Pub Date : 2022-07-08DOI: 10.1108/ara-12-2021-0235
Murat Ocak, Serdar Ozkan, Gökberk Can
PurposeIn this paper, the authors examine the association between the amount of continuing professional education (CPE) hours per staff and audit quality in terms of discretionary accruals and audit opinion.Design/methodology/approachSeveral methodologies are adopted to test the hypotheses, including the ordinary least square (OLS) and logistic regression (Logistic). The authors also employ instrument variables regression with two least square (IVREG with 2SLS) and instrument variables probit model (IVProbit) to address the possible endogeneity and strengthen the validity of the main estimation results.FindingsThe main results show that there is a positive and significant relationship between CPE hours per staff and audit quality. As the authors grouped CPE into four areas (finance, auditing and accounting, tax, law and regulations and others) the results are more robust for the sub-sample “accounting and audit” and “others”. Moreover, the findings of this study suggest that CPE hours per staff do not affect audit quality significantly for Big4 audit firms compared to non-Big4 firms.Research limitations/implicationsThe sample size of the present study is quite small because the transparency reports of the audit firms in Turkey have been available since 2013 and the authors could not reach some auditor demographics at the individual level and some attributes at the audit firm level. Besides, some alternative audit quality measures, such as audit effort, audit fees are not employed because they are not disclosed.Originality/valueThis study contributes to the audit literature using Turkish audit firms. The authors believe that the setting of Turkey may yield interesting results because of the data it provides.
目的本文从可操纵性应计项目和审计意见两个方面考察了员工人均持续职业教育时数与审计质量之间的关系。设计/方法/方法采用几种方法来检验假设，包括普通最小二乘(OLS)和逻辑回归(logistic)。作者还采用了二最小二乘法的工具变量回归(IVREG with 2SLS)和工具变量probit模型(IVProbit)来解决可能的内禀性并加强主要估计结果的有效性。主要结果表明，员工人均CPE时数与审计质量之间存在显著的正相关关系。由于作者将CPE分为四个领域(财务，审计和会计，税收，法律和法规等)，结果对于子样本“会计和审计”和“其他”更为稳健。此外，本研究的结果表明，与非四大会计师事务所相比，每名员工的CPE时间对四大会计师事务所的审计质量没有显著影响。本研究的样本量相当小，因为土耳其审计公司的透明度报告自2013年以来一直可用，作者无法达到个人层面的一些审计师人口统计数据和审计公司层面的一些属性。此外，一些替代的审计质量度量，如审计工作量、审计费用，由于没有披露而没有被采用。原创性/价值本研究对使用土耳其审计事务所的审计文献有所贡献。作者认为，土耳其的背景可能会产生有趣的结果，因为它提供的数据。
{"title":"Continuing professional education and audit quality: evidence from an emerging market","authors":"Murat Ocak, Serdar Ozkan, Gökberk Can","doi":"10.1108/ara-12-2021-0235","DOIUrl":"https://doi.org/10.1108/ara-12-2021-0235","url":null,"abstract":"PurposeIn this paper, the authors examine the association between the amount of continuing professional education (CPE) hours per staff and audit quality in terms of discretionary accruals and audit opinion.Design/methodology/approachSeveral methodologies are adopted to test the hypotheses, including the ordinary least square (OLS) and logistic regression (Logistic). The authors also employ instrument variables regression with two least square (IVREG with 2SLS) and instrument variables probit model (IVProbit) to address the possible endogeneity and strengthen the validity of the main estimation results.FindingsThe main results show that there is a positive and significant relationship between CPE hours per staff and audit quality. As the authors grouped CPE into four areas (finance, auditing and accounting, tax, law and regulations and others) the results are more robust for the sub-sample “accounting and audit” and “others”. Moreover, the findings of this study suggest that CPE hours per staff do not affect audit quality significantly for Big4 audit firms compared to non-Big4 firms.Research limitations/implicationsThe sample size of the present study is quite small because the transparency reports of the audit firms in Turkey have been available since 2013 and the authors could not reach some auditor demographics at the individual level and some attributes at the audit firm level. Besides, some alternative audit quality measures, such as audit effort, audit fees are not employed because they are not disclosed.Originality/valueThis study contributes to the audit literature using Turkish audit firms. The authors believe that the setting of Turkey may yield interesting results because of the data it provides.","PeriodicalId":8562,"journal":{"name":"Asian Review of Accounting","volume":" ","pages":""},"PeriodicalIF":2.0,"publicationDate":"2022-07-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46148199","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-07-05DOI: 10.1108/ara-02-2022-0033
Yoshiaki Amano
PurposeThis study examines the relation between negative goodwill (NGW) and operating performance after mergers and acquisitions (M&A).Design/methodology/approachThis is a comparative analysis of post-M&A operating performance for 228 transactions involving listed Japanese firms that generated negative or positive goodwill.FindingsFirst, post-M&A operating performance is lower when the transaction generates NGW. Second, the negative relation between NGW and post-M&A performance is stronger when managers have incentives for earnings management and when target firms perform poorly before M&A. Third, changes in the accounting treatment of NGW alter the relative importance of earnings management incentives and target firms' poor pre-M&A performance.Originality/valuePrior studies attribute the negative relation between NGW and post-M&A performance solely to acquiring firms' managers' earnings management incentives. The current study finds that the target firm's poor pre-M&A performance is also associated with the relation between NGW and post-M&A performance.
