Journal of Accounting in Emerging EconomiesTable of Contents for Journal of Accounting in Emerging Economies. List of articles from the current issue, including Just Accepted (EarlyCite)https://www.emerald.com/insight/publication/issn/2042-1168/vol/14/iss/2?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestJournal of Accounting in Emerging EconomiesEmerald Publishing LimitedJournal of Accounting in Emerging EconomiesJournal of Accounting in Emerging Economieshttps://www.emerald.com/insight/proxy/containerImg?link=/resource/publication/journal/19dd1a4af4f2fbf33b1ad8bd52628781/urn:emeraldgroup.com:asset:id:binary:jaee.cover.jpghttps://www.emerald.com/insight/publication/issn/2042-1168/vol/14/iss/2?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestPerformance and CEO duality in Indian public banks: a moderating role of board independencehttps://www.emerald.com/insight/content/doi/10.1108/JAEE-11-2022-0320/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe study aims to estimate the impact of the vigilant board independence (BIND) dimension that potentially neutralises the unfair influence of chief executive officer duality (CEODU) on Indian public banks' performance. The study takes into account the fixed-effects model to investigate the potential moderating effect of BIND in the relationship between CEODU and Indian bank performance. The econometric model is also robust against heteroscedasticity, serial correlation and cross-section dependence issues to ensure that the model is free from such biases. The study also addresses the major issue of endogeneity via vector autoregression and performs the analysis by considering one period lag of the explanatory variables. The findings demonstrate that CEODU does not always lead to a negative outcome on the performance until or unless the board is monitored by the effective presence of outside directors. The regulatory bodies consider the results to strengthen board capital where CEODU can benefit a business entity if vigilance BIND is present at or above a threshold point. The study evaluated an under-researched role of BIND as a moderator that undermines the negative influence of CEODU on the performance of Indian banks. The study also establishes that the CEO's contribution to performance increases when the number of outside directors is at or above a certain threshold.Performance and CEO duality in Indian public banks: a moderating role of board independence
Rohit Kumar Singh, Supran Kumar Sharma
Journal of Accounting in Emerging Economies, Vol. 14, No. 2, pp.253-272

The study aims to estimate the impact of the vigilant board independence (BIND) dimension that potentially neutralises the unfair influence of chief executive officer duality (CEODU) on Indian public banks' performance.

The study takes into account the fixed-effects model to investigate the potential moderating effect of BIND in the relationship between CEODU and Indian bank performance. The econometric model is also robust against heteroscedasticity, serial correlation and cross-section dependence issues to ensure that the model is free from such biases. The study also addresses the major issue of endogeneity via vector autoregression and performs the analysis by considering one period lag of the explanatory variables.

The findings demonstrate that CEODU does not always lead to a negative outcome on the performance until or unless the board is monitored by the effective presence of outside directors.

The regulatory bodies consider the results to strengthen board capital where CEODU can benefit a business entity if vigilance BIND is present at or above a threshold point.

The study evaluated an under-researched role of BIND as a moderator that undermines the negative influence of CEODU on the performance of Indian banks. The study also establishes that the CEO's contribution to performance increases when the number of outside directors is at or above a certain threshold.

]]>
Performance and CEO duality in Indian public banks: a moderating role of board independence10.1108/JAEE-11-2022-0320Journal of Accounting in Emerging Economies2023-03-29© 2023 Emerald Publishing LimitedRohit Kumar SinghSupran Kumar SharmaJournal of Accounting in Emerging Economies1422023-03-2910.1108/JAEE-11-2022-0320https://www.emerald.com/insight/content/doi/10.1108/JAEE-11-2022-0320/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The influence of the socioeconomic and politico-administrative environment on the extent of compliance with IPSAS in developing countrieshttps://www.emerald.com/insight/content/doi/10.1108/JAEE-02-2022-0044/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper investigates to what extent public sector entities (PSEs) in developing countries (DCs) are compliant with IPSAS and examines the impact of the socioeconomic and politico-administrative environment on this compliance during the period 2015–2018. This research develops a self-constructed checklist consisting of 116 disclosure items from five accrual-based IPSAS (IPSASs, 1, 2, 3, 14 and 24) and applies panel regressions for a sample of 500 entity-year observations of 125 PSEs. The study results show a high level of disparity in the degree of compliance with IPSAS amongst DCs' governments, with an overall average level of 61%. They reveal that compliance with IPSAS is positively influenced by the level of citizen wealth, government political culture (degree of government openness) and the quality of public administration, whereas jurisdiction size, government financial condition and political competition are non-significant factors. This research provides researchers and practitioners with a comprehensive framework for understanding the extent of New Public Management reforms in DCs with a focus on International Public Sector Accounting Standards implementation. It might assist policymakers in their accounting strategies and might be a signal for DCs with low compliance to tap lessons from governments with successful experience of IPSAS adoption. Focusing on DCs' context, this paper brings new insights into the analysis of socioeconomic and politico-administrative incentives for government compliance with IPSAS. It is the first to investigate the impact of citizen wealth and political competition on IPSAS disclosures.The influence of the socioeconomic and politico-administrative environment on the extent of compliance with IPSAS in developing countries
Yosra Mnif, Yosra Gafsi
Journal of Accounting in Emerging Economies, Vol. 14, No. 2, pp.273-299

