Pub Date : 2020-11-17DOI: 10.1142/s109440602050016x
D. Lont, D. Ranasinghe, Helen Roberts
We examine the association between CEO cash and equity compensation and non-GAAP disclosure practices in a responsive regulatory and opaque compensation reporting environment. Our empirical evidence, based on a sample of public companies in New Zealand, shows that CEO cash compensation is associated with the likelihood and frequency of non-GAAP disclosures, whereas equity incentives are not. Our results document evidence of an increase in the frequency of non-GAAP disclosures and a decrease in the provision and quality of reconciliation between non-GAAP measures and closely related GAAP measures around CEO cash compensation. In particular, managers use these disclosures when their GAAP earnings benchmarks are missed. A marginal decrease in opportunistic non-GAAP disclosures following the adoption of the International Financial Reporting Standards (IFRS) indicates little change in reporting behavior following adoption of IFRS. Our findings suggest that managers disclose non-GAAP measures with opportunistic intentions motivated by compensation and points to the need for regulators to set policy about clear reconciliation standards.
{"title":"Non-GAAP Disclosures and CEO Pay Levels","authors":"D. Lont, D. Ranasinghe, Helen Roberts","doi":"10.1142/s109440602050016x","DOIUrl":"https://doi.org/10.1142/s109440602050016x","url":null,"abstract":"We examine the association between CEO cash and equity compensation and non-GAAP disclosure practices in a responsive regulatory and opaque compensation reporting environment. Our empirical evidence, based on a sample of public companies in New Zealand, shows that CEO cash compensation is associated with the likelihood and frequency of non-GAAP disclosures, whereas equity incentives are not. Our results document evidence of an increase in the frequency of non-GAAP disclosures and a decrease in the provision and quality of reconciliation between non-GAAP measures and closely related GAAP measures around CEO cash compensation. In particular, managers use these disclosures when their GAAP earnings benchmarks are missed. A marginal decrease in opportunistic non-GAAP disclosures following the adoption of the International Financial Reporting Standards (IFRS) indicates little change in reporting behavior following adoption of IFRS. Our findings suggest that managers disclose non-GAAP measures with opportunistic intentions motivated by compensation and points to the need for regulators to set policy about clear reconciliation standards.","PeriodicalId":47122,"journal":{"name":"International Journal of Accounting","volume":"1 1","pages":"2050016"},"PeriodicalIF":2.0,"publicationDate":"2020-11-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44085504","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 : 2020-11-05DOI: 10.1142/s1094406020500158
Shawn Xu, Wan-Shin Mo, Jacob Peng
We examine the relation between tax aggressiveness and firm value. Using a tax enforcement change in Taiwan that limits firms’ abilities to pursue aggressive tax strategies, we document that the relation between tax aggressiveness and firm value becomes more negative after the regulatory change. Further analyses reveal that the negative change is more pronounced for firms that are more likely to be targeted by the stricter tax enforcement. In addition, we do not find strong evidence on the impact of corporate governance in moderating the main relation. Our results seem to be consistent with the argument that potential increases in regulatory costs may outweigh the benefit of the stricter tax enforcement in constraining insiders’ income diversion, intensifying the conflict between aggressive tax positions and shareholder wealth in our research setting.