{"title":"Negative goodwill and postmerger operating performance: evidence from Japan","authors":"Yoshiaki Amano","doi":"10.1108/ara-02-2022-0033","DOIUrl":"https://doi.org/10.1108/ara-02-2022-0033","url":null,"abstract":"PurposeThis study examines the relation between negative goodwill (NGW) and operating performance after mergers and acquisitions (M&A).Design/methodology/approachThis is a comparative analysis of post-M&A operating performance for 228 transactions involving listed Japanese firms that generated negative or positive goodwill.FindingsFirst, post-M&A operating performance is lower when the transaction generates NGW. Second, the negative relation between NGW and post-M&A performance is stronger when managers have incentives for earnings management and when target firms perform poorly before M&A. Third, changes in the accounting treatment of NGW alter the relative importance of earnings management incentives and target firms' poor pre-M&A performance.Originality/valuePrior studies attribute the negative relation between NGW and post-M&A performance solely to acquiring firms' managers' earnings management incentives. The current study finds that the target firm's poor pre-M&A performance is also associated with the relation between NGW and post-M&A performance.","PeriodicalId":8562,"journal":{"name":"Asian Review of Accounting","volume":" ","pages":""},"PeriodicalIF":2.0,"publicationDate":"2022-07-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44351237","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-06-28DOI: 10.1108/ara-11-2021-0203
I. Harymawan, M. Nasih, Nadia Klarita Rahayu, K. A. Kamarudin, Wan Adibah Wan Ismail
PurposeThis study aims to examine the relationship between CEO busyness and financial reporting quality in a country which implements a two-tier board system.Design/methodology/approachThis study includes firms listed on the Indonesian Stock Exchange during the 2010–2018 period. This study employs an ordinary least squares regression, the propensity score matching procedure, and a Heckman two-stage regression in testing the hypothesis.FindingsThis study finds that firms with busy directors have a higher financial reporting quality, and these results are robust to a battery or sensitivity analysis. The additional analyses also find that a busy CEO is negatively associated with the firm's financial reporting quality with decreasing income.Practical implicationsThis paper provides implications for policy-makers in the emerging market on devising policies on CEOs' appointments, especially when involving multiple directorships. Despite the general belief on the detrimental workload effects of busy directors, this study offers evidence supporting the opposite effect.Originality/valueAs many previous studies focused on the effect of director busyness on firm’s performance, this study focusses on the effect of CEO busyness on financial reporting quality. To the best of our knowledge, this study is the first to investigate this issue in an emerging market.