This paper investigates to what extent public sector entities (PSEs) in developing countries (DCs) are compliant with IPSAS and examines the impact of the socioeconomic and politico-administrative environment on this compliance during the period 2015–2018.

This research develops a self-constructed checklist consisting of 116 disclosure items from five accrual-based IPSAS (IPSASs, 1, 2, 3, 14 and 24) and applies panel regressions for a sample of 500 entity-year observations of 125 PSEs.

The study results show a high level of disparity in the degree of compliance with IPSAS amongst DCs' governments, with an overall average level of 61%. They reveal that compliance with IPSAS is positively influenced by the level of citizen wealth, government political culture (degree of government openness) and the quality of public administration, whereas jurisdiction size, government financial condition and political competition are non-significant factors.

This research provides researchers and practitioners with a comprehensive framework for understanding the extent of New Public Management reforms in DCs with a focus on International Public Sector Accounting Standards implementation. It might assist policymakers in their accounting strategies and might be a signal for DCs with low compliance to tap lessons from governments with successful experience of IPSAS adoption.

Focusing on DCs' context, this paper brings new insights into the analysis of socioeconomic and politico-administrative incentives for government compliance with IPSAS. It is the first to investigate the impact of citizen wealth and political competition on IPSAS disclosures.

]]>
The influence of the socioeconomic and politico-administrative environment on the extent of compliance with IPSAS in developing countries10.1108/JAEE-02-2022-0044Journal of Accounting in Emerging Economies2023-04-05© 2023 Emerald Publishing LimitedYosra MnifYosra GafsiJournal of Accounting in Emerging Economies1422023-04-0510.1108/JAEE-02-2022-0044https://www.emerald.com/insight/content/doi/10.1108/JAEE-02-2022-0044/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Career progression of women auditors in Tanzania: coping with the masculinity in audit firmshttps://www.emerald.com/insight/content/doi/10.1108/JAEE-02-2021-0062/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper examines the career progression of women auditors working in auditing firms in Tanzania and the strategies employed by women auditors to cope with the masculine nature of audit firms. Data were collected through semi-structured, in-depth interviews with current and former female and male auditors in two auditing firms. A thematic approach to the analysis is adopted. The study reveals that career progression of women auditors studied is constrained by gender-related barriers such as motherhood, pregnancy, maternity leave and limited coaching and networking, as well as household and caring responsibilities. These barriers are facilitated by the patriarchal system, which regards women as wives and mothers rather than professional workers. As a result, women auditors balanced work and family responsibilities by employing various coping strategies including establishing informal network organization, hiring nannies, living with family members, enrolling children to boarding schools and lobbying in the allocation of audit assignments. Despite employing these strategies, very few women reach top positions in audit firms in Tanzania. The findings reveal a need for wider engagement on the role of women and men in society, particularly to address the gender-related barriers faced by women in the accountancy profession. Most previous studies of gender in the accountancy profession have focused on Western contexts. This is one of few to examine the phenomenon in an African context.Career progression of women auditors in Tanzania: coping with the masculinity in audit firms
Siasa Issa Mzenzi
Journal of Accounting in Emerging Economies, Vol. 14, No. 2, pp.300-321

This paper examines the career progression of women auditors working in auditing firms in Tanzania and the strategies employed by women auditors to cope with the masculine nature of audit firms.

