"The influence of corporate governance on corporate sustainability: new evidence using panel data in the Iberian macroeconomic environment","authors":"B. Cancela, M. E. Neves, L. L. Rodrigues, A. Dias","doi":"10.1108/ijaim-05-2020-0068","DOIUrl":"https://doi.org/10.1108/ijaim-05-2020-0068","url":null,"abstract":"Purpose - In the macroeconomic environment of the Iberian Peninsula, this paper aims to examine the influence of corporate governance characteristics on corporate sustainability performance. The purpose of this paper is to address corporate practices while determining which corporate governance characteristics can improve corporate sustainability, considering, for this purpose, three dimensions of sustainability: economic, environmental and social. Design/methodology/approach - This sample comprises 99 non-financial companies of the Iberian Peninsula, during the 2013–2017 period. The authors have used the panel data methodology, specifically the generalized method of moments (GMM) estimation method proposed by Arellano and Bover (1995) and Blundell and Bond (1998) to test the hypotheses formulated. Findings - The results obtained have shown that corporate sustainability performance is affected differently depending on the sustainability dimension that is considered. Specifically, the economic dimension is determined by public debt, the board size, board diversity and the existence of an audit committee. Regarding the environmental dimension, the board size and the presence of the audit committee, as well the corporate social responsibility committee, are the most important determinants. Finally, the social dimension was influenced by the board size, audit committee and the control variable of capital structure, which means that in this dimension, the sources of financing used by the company also help in determining its levels of social concern. Originality/value - To the best of the authors’ knowledge, this is the first time that a study has been carried out in the Iberian Peninsula on the corporate sustainability using GMM-system model for three dimensions of sustainability. Corporate sustainability depends on external and internal factors of companies. Therefore, regulators and managers should realize that they will have to be more effective in their statements.","PeriodicalId":46371,"journal":{"name":"International Journal of Accounting and Information Management","volume":"39 1","pages":"785-806"},"PeriodicalIF":30.2,"publicationDate":"2020-08-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"78565831","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 : 2020-07-16DOI: 10.1108/ijaim-11-2019-0135
Dimu Ehalaiye, M. Tippett, Tony Zijl
The purpose of this paper is to investigate whether levels-classified fair values of US banks based on SFAS 157: Fair Value Measurements, as recognised in the quarterly financial statements of the banks over the period from 2008 until 2015, have predictive value in relation to the banks’ future financial performance measured by operating cash flows and earnings over a three-quarter horizon period. In addition, we consider whether the global financial crisis (GFC) impacted the relationship between SFAS 157–based levels‐classified fair values and bank future financial performance.,We develop hypotheses connecting the net levels-classified bank fair values based on SFAS 157 with banks’ future financial performance. We test the hypotheses by estimating three-period quarters’ ahead forecasting models. We also use these models to test for the impact of the GFC on the relationship between the fair values and future financial performance.,Our findings suggest that the levels-classified net fair values based on SFAS 157 have predictive value in relation to future cash flows for banks. There is significant variation, across the levels, in the predictive value of levels-classified net fair values for future performance. Our findings indicate that the GFC has limited impact on the predictive value for cash flows, but the GFC had a significant adverse impact on earnings, and, with allowance for the effect of the GFC, the Level 2 net fair values have predictive value for the future earnings.,The study provides the first direct empirical evidence on the relationship between the SFAS 157 levels-classified quarterly bank fair values recognised in publicly available financial statements and banks’ future performance. Our results are consistent with the findings from earlier research (Ehalaiye et al., 2017) using annual data disclosed in the supplementary notes to the financial statements of US banks based on SFAS 107. The study, makes a significant contribution to the question of frequency of reporting and to the disclosure vs recognition debate. The study has implications for policy makers, regulators and accounting standards setters such as the Securities and Exchange Commission and the Financial Accounting Standards Board in evaluating the use of fair value measurement in financial reporting.