{"title":"Busy CEOs and financial reporting quality: evidence from Indonesia","authors":"I. Harymawan, M. Nasih, Nadia Klarita Rahayu, K. A. Kamarudin, Wan Adibah Wan Ismail","doi":"10.1108/ara-11-2021-0203","DOIUrl":"https://doi.org/10.1108/ara-11-2021-0203","url":null,"abstract":"PurposeThis study aims to examine the relationship between CEO busyness and financial reporting quality in a country which implements a two-tier board system.Design/methodology/approachThis study includes firms listed on the Indonesian Stock Exchange during the 2010–2018 period. This study employs an ordinary least squares regression, the propensity score matching procedure, and a Heckman two-stage regression in testing the hypothesis.FindingsThis study finds that firms with busy directors have a higher financial reporting quality, and these results are robust to a battery or sensitivity analysis. The additional analyses also find that a busy CEO is negatively associated with the firm's financial reporting quality with decreasing income.Practical implicationsThis paper provides implications for policy-makers in the emerging market on devising policies on CEOs' appointments, especially when involving multiple directorships. Despite the general belief on the detrimental workload effects of busy directors, this study offers evidence supporting the opposite effect.Originality/valueAs many previous studies focused on the effect of director busyness on firm’s performance, this study focusses on the effect of CEO busyness on financial reporting quality. To the best of our knowledge, this study is the first to investigate this issue in an emerging market.","PeriodicalId":8562,"journal":{"name":"Asian Review of Accounting","volume":" ","pages":""},"PeriodicalIF":2.0,"publicationDate":"2022-06-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44081831","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-06-27DOI: 10.1108/ara-02-2022-0037
N. Alsharari
PurposeThis paper aims to explain the interaction of external and internal influences in the imposition of results-based budgeting (RBB) in a public sector organization, subsequent to public sector reforms.Design/methodology/approachThe paper uses an explanatory case study of a state-imposed RBB system, drawing evidence from in-depth interviews, document analysis, and direct observation. The paper draws on Alsharari's (2013) contextual framework which synthesizes three approaches to analyzing institutional change: Dillard et al.'s (2004) New Institutional Sociology (NIS) framework for analyzing externalities; Burns and Scapens' (2000) framework inspired by old institutional economics (OIE) for internal processes of change and Hardy (1996) power and politics mobilization model. In addition, Pettigrew's (1987) contextual framework is used for its holistic incorporation of different perspectives and to integrate theoretical perspectives.FindingsThe findings show that Jordan's National Reform Agenda represented a turning towards the New Public Management (NPM) model, following entrenched poor state budget performance. The findings also show that NPM ideas, such as results orientation and performance-based accountability, are invoked in response to common economic and social pressures, such as budget insufficiency and public antipathy to government service provision, as well as the pressures of globalization. Institutional analysis confirms the “path-dependent” and evolutionary nature of accounting change implemented in Jordan's customs agency. The study also concludes, from observation of the organization's work routines and practices, that the implementation of accounting change was not merely a symbolic innovation.Research limitations/implicationsThis study has significant implications for politicians, economists, academics and government leaders as it provides fieldwork evidence about the role of RBB in the economy and public policy. Changes at the political and economic level, particularly with respect to the introduction of the fiscal reforms and customs modernization projects, have resulted in changes to structures and systems at the organizational level, particularly the implementation of RBB. This study is subject to normal limitations. The role of legitimate power in the organizational change process can be subject to further examination, especially in the public sectors of developing countries. A longitudinal study could also affirm the institutional analysis of the present case study.Originality/valueThe study contributes to accounting literature by providing further understanding and a thick explanation of the dynamics of accounting change in the Jordanian public sector. It utilizes a contextual framework for studying accounting change that attempts to overcome the limitations of single-dimension theories, such as NIS and OIE, by integrating levels of analysis. The case study provides insight into how internal dynamics interact with exter
{"title":"Institutionalization of results-based budgeting in the public sector: political and economic pressures","authors":"N. Alsharari","doi":"10.1108/ara-02-2022-0037","DOIUrl":"https://doi.org/10.1108/ara-02-2022-0037","url":null,"abstract":"PurposeThis paper aims to explain the interaction of external and internal influences in the imposition of results-based budgeting (RBB) in a public sector organization, subsequent to public sector reforms.Design/methodology/approachThe paper uses an explanatory case study of a state-imposed RBB system, drawing evidence from in-depth interviews, document analysis, and direct observation. The paper draws on Alsharari's (2013) contextual framework which synthesizes three approaches to analyzing institutional change: Dillard et al.'s (2004) New Institutional Sociology (NIS) framework for analyzing externalities; Burns and Scapens' (2000) framework inspired by old institutional economics (OIE) for internal processes of change and Hardy (1996) power and politics mobilization model. In addition, Pettigrew's (1987) contextual framework is used for its holistic incorporation of different perspectives and to integrate theoretical perspectives.FindingsThe findings show that Jordan's National Reform Agenda represented a turning towards the New Public Management (NPM) model, following entrenched poor state budget performance. The findings also show that NPM ideas, such as results orientation and performance-based accountability, are invoked in response to common economic and social pressures, such