Data were collected through semi-structured, in-depth interviews with current and former female and male auditors in two auditing firms. A thematic approach to the analysis is adopted.

The study reveals that career progression of women auditors studied is constrained by gender-related barriers such as motherhood, pregnancy, maternity leave and limited coaching and networking, as well as household and caring responsibilities. These barriers are facilitated by the patriarchal system, which regards women as wives and mothers rather than professional workers. As a result, women auditors balanced work and family responsibilities by employing various coping strategies including establishing informal network organization, hiring nannies, living with family members, enrolling children to boarding schools and lobbying in the allocation of audit assignments. Despite employing these strategies, very few women reach top positions in audit firms in Tanzania.

The findings reveal a need for wider engagement on the role of women and men in society, particularly to address the gender-related barriers faced by women in the accountancy profession.

Most previous studies of gender in the accountancy profession have focused on Western contexts. This is one of few to examine the phenomenon in an African context.

]]>
Career progression of women auditors in Tanzania: coping with the masculinity in audit firms10.1108/JAEE-02-2021-0062Journal of Accounting in Emerging Economies2023-04-04© 2023 Emerald Publishing LimitedSiasa Issa MzenziJournal of Accounting in Emerging Economies1422023-04-0410.1108/JAEE-02-2021-0062https://www.emerald.com/insight/content/doi/10.1108/JAEE-02-2021-0062/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Board diversity in Mauritius: a practice theory perspectivehttps://www.emerald.com/insight/content/doi/10.1108/JAEE-08-2020-0204/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe aim of this study is to explore how a practice approach can provide an understanding of board diversity practices. Drawing from Schatzki's practice theory, this study considered how board diversity is practiced from the doings and sayings of directors in Mauritius. In this study, in-depth interviews with directors in listed companies from different industrial sectors were used to collect data. The authors' findings indicate that a country's board diversity practices are influenced by the country's unique social, economic and cultural environment. Whilst board diversity practices may appear as the practices that are motivated by compliance, a deeper look at the results reveals that the laws governing board diversity are interpreted very subtly in a way that benefits shareholders' self-interest. A low percentage of female directors on boards and some indications of shareholder-driven practices are also found. Whilst the corporate sector acknowledges the advantages of diversity, there are some practices that they are unwilling to abandon, demonstrating the importance of the teleoaffective structures and normativity in determining what really occurs. Members of boards resolving disagreement further demonstrates the teleoaffective structure. This research would be of interest to researchers because of the research's novel approach in studying board diversity which could be used by other researchers to experiment with a practice approach in exploring corporate governance phenomena in unique settings. The findings are of relevance to policymakers and regulators who seek to strengthen corporate governance practices in similar settings. This research contributes to the literature on board diversity by showing that analysing board diversity through a practice approach enables a more comprehensive understanding of practices. The authors' study confirms that practice theory has the potential to re-orient the way board diversity studies are undertaken.Board diversity in Mauritius: a practice theory perspective
Vidisha Gunesh Ramlugun, Lesley Stainbank
Journal of Accounting in Emerging Economies, Vol. 14, No. 2, pp.322-351

The aim of this study is to explore how a practice approach can provide an understanding of board diversity practices. Drawing from Schatzki's practice theory, this study considered how board diversity is practiced from the doings and sayings of directors in Mauritius.

In this study, in-depth interviews with directors in listed companies from different industrial sectors were used to collect data.

The authors' findings indicate that a country's board diversity practices are influenced by the country's unique social, economic and cultural environment. Whilst board diversity practices may appear as the practices that are motivated by compliance, a deeper look at the results reveals that the laws governing board diversity are interpreted very subtly in a way that benefits shareholders' self-interest. A low percentage of female directors on boards and some indications of shareholder-driven practices are also found. Whilst the corporate sector acknowledges the advantages of diversity, there are some practices that they are unwilling to abandon, demonstrating the importance of the teleoaffective structures and normativity in determining what really occurs. Members of boards resolving disagreement further demonstrates the teleoaffective structure.

This research would be of interest to researchers because of the research's novel approach in studying board diversity which could be used by other researchers to experiment with a practice approach in exploring corporate governance phenomena in unique settings.