本文的目的是调查美国银行基于SFAS 157:公允价值计量的水平分类公允价值，如银行在2008年至2015年期间的季度财务报表中所确认的，是否具有与银行未来财务业绩相关的预测价值，这些财务业绩是通过三个季度的经营性现金流和收益来衡量的。此外，我们还考虑了全球金融危机(GFC)是否影响了基于SFAS 157的分类公允价值水平与银行未来财务绩效之间的关系。我们提出了将基于SFAS 157的净水平分类银行公允价值与银行未来财务业绩联系起来的假设。我们通过估计三个季度的预测模型来检验这些假设。我们还使用这些模型来检验全球金融危机对公允价值与未来财务绩效之间关系的影响。我们的研究结果表明，基于SFAS 157的水平分类净公允价值对银行的未来现金流量具有预测价值。在不同水平上，按水平分类的公允净值对未来业绩的预测值存在显著差异。我们的研究结果表明，全球金融危机对现金流预测值的影响有限，但全球金融危机对收益有显著的不利影响，并且，考虑到全球金融危机的影响，二级公允净值对未来收益具有预测价值。该研究首次提供了直接的经验证据，证明了在公开财务报表中确认的按水平分类的季度银行公允价值与银行未来业绩之间的关系。我们的结果与早期研究(Ehalaiye et al.， 2017)的结果一致，该研究使用了基于SFAS 107的美国银行财务报表补充说明中披露的年度数据。该研究对报告频率问题和披露与确认辩论作出了重大贡献。这项研究对政策制定者、监管机构和会计准则制定者(如美国证券交易委员会和财务会计准则委员会)在评估财务报告中公允价值计量的使用方面具有启示意义。
{"title":"The impact of SFAS 157 on fair value accounting and future bank performance","authors":"Dimu Ehalaiye, M. Tippett, Tony Zijl","doi":"10.1108/ijaim-11-2019-0135","DOIUrl":"https://doi.org/10.1108/ijaim-11-2019-0135","url":null,"abstract":"The purpose of this paper is to investigate whether levels-classified fair values of US banks based on SFAS 157: Fair Value Measurements, as recognised in the quarterly financial statements of the banks over the period from 2008 until 2015, have predictive value in relation to the banks’ future financial performance measured by operating cash flows and earnings over a three-quarter horizon period. In addition, we consider whether the global financial crisis (GFC) impacted the relationship between SFAS 157–based levels‐classified fair values and bank future financial performance.,We develop hypotheses connecting the net levels-classified bank fair values based on SFAS 157 with banks’ future financial performance. We test the hypotheses by estimating three-period quarters’ ahead forecasting models. We also use these models to test for the impact of the GFC on the relationship between the fair values and future financial performance.,Our findings suggest that the levels-classified net fair values based on SFAS 157 have predictive value in relation to future cash flows for banks. There is significant variation, across the levels, in the predictive value of levels-classified net fair values for future performance. Our findings indicate that the GFC has limited impact on the predictive value for cash flows, but the GFC had a significant adverse impact on earnings, and, with allowance for the effect of the GFC, the Level 2 net fair values have predictive value for the future earnings.,The study provides the first direct empirical evidence on the relationship between the SFAS 157 levels-classified quarterly bank fair values recognised in publicly available financial statements and banks’ future performance. Our results are consistent with the findings from earlier research (Ehalaiye et al., 2017) using annual data disclosed in the supplementary notes to the financial statements of US banks based on SFAS 107. The study, makes a significant contribution to the question of frequency of reporting and to the disclosure vs recognition debate. The study has implications for policy makers, regulators and accounting standards setters such as the Securities and Exchange Commission and the Financial Accounting Standards Board in evaluating the use of fair value measurement in financial reporting.","PeriodicalId":46371,"journal":{"name":"International Journal of Accounting and Information Management","volume":"22 1","pages":"739-757"},"PeriodicalIF":30.2,"publicationDate":"2020-07-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82062294","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 : 2020-06-20DOI: 10.1108/ijaim-02-2020-0016
Ling Yang, Lijun Ruan, Fengchun Tang
Purpose The purpose of this study is to present the results of an experiment that examines the effects of client management’s increased disclosure of related party transactions (RPTs) on auditors’ judgments of financial reports that contain RPTs. Design/methodology/approach This study used a 2 × 2 between-subjects experiment to investigate auditors’ judgments in response to questionable RPTs in a Chinese context. Findings The results show that the auditor participants assessed a lower likelihood that the client’s financial statements were intentionally misstated and that they were less likely to request additional evidence when the client management chose to disclose more, as opposed to less, detailed RPT information in their disclosure. Moreover, there was a significant interaction between disclosure level and client incentive to manipulate earnings on the likelihood of the auditor requesting additional evidence. Practical implications This study should be of interest to regulatory agencies that have expressed concerns over auditing practices related to RPTs. Originality/value The findings from this study help to provide a more in-depth understanding of disclosure literature by investigating voluntary RPT disclosure and the moderation role of clients’ incentives to manipulate earnings.