as budget insufficiency and public antipathy to government service provision, as well as the pressures of globalization. Institutional analysis confirms the “path-dependent” and evolutionary nature of accounting change implemented in Jordan's customs agency. The study also concludes, from observation of the organization's work routines and practices, that the implementation of accounting change was not merely a symbolic innovation.Research limitations/implicationsThis study has significant implications for politicians, economists, academics and government leaders as it provides fieldwork evidence about the role of RBB in the economy and public policy. Changes at the political and economic level, particularly with respect to the introduction of the fiscal reforms and customs modernization projects, have resulted in changes to structures and systems at the organizational level, particularly the implementation of RBB. This study is subject to normal limitations. The role of legitimate power in the organizational change process can be subject to further examination, especially in the public sectors of developing countries. A longitudinal study could also affirm the institutional analysis of the present case study.Originality/valueThe study contributes to accounting literature by providing further understanding and a thick explanation of the dynamics of accounting change in the Jordanian public sector. It utilizes a contextual framework for studying accounting change that attempts to overcome the limitations of single-dimension theories, such as NIS and OIE, by integrating levels of analysis. The case study provides insight into how internal dynamics interact with exter","PeriodicalId":8562,"journal":{"name":"Asian Review of Accounting","volume":" ","pages":""},"PeriodicalIF":2.0,"publicationDate":"2022-06-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41655026","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-06-17DOI: 10.1108/ara-11-2021-0218
Yoshitaka Shirinashihama
PurposeThis study examines whether management accounting knowledge and limited managerial discretion encourage and/or hinder the use of management accounting.Design/methodology/approachBased on the data obtained from public hospitals in Japan, this study tests whether top managers with more management accounting knowledge use management accounting more. Additionally, the study verifies whether lower managerial discretion leads to the use of less management accounting and conducts hierarchical multiple regression analysis.FindingsThe results show that the higher management accounting knowledge is, the more likely management accounting is to be used. By contrast, the more limited management discretion is, the less likely management accounting is to be used.Originality/valueThe author's management accounting research based on the upper echelon theory has shown that characteristics such as the education and experience of top managers affect the use of management accounting systems. However, the impact of management accounting knowledge and managerial discretion, which is one of the important characteristics of top managers, on management accounting has rarely been studied.
{"title":"Management accounting knowledge, limited managerial discretion and the use of management accounting: evidence from Japanese public hospitals","authors":"Yoshitaka Shirinashihama","doi":"10.1108/ara-11-2021-0218","DOIUrl":"https://doi.org/10.1108/ara-11-2021-0218","url":null,"abstract":"PurposeThis study examines whether management accounting knowledge and limited managerial discretion encourage and/or hinder the use of management accounting.Design/methodology/approachBased on the data obtained from public hospitals in Japan, this study tests whether top managers with more management accounting knowledge use management accounting more. Additionally, the study verifies whether lower managerial discretion leads to the use of less management accounting and conducts hierarchical multiple regression analysis.FindingsThe results show that the higher management accounting knowledge is, the more likely management accounting is to be used. By contrast, the more limited management discretion is, the less likely management accounting is to be used.Originality/valueThe author's management accounting research based on the upper echelon theory has shown that characteristics such as the education and experience of top managers affect the use of management accounting systems. However, the impact of management accounting knowledge and managerial discretion, which is one of the important characteristics of top managers, on management accounting has rarely been studied.","PeriodicalId":8562,"journal":{"name":"Asian Review of Accounting","volume":" ","pages":""},"PeriodicalIF":2.0,"publicationDate":"2022-06-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44366385","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-05-03DOI: 10.1108/ara-06-2021-0107
Jun Guo, Yangxin Yu
PurposeThe purpose of this paper is to study the relationships among the presence of corporate social responsibility (CSR) committee, politicians on CSR committee and CSR disclosure in 10-Ks using data from S&P 500 firms during 2005–2013.Design/methodology/approachThe authors manually check the information of CSR committees as well as committees with CSR/sustainability functions from proxy statements (DEF 14a). CSR disclosure from 10-Ks is obtained by using a Python library named Beautiful Soup 4 to clean the rough data from the raw format files from EDGAR.FindingsThe authors find that superior sustainability governance is associated with more voluntary CSR disclosure in their 10-K reports. More importantly, they find that CSR committee members with working experiences as politicians play an important role to improve CSR disclosure. In the robustness tests, they find that CSR committee and the politicians on CSR committee are also associated with high KLD CSR score ratings.Practical implicationsThe finding in our paper that politicians on CSR committee can enhance CSR efforts may provide practical implications to some companies. Companies may consider inviting people who have political connections and experience to serve on CSR committees.Originality/valueThe authors find the presence of politicians on CSR committee is associated with CSR disclosure and CSR performance. That's new to the CSR governance literature and makes contributions to CSR disclosures and CSR committee expertise and skills.