The findings are of relevance to policymakers and regulators who seek to strengthen corporate governance practices in similar settings.

This research contributes to the literature on board diversity by showing that analysing board diversity through a practice approach enables a more comprehensive understanding of practices. The authors' study confirms that practice theory has the potential to re-orient the way board diversity studies are undertaken.

]]>
Board diversity in Mauritius: a practice theory perspective10.1108/JAEE-08-2020-0204Journal of Accounting in Emerging Economies2023-04-13© 2023 Emerald Publishing LimitedVidisha Gunesh RamlugunLesley StainbankJournal of Accounting in Emerging Economies1422023-04-1310.1108/JAEE-08-2020-0204https://www.emerald.com/insight/content/doi/10.1108/JAEE-08-2020-0204/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Market reactions to timing and information of mandatory disclosureshttps://www.emerald.com/insight/content/doi/10.1108/JAEE-06-2022-0177/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study examines whether investors value the timing and/or information of mandatory disclosures in a unique research setting of listed companies in Thailand. The authors adopt an event-study based approach. Abnormal stock returns are calculated using an OLS market model to measure market reactions to three types of mandatory reports issued by listed Thai firms: financial statements, Form 56-1 and Form 56-2. These reports are released sequentially but contain overlapping information content. Multivariate regression models are employed to examine the market reactions to these regulatory reports and explore the characteristics of firms that affect the market response. The stock market reacts differentially to these reports. The financial statements, which are filed the earliest and are the most concise, prompt the strongest reaction. Investors similarly react significantly to Form 56-1 and Form 56-2, although Form 56-2 provides additional information beyond Form 56-1. The market reactions to small firms are stronger. Collectively, equity investors focus on the timeliness of disclosures rather than the information disclosed in the mandatory reports. The evidence provides support for ongoing regulatory initiatives aimed at improving the timeliness of mandatory disclosures in emerging economies. Prior studies on disclosure regulation investigate either the effect of information content or the timing of mandatory disclosures in isolation. The authors differentiate the effect of information content from disclosure timing and extend the literature by suggesting that investors incrementally value timeliness of disclosures. Investors perceive the benefit of the timely release of quantitative information compared to subsequent narrative disclosures. Between Form 56-1 and Form 56-2, the earlier release of the narrative non-financial information is incrementally traded into share prices.Market reactions to timing and information of mandatory disclosures
Prapaporn Kiattikulwattana, Ra-Pee Pattanapanyasat
Journal of Accounting in Emerging Economies, Vol. 14, No. 2, pp.352-372

This study examines whether investors value the timing and/or information of mandatory disclosures in a unique research setting of listed companies in Thailand.

The authors adopt an event-study based approach. Abnormal stock returns are calculated using an OLS market model to measure market reactions to three types of mandatory reports issued by listed Thai firms: financial statements, Form 56-1 and Form 56-2. These reports are released sequentially but contain overlapping information content. Multivariate regression models are employed to examine the market reactions to these regulatory reports and explore the characteristics of firms that affect the market response.

The stock market reacts differentially to these reports. The financial statements, which are filed the earliest and are the most concise, prompt the strongest reaction. Investors similarly react significantly to Form 56-1 and Form 56-2, although Form 56-2 provides additional information beyond Form 56-1. The market reactions to small firms are stronger. Collectively, equity investors focus on the timeliness of disclosures rather than the information disclosed in the mandatory reports.

The evidence provides support for ongoing regulatory initiatives aimed at improving the timeliness of mandatory disclosures in emerging economies.

Prior studies on disclosure regulation investigate either the effect of information content or the timing of mandatory disclosures in isolation. The authors differentiate the effect of information content from disclosure timing and extend the literature by suggesting that investors incrementally value timeliness of disclosures. Investors perceive the benefit of the timely release of quantitative information compared to subsequent narrative disclosures. Between Form 56-1 and Form 56-2, the earlier release of the narrative non-financial information is incrementally traded into share prices.