{"title":"The impact of disclosure level and client incentive on auditors’ judgments of related party transactions","authors":"Ling Yang, Lijun Ruan, Fengchun Tang","doi":"10.1108/ijaim-02-2020-0016","DOIUrl":"https://doi.org/10.1108/ijaim-02-2020-0016","url":null,"abstract":"\u0000Purpose\u0000The purpose of this study is to present the results of an experiment that examines the effects of client management’s increased disclosure of related party transactions (RPTs) on auditors’ judgments of financial reports that contain RPTs.\u0000\u0000\u0000Design/methodology/approach\u0000This study used a 2 × 2 between-subjects experiment to investigate auditors’ judgments in response to questionable RPTs in a Chinese context.\u0000\u0000\u0000Findings\u0000The results show that the auditor participants assessed a lower likelihood that the client’s financial statements were intentionally misstated and that they were less likely to request additional evidence when the client management chose to disclose more, as opposed to less, detailed RPT information in their disclosure. Moreover, there was a significant interaction between disclosure level and client incentive to manipulate earnings on the likelihood of the auditor requesting additional evidence.\u0000\u0000\u0000Practical implications\u0000This study should be of interest to regulatory agencies that have expressed concerns over auditing practices related to RPTs.\u0000\u0000\u0000Originality/value\u0000The findings from this study help to provide a more in-depth understanding of disclosure literature by investigating voluntary RPT disclosure and the moderation role of clients’ incentives to manipulate earnings.\u0000","PeriodicalId":46371,"journal":{"name":"International Journal of Accounting and Information Management","volume":"29 1","pages":""},"PeriodicalIF":30.2,"publicationDate":"2020-06-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81398380","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 : 2020-06-01DOI: 10.1108/ijaim-03-2020-0031
Yue’e Long, Xinyi Huang
Purpose - The purpose of this paper is to investigate the impacts of equity incentive on stock pricing efficiency, as well as the institutional investors’ response to equity incentive and its role in stock pricing efficiency. Design/methodology/approach - Using a sample of 1,842 companies that announce implementing equity incentive schemes during the period 2009-2018, the authors compare the pricing efficiency between the firms with equity incentive and those without equity incentive, and companies that implement equity incentive before and after the implementation of equity incentive by using multiple regression and propensity score matching -DID (difference in difference) method. In addition, the multiple regression model is built to test the response of institutional investors to equity incentive and its role in the efficiency of stock pricing. Findings - The empirical results indicate that a company’s stock price is influenced more by firm-specific information than systematic factors after it announces a stock-based compensation scheme. Institutional investors respond positively to companies that implement equity incentives. Among the companies that have implement equity incentive, the higher the shareholding ratio of institutional investors, the higher the efficiency of stock pricing. Originality/value - The authors innovatively establish a connection between the implementation of equity incentive and the operation of stock market. The results imply that besides alleviating the agency problem, equity incentives can also improve the efficiency of stock pricing, which provide empirical evidence to support the positive effect of equity incentive.
目的——本文的目的是研究股权激励对股票定价效率的影响，以及机构投资者对股权激励的反应及其在股票定价效率中的作用。设计/方法/方法-以2009-2018年期间宣布实施股权激励计划的1842家公司为样本，作者使用多元回归和倾向得分匹配- did (difference in difference)方法，比较了实施股权激励计划的公司与未实施股权激励计划的公司以及实施股权激励计划前后的公司之间的定价效率。建立多元回归模型，检验机构投资者对股权激励的反应及其对股票定价效率的影响。研究发现-实证结果表明，公司公布股票薪酬方案后，股价受公司特定信息的影响大于系统因素的影响。机构投资者对实施股权激励的公司反应积极。在实施股权激励的公司中，机构投资者持股比例越高，股票定价效率越高。原创性/价值——作者创新性地建立了股权激励实施与股票市场运行之间的联系。研究结果表明，股权激励除了可以缓解代理问题外，还可以提高股票定价效率，为股权激励的积极效应提供了实证证据。
{"title":"Do equity incentives for the managements have impact on stock-pricing efficiency? Evidence from China","authors":"Yue’e Long, Xinyi Huang","doi":"10.1108/ijaim-03-2020-0031","DOIUrl":"https://doi.org/10.1108/ijaim-03-2020-0031","url":null,"abstract":"Purpose - The purpose of this paper is to investigate the impacts of equity incentive on stock pricing efficiency, as well as the institutional investors’ response to equity incentive and its role in stock pricing efficiency. Design/methodology/approach - Using a sample of 1,842 companies that announce implementing equity incentive schemes during the period 2009-2018, the authors compare the pricing efficiency between the firms with equity incentive and those without equity incentive, and companies that implement equity incentive before and after the implementation of equity incentive by using multiple regression and propensity score matching -DID (difference in difference) method. In addition, the multiple regression model is built to test the response of institutional investors to equity incentive and its role in the efficiency of stock pricing. Findings - The empirical results indicate that a company’s stock price is influenced more by firm-specific information than