{"title":"CSR committees, politicians and CSR efforts","authors":"Jun Guo, Yangxin Yu","doi":"10.1108/ara-06-2021-0107","DOIUrl":"https://doi.org/10.1108/ara-06-2021-0107","url":null,"abstract":"PurposeThe purpose of this paper is to study the relationships among the presence of corporate social responsibility (CSR) committee, politicians on CSR committee and CSR disclosure in 10-Ks using data from S&P 500 firms during 2005–2013.Design/methodology/approachThe authors manually check the information of CSR committees as well as committees with CSR/sustainability functions from proxy statements (DEF 14a). CSR disclosure from 10-Ks is obtained by using a Python library named Beautiful Soup 4 to clean the rough data from the raw format files from EDGAR.FindingsThe authors find that superior sustainability governance is associated with more voluntary CSR disclosure in their 10-K reports. More importantly, they find that CSR committee members with working experiences as politicians play an important role to improve CSR disclosure. In the robustness tests, they find that CSR committee and the politicians on CSR committee are also associated with high KLD CSR score ratings.Practical implicationsThe finding in our paper that politicians on CSR committee can enhance CSR efforts may provide practical implications to some companies. Companies may consider inviting people who have political connections and experience to serve on CSR committees.Originality/valueThe authors find the presence of politicians on CSR committee is associated with CSR disclosure and CSR performance. That's new to the CSR governance literature and makes contributions to CSR disclosures and CSR committee expertise and skills.","PeriodicalId":8562,"journal":{"name":"Asian Review of Accounting","volume":" ","pages":""},"PeriodicalIF":2.0,"publicationDate":"2022-05-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45909728","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-03-31DOI: 10.1108/ara-10-2021-0193
R. Serrasqueiro, Jonas Oliveira
PurposeThe study aims to analyse annual reports of the non-financial European firms listed at the EURO STOXX 50 index over the period of 2007 and 2011.Design/methodology/approachThis study intends to address two main issues: to what extent the country-level institutional forces compel (directly) firm's risk reporting (RR) behaviour and in which way these country-level institutional forces moderate the relationship between RR and firm-level characteristics.FindingsMain findings indicate that, during this period, the European listed companies disclosed more risk information on a voluntary basis (such as operational and strategic risks) and with better informative content (more forward-looking and focused on positive news). Consistent with institutional theory, findings confirm that the country-level institutional forces explain variations on RR. Additionally, it also indicates that the relationship between RR and leveraged firms is weaker among countries with stronger institutional forces. These findings have several implications for investors and regulators in Europe basically in helping achieve efficiency in investment decisions and to stimulate further efforts to improve RR regulations.Originality/valueThis study makes two major contributions. First, it extends Elshandidy's et al. (2015) work by using other country-level institutional forces that capture the efficacy of corporate boards, the protection of minority shareholders' interests, country's level of democracy, law enforcement mechanisms and press freedom. Second, it uses firms that are considered as a blue-chip representation of super-sector leaders in the Eurozone (but from different institutional contexts). This research setting can be more insightful in shedding some light towards our understanding on how these leading firms can promote innovative and high quality level of RR and how country-level driving forces influence these variables.