]]>
Market reactions to timing and information of mandatory disclosures10.1108/JAEE-06-2022-0177Journal of Accounting in Emerging Economies2023-04-13© 2023 Emerald Publishing LimitedPrapaporn KiattikulwattanaRa-Pee PattanapanyasatJournal of Accounting in Emerging Economies1422023-04-1310.1108/JAEE-06-2022-0177https://www.emerald.com/insight/content/doi/10.1108/JAEE-06-2022-0177/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
SME clients evaluation of audit quality: the roles of auditors' communication effectiveness, rapport and social capitalhttps://www.emerald.com/insight/content/doi/10.1108/JAEE-10-2022-0300/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study examines how professional service firms' communication effectiveness (affiliative communications style, social dialogue and information provision), social cognitive capital and rapport established between an auditor and SME client are instrumental in influencing the latter's evaluation of the technical quality of an audit. The study combines qualitative and quantitative methodologies to create a cross-sectional survey covering four geographic regions in an emerging economy – Thailand. The authors examine the hypotheses by employing social interaction theory. A study of 744 SME executives plus post-survey interviews with three audit partners revealed that an affiliative communications style and information provision are positively associated with the rapport developed between financial auditor and client, and that rapport, in turn, had a strong association with client perceptions of audit quality. In addition, affiliative communication style, information provision and social cognitive capital had a direct (positive) association with perceptions of audit quality. The effects of communication effectiveness and social cognitive capital varied, depending on whether or not the SME client possessed formal accounting qualifications. The study contributes to the literature on the business-to-business professional services, and accounting in particular, by explicating the important roles of communication effectiveness, rapport, and social cognitive capital in the relationship between an auditor and a client. Moreover, the paper reveals that the differences in educational background of clients result in differential impacts of communication effectiveness and social cognitive capital on rapport and perceptions of audit quality.SME clients evaluation of audit quality: the roles of auditors' communication effectiveness, rapport and social capital
Naruanard Sarapaivanich, Erboon Ekasingh, Jomjai Sampet, Paul Patterson
Journal of Accounting in Emerging Economies, Vol. 14, No. 2, pp.373-395

This study examines how professional service firms' communication effectiveness (affiliative communications style, social dialogue and information provision), social cognitive capital and rapport established between an auditor and SME client are instrumental in influencing the latter's evaluation of the technical quality of an audit.

The study combines qualitative and quantitative methodologies to create a cross-sectional survey covering four geographic regions in an emerging economy – Thailand. The authors examine the hypotheses by employing social interaction theory.

A study of 744 SME executives plus post-survey interviews with three audit partners revealed that an affiliative communications style and information provision are positively associated with the rapport developed between financial auditor and client, and that rapport, in turn, had a strong association with client perceptions of audit quality. In addition, affiliative communication style, information provision and social cognitive capital had a direct (positive) association with perceptions of audit quality. The effects of communication effectiveness and social cognitive capital varied, depending on whether or not the SME client possessed formal accounting qualifications.

The study contributes to the literature on the business-to-business professional services, and accounting in particular, by explicating the important roles of communication effectiveness, rapport, and social cognitive capital in the relationship between an auditor and a client. Moreover, the paper reveals that the differences in educational background of clients result in differential impacts of communication effectiveness and social cognitive capital on rapport and perceptions of audit quality.