{"title":"How Does Tax Aggressiveness Affect Shareholder Wealth? An Examination Using a Regulatory Transition","authors":"Shawn Xu, Wan-Shin Mo, Jacob Peng","doi":"10.1142/s1094406020500158","DOIUrl":"https://doi.org/10.1142/s1094406020500158","url":null,"abstract":"We examine the relation between tax aggressiveness and firm value. Using a tax enforcement change in Taiwan that limits firms’ abilities to pursue aggressive tax strategies, we document that the relation between tax aggressiveness and firm value becomes more negative after the regulatory change. Further analyses reveal that the negative change is more pronounced for firms that are more likely to be targeted by the stricter tax enforcement. In addition, we do not find strong evidence on the impact of corporate governance in moderating the main relation. Our results seem to be consistent with the argument that potential increases in regulatory costs may outweigh the benefit of the stricter tax enforcement in constraining insiders’ income diversion, intensifying the conflict between aggressive tax positions and shareholder wealth in our research setting.","PeriodicalId":47122,"journal":{"name":"International Journal of Accounting","volume":"1 1","pages":"2050015"},"PeriodicalIF":2.0,"publicationDate":"2020-11-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42276216","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 : 2020-10-31DOI: 10.1142/s1094406020800050
I. Haw
{"title":"Discussion of “Caste Primacy of Auditor Choice and Independence”","authors":"I. Haw","doi":"10.1142/s1094406020800050","DOIUrl":"https://doi.org/10.1142/s1094406020800050","url":null,"abstract":"","PeriodicalId":47122,"journal":{"name":"International Journal of Accounting","volume":"1 1","pages":"2080005"},"PeriodicalIF":2.0,"publicationDate":"2020-10-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46682745","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 : 2020-10-30DOI: 10.1142/s1094406020500171
Ajit Dayanandan, H. Donker, John R. Nofsinger, R. Prasad
We examine the caste affiliation of the auditor selected by the corporate boards of directors of Indian firms. The history of the caste system in India is one of discrimination and inequity. The constitutionally mandated quota system in the public sector has shown improvements, but has not trickled into private sector leadership. We find that nearly 96% of Indian corporate boards are dominated by a single caste. The auditing firms are also dominated by the forward castes. Lastly, we find that when boards are dominated by one caste, they select an auditing firm that is also affiliated with that same caste. We examine the board and auditor relationship because they both play an important monitoring role in corporate governance. However, auditor effectiveness can be undermined when there is a lack of independence between them and the firm. The existence of a strong shared social network like caste affiliation compromises that independence.
{"title":"Caste Primacy of Auditor Choice and Independence","authors":"Ajit Dayanandan, H. Donker, John R. Nofsinger, R. Prasad","doi":"10.1142/s1094406020500171","DOIUrl":"https://doi.org/10.1142/s1094406020500171","url":null,"abstract":"We examine the caste affiliation of the auditor selected by the corporate boards of directors of Indian firms. The history of the caste system in India is one of discrimination and inequity. The constitutionally mandated quota system in the public sector has shown improvements, but has not trickled into private sector leadership. We find that nearly 96% of Indian corporate boards are dominated by a single caste. The auditing firms are also dominated by the forward castes. Lastly, we find that when boards are dominated by one caste, they select an auditing firm that is also affiliated with that same caste. We examine the board and auditor relationship because they both play an important monitoring role in corporate governance. However, auditor effectiveness can be undermined when there is a lack of independence between them and the firm. The existence of a strong shared social network like caste affiliation compromises that independence.","PeriodicalId":47122,"journal":{"name":"International Journal of Accounting","volume":"1 1","pages":"2050017"},"PeriodicalIF":2.0,"publicationDate":"2020-10-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42849478","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 : 2020-10-17DOI: 10.1142/s1094406020500134
M. Cameran, Domenico Campa
This paper investigates the impact of the voluntary adoption of International Financial Reporting Standards (IFRS) by unlisted firms on both their financial reporting quality and cost of debt. Usin...
本文研究了非上市公司自愿采用《国际财务报告准则》对其财务报告质量和债务成本的影响。Usin。。。
{"title":"Voluntary IFRS Adoption by Unlisted European Firms: Impact on Earnings Quality and Cost of Debt","authors":"M. Cameran, Domenico Campa","doi":"10.1142/s1094406020500134","DOIUrl":"https://doi.org/10.1142/s1094406020500134","url":null,"abstract":"This paper investigates the impact of the voluntary adoption of International Financial Reporting Standards (IFRS) by unlisted firms on both their financial reporting quality and cost of debt. Usin...","PeriodicalId":47122,"journal":{"name":"International Journal of Accounting","volume":" ","pages":""},"PeriodicalIF":2.0,"publicationDate":"2020-10-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1142/s1094406020500134","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45085788","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 : 2020-10-01DOI: 10.1142/S1094406020500122
Max Göttsche, Stephan Küster, Tobias Steindl
Prior studies on the relationship between culture and discretionary disclosure fail to account for concurrent managerial incentives to reveal private information to the capital market. Our study extends the literature by investigating whether these managerial incentives offset the cultural influence on managers’ discretionary disclosure decisions. To this end, we exploit a setting in which managers have the discretion to influence both the quantity and quality of disclosure and can thereby either conceal or reveal private information. For a sample of European firms, we find that despite incentives to reveal private information, managers’ culturally determined preference for secrecy leads them to provide a low quantity as well as a lower quality of disclosure. Our results are robust to several sensitivity checks and demonstrate the relative importance of cultural influence on discretionary disclosure decisions.