systematic factors after it announces a stock-based compensation scheme. Institutional investors respond positively to companies that implement equity incentives. Among the companies that have implement equity incentive, the higher the shareholding ratio of institutional investors, the higher the efficiency of stock pricing. Originality/value - The authors innovatively establish a connection between the implementation of equity incentive and the operation of stock market. The results imply that besides alleviating the agency problem, equity incentives can also improve the efficiency of stock pricing, which provide empirical evidence to support the positive effect of equity incentive.","PeriodicalId":46371,"journal":{"name":"International Journal of Accounting and Information Management","volume":"38 1","pages":"703-715"},"PeriodicalIF":30.2,"publicationDate":"2020-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74633037","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 : 2020-06-01DOI: 10.1108/ijaim-01-2020-0002
Niharika Dayyala, S. Zaidi, K. Bagchi
Purpose This study aims to examine the diffusion pattern of International Financial Reporting Standards (IFRS) into the countries and identifies the channels of diffusion. Design/methodology/approach Data includes 98 countries that made a public commitment to IFRS adoption from 2000 to 2016. Adoptee countries are categorized based on Rogers’ adopter categorizations to understand country characteristics. Innovation diffusion models such as internal influence, external influence and bass diffusion that explain diffusion patterns are applied to the cumulative adoption of IFRS. Coefficients of internal and external diffusion are obtained using the models to explain the mode of diffusion pattern of IFRS. Further tests are done to identify the best model that explains IFRS diffusion. Findings Findings show that IFRS diffusion is a result of external influence through vertical communication from a centralized body (IASB) and internal influence due to imitation and interpersonal communication between countries. Imitation effect among the countries has a stronger effect on the IFRS adoption compared to the communication obtained from IASB. Practical implications Findings obtained can help standards-setting bodies, organizations and countries to understand the potential future of adopters and non-adopters. It facilitates the standard-setting bodies to manage IFRS diffusion by implementing measures to spread the word on the benefits of IFRS. Originality/value The study generates value by modeling a successive increase in the number of IFRS adoptee countries using empirical methods and identifies the reasons for the diffusion life cycle of IFRS.
{"title":"Diffusion of IFRS using innovation diffusion models","authors":"Niharika Dayyala, S. Zaidi, K. Bagchi","doi":"10.1108/ijaim-01-2020-0002","DOIUrl":"https://doi.org/10.1108/ijaim-01-2020-0002","url":null,"abstract":"\u0000Purpose\u0000This study aims to examine the diffusion pattern of International Financial Reporting Standards (IFRS) into the countries and identifies the channels of diffusion.\u0000\u0000\u0000Design/methodology/approach\u0000Data includes 98 countries that made a public commitment to IFRS adoption from 2000 to 2016. Adoptee countries are categorized based on Rogers’ adopter categorizations to understand country characteristics. Innovation diffusion models such as internal influence, external influence and bass diffusion that explain diffusion patterns are applied to the cumulative adoption of IFRS. Coefficients of internal and external diffusion are obtained using the models to explain the mode of diffusion pattern of IFRS. Further tests are done to identify the best model that explains IFRS diffusion.\u0000\u0000\u0000Findings\u0000Findings show that IFRS diffusion is a result of external influence through vertical communication from a centralized body (IASB) and internal influence due to imitation and interpersonal communication between countries. Imitation effect among the countries has a stronger effect on the IFRS adoption compared to the communication obtained from IASB.\u0000\u0000\u0000Practical implications\u0000Findings obtained can help standards-setting bodies, organizations and countries to understand the potential future of adopters and non-adopters. It facilitates the standard-setting bodies to manage IFRS diffusion by implementing measures to spread the word on the benefits of IFRS.\u0000\u0000\u0000Originality/value\u0000The study generates value by modeling a successive increase in the number of IFRS adoptee countries using empirical methods and identifies the reasons for the diffusion life cycle of IFRS.\u0000","PeriodicalId":46371,"journal":{"name":"International Journal of Accounting and Information Management","volume":"8 1","pages":""},"PeriodicalIF":30.2,"publicationDate":"2020-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89372173","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 : 2020-05-29DOI: 10.1108/IJAIM-08-2019-0103
Mohd Shukor Harun, K. Hussainey, Khairul Ayuni Mohd Kharuddin, O. Farooque