]]>
SME clients evaluation of audit quality: the roles of auditors' communication effectiveness, rapport and social capital10.1108/JAEE-10-2022-0300Journal of Accounting in Emerging Economies2023-05-11© 2023 Emerald Publishing LimitedNaruanard SarapaivanichErboon EkasinghJomjai SampetPaul PattersonJournal of Accounting in Emerging Economies1422023-05-1110.1108/JAEE-10-2022-0300https://www.emerald.com/insight/content/doi/10.1108/JAEE-10-2022-0300/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The effect of political connections and governance on credit ratings: substitution versus complementary view: case of Tunisian firmhttps://www.emerald.com/insight/content/doi/10.1108/JAEE-10-2022-0286/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe objective of this paper is to study the impact of political connection and governance on credit rating and whether there is a substitution or complementary relationship between them. In order to achieve the objective, a succession of eight ordered probit regressions has been carried out. Moderating variables between the political connection and governance characteristics were introduced. The whole population is taken as a sample, i.e., 27 Tunisian companies that are evaluated by FITSH NORTH AFRICA agencies over a period of 10 years (2009–2018). The outcomes are mixed. They show that the political connection does not always influence credit rating; the size and board independence always improves credit rating; the duality between the functions affects credit rating; whereas the majorities’ proportion does not influence credit rating; and a substitution between the political connection and the governance characteristics is validated. Like any other research, our results are factors of our measures and variable choice and depends heavily on the how these variables were conceived. Also, although our number of observations responds to the statistical result generalization requirements, our sample remains relatively narrow with 27 companies only. In practice, the research will allow investors to have a better vision upon the future of their investments based on whether to develop their governance system or promote political networking. It will also prompt lenders to look beyond ratings and consider factors such as political connections to make a rational judgment on their future placements. This study leads us to find various solutions: the establishment of credit agencies that take into consideration all the data of all the operators taken as a whole (bank, leasing company, and factoring). It encourages the reorganization of the Tunisian banking sector through mergers for example. This study is a pioneer in the credit rating field in Tunisia, where the source of debt financing is the most used by all enterprises across all sectors. This study extends the literature of political connection effectiveness, independent directors, board size, in improving corporate performance and credit rating.The effect of political connections and governance on credit ratings: substitution versus complementary view: case of Tunisian firm
Wided Bouaine, Karima Alaya, Chokri Slim
Journal of Accounting in Emerging Economies, Vol. 14, No. 2, pp.396-421

The objective of this paper is to study the impact of political connection and governance on credit rating and whether there is a substitution or complementary relationship between them.

In order to achieve the objective, a succession of eight ordered probit regressions has been carried out. Moderating variables between the political connection and governance characteristics were introduced. The whole population is taken as a sample, i.e., 27 Tunisian companies that are evaluated by FITSH NORTH AFRICA agencies over a period of 10 years (2009–2018).

The outcomes are mixed. They show that the political connection does not always influence credit rating; the size and board independence always improves credit rating; the duality between the functions affects credit rating; whereas the majorities’ proportion does not influence credit rating; and a substitution between the political connection and the governance characteristics is validated.

Like any other research, our results are factors of our measures and variable choice and depends heavily on the how these variables were conceived. Also, although our number of observations responds to the statistical result generalization requirements, our sample remains relatively narrow with 27 companies only.

In practice, the research will allow investors to have a better vision upon the future of their investments based on whether to develop their governance system or promote political networking. It will also prompt lenders to look beyond ratings and consider factors such as political connections to make a rational judgment on their future placements.

This study leads us to find various solutions: the establishment of credit agencies that take into consideration all the data of all the operators taken as a whole (bank, leasing company, and factoring). It encourages the reorganization of the Tunisian banking sector through mergers for example.

This study is a pioneer in the credit rating field in Tunisia, where the source of debt financing is the most used by all enterprises across all sectors. This study extends the literature of political connection effectiveness, independent directors, board size, in improving corporate performance and credit rating.

]]>
The effect of political connections and governance on credit ratings: substitution versus complementary view: case of Tunisian firm10.1108/JAEE-10-2022-0286Journal of Accounting in Emerging Economies2023-05-30© 2023 Emerald Publishing LimitedWided BouaineKarima AlayaChokri SlimJournal of Accounting in Emerging Economies1422023-05-3010.1108/JAEE-10-2022-0286https://www.emerald.com/insight/content/doi/10.1108/JAEE-10-2022-0286/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
SME owners and accountants' perceptions of financial information in small- and medium-sized entities: a Sri Lanka case studyhttps://www.emerald.com/insight/content/doi/10.1108/JAEE-10-2021-0308/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to examine the perceptions of owners and accountants of small- and medium-sized entities (SMEs) on the users and their financial information needs of SME financial reporting. Postal questionnaire surveys with owners and accountants of SMEs were used to identify users and their financial information needs. In total, 1,498 questionnaires were sent to SME owners and accountants. A total of 358 questionnaires were returned, generating 323 useable questionnaires. The management branch of stakeholder theory is used for the study which asserts that company management is expected to meet the expectations of those stakeholders who are more powerful than others. The users of Sri Lanka SME financial information were limited to owners, banks and Department of Inland Revenue. Users and financial information needs of owners varied in relation to the size of the SME. Financial information are useful for making capital investment and planning decisions for owners regardless of the size of the SME. By sharing information with outside parties, disclosures can diminish information asymmetries between the firms and its stakeholders. The top three reasons for which owners use SME financial information are for planning purposes, estimating income tax liabilities, and taking marketing and pricing decisions. Since the study focuses only on the views of owner-managers and accountants of SMEs, the holistic understanding of uses of SME financial information by other user groups cannot be achieved. The results of this study provide international and local standard setters with an indication of future direction for SME financial reporting. This paper extends existing knowledge on users and their financial information needs of SMEs in developing countries. Consequently, the findings of this paper make a valuable contribution to the work of practitioners such as local and international standards-setters and regulators who may be considering developing/revising financial reporting framework for SMEs either worldwide or in developing countries. Although SME financial reporting has attracted enormous attention in the recent accounting literature, academic research into SME financial reporting is scant. This paper extends existing knowledge on users and their financial information needs of SMEs in developing countries. The general purpose financial reporting model and the accounting standard IFRS for SMEs in particular would not be applicable to Sri Lankan SMEs unless it modifies to reflect the financial information needs of users of Sri Lankan SME financial information.SME owners and accountants' perceptions of financial information in small- and medium-sized entities: a Sri Lanka case study
Nisansala Wijekoon, Umesh Sharma, Grant Samkin
Journal of Accounting in Emerging Economies, Vol. 14, No. 2, pp.422-449