{"title":"To Reveal or Not to Reveal? The Influence of Cultural Secrecy on Discretionary Disclosure Decisions","authors":"Max Göttsche, Stephan Küster, Tobias Steindl","doi":"10.1142/S1094406020500122","DOIUrl":"https://doi.org/10.1142/S1094406020500122","url":null,"abstract":"Prior studies on the relationship between culture and discretionary disclosure fail to account for concurrent managerial incentives to reveal private information to the capital market. Our study extends the literature by investigating whether these managerial incentives offset the cultural influence on managers’ discretionary disclosure decisions. To this end, we exploit a setting in which managers have the discretion to influence both the quantity and quality of disclosure and can thereby either conceal or reveal private information. For a sample of European firms, we find that despite incentives to reveal private information, managers’ culturally determined preference for secrecy leads them to provide a low quantity as well as a lower quality of disclosure. Our results are robust to several sensitivity checks and demonstrate the relative importance of cultural influence on discretionary disclosure decisions.","PeriodicalId":47122,"journal":{"name":"International Journal of Accounting","volume":"1 1","pages":"2050012"},"PeriodicalIF":2.0,"publicationDate":"2020-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1142/S1094406020500122","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41327482","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 : 2020-09-23DOI: 10.1142/S1094406020800049
Hannu Ojala, J. Kinnunen, L. Niemi, Pontus Troberg, Jill Collis
Radhakrishnan and Janakiraman (hereafter RJ) provide an insightful and constructive discussion on our paper. In what follows, we briefly comment on some of the main points they take up in their dis...
{"title":"A Reply to the Discussion of “What Turns the Taxman On? Tax Aggressiveness, Financial Statement Audits, and Tax Return Adjustments in Small Private Companies”","authors":"Hannu Ojala, J. Kinnunen, L. Niemi, Pontus Troberg, Jill Collis","doi":"10.1142/S1094406020800049","DOIUrl":"https://doi.org/10.1142/S1094406020800049","url":null,"abstract":"Radhakrishnan and Janakiraman (hereafter RJ) provide an insightful and constructive discussion on our paper. In what follows, we briefly comment on some of the main points they take up in their dis...","PeriodicalId":47122,"journal":{"name":"International Journal of Accounting","volume":"1 1","pages":"2080004"},"PeriodicalIF":2.0,"publicationDate":"2020-09-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47052217","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 : 2020-09-11DOI: 10.1142/s1094406020800037
S. Radhakrishnan, S. Janakiraman
In this discussion of [Ojala, H., Kinnunen, J., Niemi. L, Troberg, P. and Collis, J. (2019). What turns the taxman on? Tax aggressiveness, financial statement audits and tax return adjustments in small private companies. Forthcoming, The International Journal of Accounting], we analytically show that tax evasion can be sustained in equilibrium in a rational expectations setting, and the analytical model to provide interesting future research directions. In addition, we also provide interesting future research directions using the proprietary database by closely examining the authors’ results.
{"title":"Discussion of “What Turns the Taxman On? Tax Aggressiveness, Financial Statement Audits, and Tax Return Adjustments in Small Private Companies”","authors":"S. Radhakrishnan, S. Janakiraman","doi":"10.1142/s1094406020800037","DOIUrl":"https://doi.org/10.1142/s1094406020800037","url":null,"abstract":"In this discussion of [Ojala, H., Kinnunen, J., Niemi. L, Troberg, P. and Collis, J. (2019). What turns the taxman on? Tax aggressiveness, financial statement audits and tax return adjustments in small private companies. Forthcoming, The International Journal of Accounting], we analytically show that tax evasion can be sustained in equilibrium in a rational expectations setting, and the analytical model to provide interesting future research directions. In addition, we also provide interesting future research directions using the proprietary database by closely examining the authors’ results.","PeriodicalId":47122,"journal":{"name":"International Journal of Accounting","volume":"1 1","pages":"2080003"},"PeriodicalIF":2.0,"publicationDate":"2020-09-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1142/s1094406020800037","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47198692","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 : 2020-09-01DOI: 10.1142/S1094406020500146
M. Houqe, Kamran Ahmed, G. Richardson
This study examines the effect of environmental, social, and governance (ESG) performance on firms’ cost of debt (COD). Based on a sample of 18,950 firm-year observations from 41 countries over the period of 2008–2015, we find a significant negative association between aggregate ESG performance and firms’ COD. We also observe a significant negative association between the individual ESG performance factors (E, S, and G) and firms’ COD. In addition, the negative association between aggregate/individual ESG performance and firms’ COD is economically significant, ranging from 16.93% to 21.20% of median COD values. Finally, disclosure of ESG performance, stakeholder orientation, investor protection, control of corruption, and social progress have pronounced effects on the negative association between ESG performance and firms’ COD. Taken together, our results suggest that ESG performance has a significant negative effect on firms’ COD from an international perspective.