{"title":"Risk reporting: do country-level institutional forces really matter?","authors":"R. Serrasqueiro, Jonas Oliveira","doi":"10.1108/ara-10-2021-0193","DOIUrl":"https://doi.org/10.1108/ara-10-2021-0193","url":null,"abstract":"PurposeThe study aims to analyse annual reports of the non-financial European firms listed at the EURO STOXX 50 index over the period of 2007 and 2011.Design/methodology/approachThis study intends to address two main issues: to what extent the country-level institutional forces compel (directly) firm's risk reporting (RR) behaviour and in which way these country-level institutional forces moderate the relationship between RR and firm-level characteristics.FindingsMain findings indicate that, during this period, the European listed companies disclosed more risk information on a voluntary basis (such as operational and strategic risks) and with better informative content (more forward-looking and focused on positive news). Consistent with institutional theory, findings confirm that the country-level institutional forces explain variations on RR. Additionally, it also indicates that the relationship between RR and leveraged firms is weaker among countries with stronger institutional forces. These findings have several implications for investors and regulators in Europe basically in helping achieve efficiency in investment decisions and to stimulate further efforts to improve RR regulations.Originality/valueThis study makes two major contributions. First, it extends Elshandidy's et al. (2015) work by using other country-level institutional forces that capture the efficacy of corporate boards, the protection of minority shareholders' interests, country's level of democracy, law enforcement mechanisms and press freedom. Second, it uses firms that are considered as a blue-chip representation of super-sector leaders in the Eurozone (but from different institutional contexts). This research setting can be more insightful in shedding some light towards our understanding on how these leading firms can promote innovative and high quality level of RR and how country-level driving forces influence these variables.","PeriodicalId":8562,"journal":{"name":"Asian Review of Accounting","volume":" ","pages":""},"PeriodicalIF":2.0,"publicationDate":"2022-03-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42196135","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-03-14DOI: 10.1108/ara-05-2021-0091
Mani Bansal, Asgar Ali
PurposeThe study presents the zero investment strategies based on the pricing impact of real earnings management (REM) on stock returns after taking into account the direction and endogeneity nature of REM.Design/methodology/approachThe authors use standard portfolio methodology and Fama–Macbeth cross-sectional regression to analyze the data for this study. Both upward and downward form of REM has been examined. Accrual earnings management (AEM) has been controlled while examining the association between REM and stock returns.FindingsThe findings demonstrate that the REM anomaly exists in the Indian equity market and is consistent under different market conditions and investment horizons. It is robust after controlling for cross-sectional effects and AEM. Our subsequent analysis suggests that a decile-based zero investment portfolio strategy based on REM loadings generates an annual excess return of 17.90%. The presented annual excess return is highest among quantile and mean-based investment strategies. Further, the authors find that REM sorted proposed investment strategies outperform the AEM sorted investment strategies in all spheres.Practical implicationsThe findings suggest that investors can form an arbitrage profitable investment strategy by taking a long position in the bottom 10% of negative REM stocks, and a short position in the top 10% of positive REM stocks.Originality/valueThis is the first study that examines the pricing impact of REM on stock returns and provides zero investment strategies by betting against REM.
{"title":"Betting against real earnings management","authors":"Mani Bansal, Asgar Ali","doi":"10.1108/ara-05-2021-0091","DOIUrl":"https://doi.org/10.1108/ara-05-2021-0091","url":null,"abstract":"PurposeThe study presents the zero investment strategies based on the pricing impact of real earnings management (REM) on stock returns after taking into account the direction and endogeneity nature of REM.Design/methodology/approachThe authors use standard portfolio methodology and Fama–Macbeth cross-sectional regression to analyze the data for this study. Both upward and downward form of REM has been examined. Accrual earnings management (AEM) has been controlled while examining the association between REM and stock returns.FindingsThe findings demonstrate that the REM anomaly exists in the Indian equity market and is consistent under different market conditions and investment horizons. It is robust after controlling for cross-sectional effects and AEM. Our subsequent analysis suggests that a decile-based zero investment portfolio strategy based on REM loadings generates an annual excess return of 17.90%. The presented annual excess return is highest among quantile and mean-based investment strategies. Further, the authors find that REM sorted proposed investment strategies outperform the AEM sorted investment strategies in all spheres.Practical implicationsThe findings suggest that investors can form an arbitrage profitable investment strategy by taking a long position in the bottom 10% of negative REM stocks, and a short position in the top 10% of positive REM stocks.Originality/valueThis is the first study that examines the pricing impact of REM on stock returns and provides zero investment strategies by betting against REM.","PeriodicalId":8562,"journal":{"name":"Asian Review of Accounting","volume":" ","pages":""},"PeriodicalIF":2.0,"publicationDate":"2022-03-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45846971","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-03-07DOI: 10.1108/ara-09-2021-0170
Lori Leonard, Li Sun
PurposeThe authors investigate the relation between employee treatment and the likelihood of discontinuing business operations.Design/methodology/approachThe authors use regression analysis to investigate the relation between employee treatment and the likelihood of discontinuing business operations.FindingsThe authors find a significant negative relation between employee treatment and the likelihood of discontinuing business operations, suggesting that firms with better employee treatment are less likely to discontinue operations.Originality/valueThis study contributes to two distinctive steams of research: discontinued operations in accounting literature and employee welfare in human resources management literature.