Purpose This study aims to explore the corporate social responsibility disclosure (CSRD) practices of the Islamic banks in the Gulf Cooperation Council (GCC) countries during the period 2010-2014 and examines the determinants of CSRD and its effects on firm value. Design/methodology/approach Based on the Accounting and Auditing Organization for Islamic Financial Institutions Governance Standard No. 7 guidelines and using content analysis, the paper develops a comprehensive CSRD index for GCC Islamic banks. The study applies ordinary least squares regression analysis for hypothesis testing and for finding determinants of respective dependent variables. Findings The results show a very low level of CSRD among the sample Islamic banks in GCC countries. When using corporate governance characteristics to examine the determinants of CSRD, this study provides evidence of a significant positive association between board size and CSRD practice in Islamic banks and a significant negative relationship of chief executive officer (CEO) duality with CSRD, as per expectation. For the economic consequences of CSRD, the study documents an inverse performance effect of CSRD while board size, board composition and CEO duality indicate significant positive effects on firm value. Research limitations/implications The relatively small sample size of GCC Islamic banks may limit the application of the findings to other Islamic financial institutions such as Takaful and the Islamic unit trust company. Practical implications The findings of this study initiate the global debate on the need for corporate governance reform in Islamic banks by providing insights on the role played by corporate governance mechanisms in encouraging and enhancing CSRD practices among Islamic banks. The findings also have important implications for investors, managers, regulatory bodies, policymakers and Islamic banks in the GCC countries. Social implications The results of the study do not support the idea that Islamic banks operating on Islamic principles can meet their social responsibilities through promoting corporate social responsibility (CSR) activities and by differentiating themselves from non-Islamic banks. Originality/value This is the first study to examine the determinants of CSRD in GCC Islamic banks using comprehensive CSRD and corporate governance variables and, therefore, adds value to the existing CSR literature in banking.
{"title":"CSR Disclosure, Corporate Governance and Firm Value: a study on GCC Islamic Banks","authors":"Mohd Shukor Harun, K. Hussainey, Khairul Ayuni Mohd Kharuddin, O. Farooque","doi":"10.1108/IJAIM-08-2019-0103","DOIUrl":"https://doi.org/10.1108/IJAIM-08-2019-0103","url":null,"abstract":"\u0000Purpose\u0000This study aims to explore the corporate social responsibility disclosure (CSRD) practices of the Islamic banks in the Gulf Cooperation Council (GCC) countries during the period 2010-2014 and examines the determinants of CSRD and its effects on firm value.\u0000\u0000\u0000Design/methodology/approach\u0000Based on the Accounting and Auditing Organization for Islamic Financial Institutions Governance Standard No. 7 guidelines and using content analysis, the paper develops a comprehensive CSRD index for GCC Islamic banks. The study applies ordinary least squares regression analysis for hypothesis testing and for finding determinants of respective dependent variables.\u0000\u0000\u0000Findings\u0000The results show a very low level of CSRD among the sample Islamic banks in GCC countries. When using corporate governance characteristics to examine the determinants of CSRD, this study provides evidence of a significant positive association between board size and CSRD practice in Islamic banks and a significant negative relationship of chief executive officer (CEO) duality with CSRD, as per expectation. For the economic consequences of CSRD, the study documents an inverse performance effect of CSRD while board size, board composition and CEO duality indicate significant positive effects on firm value.\u0000\u0000\u0000Research limitations/implications\u0000The relatively small sample size of GCC Islamic banks may limit the application of the findings to other Islamic financial institutions such as Takaful and the Islamic unit trust company.\u0000\u0000\u0000Practical implications\u0000The findings of this study initiate the global debate on the need for corporate governance reform in Islamic banks by providing insights on the role played by corporate governance mechanisms in encouraging and enhancing CSRD practices among Islamic banks. The findings also have important implications for investors, managers, regulatory bodies, policymakers and Islamic banks in the GCC countries.\u0000\u0000\u0000Social implications\u0000The results of the study do not support the idea that Islamic banks operating on Islamic principles can meet their social responsibilities through promoting corporate social responsibility (CSR) activities and by differentiating themselves from non-Islamic banks.\u0000\u0000\u0000Originality/value\u0000This is the first study to examine the determinants of CSRD in GCC Islamic banks using comprehensive CSRD and corporate governance variables and, therefore, adds value to the existing CSR literature in banking.\u0000","PeriodicalId":46371,"journal":{"name":"International Journal of Accounting and Information Management","volume":"14 1","pages":""},"PeriodicalIF":30.2,"publicationDate":"2020-05-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81563277","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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