This paper aims to examine the perceptions of owners and accountants of small- and medium-sized entities (SMEs) on the users and their financial information needs of SME financial reporting.

Postal questionnaire surveys with owners and accountants of SMEs were used to identify users and their financial information needs. In total, 1,498 questionnaires were sent to SME owners and accountants. A total of 358 questionnaires were returned, generating 323 useable questionnaires. The management branch of stakeholder theory is used for the study which asserts that company management is expected to meet the expectations of those stakeholders who are more powerful than others.

The users of Sri Lanka SME financial information were limited to owners, banks and Department of Inland Revenue. Users and financial information needs of owners varied in relation to the size of the SME. Financial information are useful for making capital investment and planning decisions for owners regardless of the size of the SME. By sharing information with outside parties, disclosures can diminish information asymmetries between the firms and its stakeholders. The top three reasons for which owners use SME financial information are for planning purposes, estimating income tax liabilities, and taking marketing and pricing decisions.

Since the study focuses only on the views of owner-managers and accountants of SMEs, the holistic understanding of uses of SME financial information by other user groups cannot be achieved.

The results of this study provide international and local standard setters with an indication of future direction for SME financial reporting.

This paper extends existing knowledge on users and their financial information needs of SMEs in developing countries. Consequently, the findings of this paper make a valuable contribution to the work of practitioners such as local and international standards-setters and regulators who may be considering developing/revising financial reporting framework for SMEs either worldwide or in developing countries.

Although SME financial reporting has attracted enormous attention in the recent accounting literature, academic research into SME financial reporting is scant. This paper extends existing knowledge on users and their financial information needs of SMEs in developing countries. The general purpose financial reporting model and the accounting standard IFRS for SMEs in particular would not be applicable to Sri Lankan SMEs unless it modifies to reflect the financial information needs of users of Sri Lankan SME financial information.