{"title":"Employee treatment and discontinued operations","authors":"Lori Leonard, Li Sun","doi":"10.1108/ara-09-2021-0170","DOIUrl":"https://doi.org/10.1108/ara-09-2021-0170","url":null,"abstract":"PurposeThe authors investigate the relation between employee treatment and the likelihood of discontinuing business operations.Design/methodology/approachThe authors use regression analysis to investigate the relation between employee treatment and the likelihood of discontinuing business operations.FindingsThe authors find a significant negative relation between employee treatment and the likelihood of discontinuing business operations, suggesting that firms with better employee treatment are less likely to discontinue operations.Originality/valueThis study contributes to two distinctive steams of research: discontinued operations in accounting literature and employee welfare in human resources management literature.","PeriodicalId":8562,"journal":{"name":"Asian Review of Accounting","volume":" ","pages":""},"PeriodicalIF":2.0,"publicationDate":"2022-03-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48320522","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-02-10DOI: 10.1108/ara-03-2021-0051
Graça Maria do Carmo Azevedo, Jonas Oliveira, L. Sousa, Maria Fátima Ribeiro Borges
PurposeThe purpose of this paper to analyze the risk reporting practices and its determinants of commercial banks during the period of the adoption of the Basel II Accord in Portugal.Design/methodology/approachThe paper conducts a content analysis of the risk and risk management sections included in the management reports and the notes of the annual reports of Portuguese commercial banks, for the years 2007, 2010 and 2013.FindingsFindings show that theoretical frameworks underpinned in agency and legitimacy theories continue to provide valid explanations for risk reporting by Portuguese banks. More specifically, findings indicate that agency costs, public visibility and reputation are crucial drivers of risk reporting. Findings also indicate that younger banks with lower risk management skills use risk reporting either as an informational process or as a channel to manage organizational legitimacy.Research limitations/implicationsThe content analysis does not allow readily for in-depth qualitative inquiry. The coding instrument is subject to coder bias. Information about risk can be provided in sources other than annual reports. Additionally, not all banks disclose information on corporate governance-related variables that could also influence risk reporting.Originality/valueThe current research setting has never been studied hitherto. In this sense, this study seems to be of great relevance given the scarcity of literature on the subject in Portugal.
{"title":"The determinants of risk reporting during the period of adoption of Basel II Accord: evidence from the Portuguese commercial banks","authors":"Graça Maria do Carmo Azevedo, Jonas Oliveira, L. Sousa, Maria Fátima Ribeiro Borges","doi":"10.1108/ara-03-2021-0051","DOIUrl":"https://doi.org/10.1108/ara-03-2021-0051","url":null,"abstract":"PurposeThe purpose of this paper to analyze the risk reporting practices and its determinants of commercial banks during the period of the adoption of the Basel II Accord in Portugal.Design/methodology/approachThe paper conducts a content analysis of the risk and risk management sections included in the management reports and the notes of the annual reports of Portuguese commercial banks, for the years 2007, 2010 and 2013.FindingsFindings show that theoretical frameworks underpinned in agency and legitimacy theories continue to provide valid explanations for risk reporting by Portuguese banks. More specifically, findings indicate that agency costs, public visibility and reputation are crucial drivers of risk reporting. Findings also indicate that younger banks with lower risk management skills use risk reporting either as an informational process or as a channel to manage organizational legitimacy.Research limitations/implicationsThe content analysis does not allow readily for in-depth qualitative inquiry. The coding instrument is subject to coder bias. Information about risk can be provided in sources other than annual reports. Additionally, not all banks disclose information on corporate governance-related variables that could also influence risk reporting.Originality/valueThe current research setting has never been studied hitherto. In this sense, this study seems to be of great relevance given the scarcity of literature on the subject in Portugal.","PeriodicalId":8562,"journal":{"name":"Asian Review of Accounting","volume":" ","pages":""},"PeriodicalIF":2.0,"publicationDate":"2022-02-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44181241","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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