{"title":"The Effect of Environmental, Social, and Governance Performance Factors on Firms’ Cost of Debt: International Evidence","authors":"M. Houqe, Kamran Ahmed, G. Richardson","doi":"10.1142/S1094406020500146","DOIUrl":"https://doi.org/10.1142/S1094406020500146","url":null,"abstract":"This study examines the effect of environmental, social, and governance (ESG) performance on firms’ cost of debt (COD). Based on a sample of 18,950 firm-year observations from 41 countries over the period of 2008–2015, we find a significant negative association between aggregate ESG performance and firms’ COD. We also observe a significant negative association between the individual ESG performance factors (E, S, and G) and firms’ COD. In addition, the negative association between aggregate/individual ESG performance and firms’ COD is economically significant, ranging from 16.93% to 21.20% of median COD values. Finally, disclosure of ESG performance, stakeholder orientation, investor protection, control of corruption, and social progress have pronounced effects on the negative association between ESG performance and firms’ COD. Taken together, our results suggest that ESG performance has a significant negative effect on firms’ COD from an international perspective.","PeriodicalId":47122,"journal":{"name":"International Journal of Accounting","volume":" ","pages":""},"PeriodicalIF":2.0,"publicationDate":"2020-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1142/S1094406020500146","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47672044","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 purpose of the work is to examine the ways by which the court and legislature can control critical interest rates on loan bargains and legislation can be used to exercise/impose a significant legal control over the relationship between landlords and residential/occupiers. Methodology: The paper adopts the doctrinal research methodology/ approach of reviewing cases and statutes and international instruments in aiming at a valid conclusion. Emphasis were placed on statutes and case laws as primary sources. Relevance was as well placed on journal, articles, text books, internet materials, among others as secondary materials. Findings : The paper finds that many Nigerians will be exposed to unmitigated hardship and suffering during this era of covid-19 pandemic as a result of lockdown and restrictions imposed by the government in the effort and measures to contain and curb the spread of the coronavirus. Unique contribution to theory, policy and practice: The paper urges the government to adopt as a primary political objective- the use of legislation to ameliorate the plight of Nigerians in the loan bargain sector and in the residential (housing) sector. In this regard, the paper contributes to practice and policy of government by using law as an instrument of social engineering
{"title":"Control of Oppressive Interest Rates and Charges by Banks and the Relationship between Landlords and Tenants - The Urgent Imperative for Statutory Protection","authors":"Con San Ll.D Babalola Afe Ofr, Clement C. Chigbo","doi":"10.47941/JACC.432","DOIUrl":"https://doi.org/10.47941/JACC.432","url":null,"abstract":"Purpose: The purpose of the work is to examine the ways by which the court and legislature can control critical interest rates on loan bargains and legislation can be used to exercise/impose a significant legal control over the relationship between landlords and residential/occupiers. Methodology: The paper adopts the doctrinal research methodology/ approach of reviewing cases and statutes and international instruments in aiming at a valid conclusion. Emphasis were placed on statutes and case laws as primary sources. Relevance was as well placed on journal, articles, text books, internet materials, among others as secondary materials. Findings : The paper finds that many Nigerians will be exposed to unmitigated hardship and suffering during this era of covid-19 pandemic as a result of lockdown and restrictions imposed by the government in the effort and measures to contain and curb the spread of the coronavirus. Unique contribution to theory, policy and practice: The paper urges the government to adopt as a primary political objective- the use of legislation to ameliorate the plight of Nigerians in the loan bargain sector and in the residential (housing) sector. In this regard, the paper contributes to practice and policy of government by using law as an instrument of social engineering","PeriodicalId":47122,"journal":{"name":"International Journal of Accounting","volume":"103 1","pages":"15-30"},"PeriodicalIF":2.0,"publicationDate":"2020-08-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73265235","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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