]]>
SME owners and accountants' perceptions of financial information in small- and medium-sized entities: a Sri Lanka case study10.1108/JAEE-10-2021-0308Journal of Accounting in Emerging Economies2023-05-16© 2023 Emerald Publishing LimitedNisansala WijekoonUmesh SharmaGrant SamkinJournal of Accounting in Emerging Economies1422023-05-1610.1108/JAEE-10-2021-0308https://www.emerald.com/insight/content/doi/10.1108/JAEE-10-2021-0308/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Internal governance mechanisms and information value of banks’ earningshttps://www.emerald.com/insight/content/doi/10.1108/JAEE-09-2020-0247/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study examines the association between internal corporate governance mechanisms (i.e. board of directors and audit committee) and the information value of bank earnings. The authors comparatively assess this association across different bank types, Islamic versus conventional banks. The authors also investigate the mediating effect of Shariah governance. The authors utilize a unique and an international sample of 723 bank-year observations representing 100 listed banks from 16 countries during the period 2007–2015. The authors investigate the characteristics of the board of directors and audit committee (i.e. size and independence) and employ three core analyses for earnings informativeness (i.e. earnings persistence, cash flow predictability and reliability of loan loss provisions). Additional analyses address Shariah supervisory boards’ (SSBs’) size, financial expertise and multiple outside directorships. The authors use the random-effect Generalised Least Squares (GLS) estimation technique and provide several robustness checks and sensitivities. The authors find that, on average, having large and independent boards (and audit committees) increases the informativeness of reported earnings for banks. Conditional on bank type, our results report strong evidence for differential effects across the two alternative banking systems. In Islamic banks, large and independent board of directors (and audit committees) is positively associated with all measures of information value. There is insignificant evidence for conventional banks. However, SSBs show no significant effect on the reported earnings’ informativeness. This is the first study, to the best of our knowledge, that empirically and comparatively assesses the information value of reported earnings in association with effective internal governance while recognizing the institutional characteristics of different bank types. The authors offer new insights to policymakers, investors and other stakeholders located within countries operating on a dual banking system. The results could help regulators to improve their rules/guidance related to double-layer governance and financial reporting quality.Internal governance mechanisms and information value of banks’ earnings
Marwa Elnahass, Muhammad Tahir, Noora Abdul Rahman Ahmed, Aly Salama
Journal of Accounting in Emerging Economies, Vol. 14, No. 2, pp.450-488

This study examines the association between internal corporate governance mechanisms (i.e. board of directors and audit committee) and the information value of bank earnings. The authors comparatively assess this association across different bank types, Islamic versus conventional banks. The authors also investigate the mediating effect of Shariah governance.

The authors utilize a unique and an international sample of 723 bank-year observations representing 100 listed banks from 16 countries during the period 2007–2015. The authors investigate the characteristics of the board of directors and audit committee (i.e. size and independence) and employ three core analyses for earnings informativeness (i.e. earnings persistence, cash flow predictability and reliability of loan loss provisions). Additional analyses address Shariah supervisory boards’ (SSBs’) size, financial expertise and multiple outside directorships. The authors use the random-effect Generalised Least Squares (GLS) estimation technique and provide several robustness checks and sensitivities.

The authors find that, on average, having large and independent boards (and audit committees) increases the informativeness of reported earnings for banks. Conditional on bank type, our results report strong evidence for differential effects across the two alternative banking systems. In Islamic banks, large and independent board of directors (and audit committees) is positively associated with all measures of information value. There is insignificant evidence for conventional banks. However, SSBs show no significant effect on the reported earnings’ informativeness.

This is the first study, to the best of our knowledge, that empirically and comparatively assesses the information value of reported earnings in association with effective internal governance while recognizing the institutional characteristics of different bank types. The authors offer new insights to policymakers, investors and other stakeholders located within countries operating on a dual banking system. The results could help regulators to improve their rules/guidance related to double-layer governance and financial reporting quality.

]]>
Internal governance mechanisms and information value of banks’ earnings10.1108/JAEE-09-2020-0247Journal of Accounting in Emerging Economies2023-05-22© 2023 Emerald Publishing LimitedMarwa ElnahassMuhammad TahirNoora Abdul Rahman AhmedAly SalamaJournal of Accounting in Emerging Economies1422023-05-2210.1108/JAEE-09-2020-0247https://www.emerald.com/insight/content/doi/10.1108/JAEE-09-2020-0247/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The impact of board characteristics on corporate social responsibility disclosures: evidence from state-owned enterprises in Kenyahttps://www.emerald.com/insight/content/doi/10.1108/JAEE-01-2022-0008/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestTo investigate the impact of board characteristics (board gender diversity, board chair age, board subcommittees, board meetings, board skill, board size and board independence) on corporate social responsibility disclosures (CSRD) of state-owned enterprises (SOEs) in Kenya during the period 2015–2018. The study employed fixed-effects balanced panel data to examine the impact of board characteristics on CSRD. The analysis is repeated using two regression estimators (robust least square and random effects) and the four CSRD subcomponents to evaluate the robustness of the main analysis. The results established that board gender diversity, board chair age and board subcommittees had significant negative effects on CSRD. The impact of the remaining board characteristics was found to be insignificant. The study was limited to the disclosures included in the annual reports, which means that information disclosed in other media, like websites, was not considered. The second limitation concerns mediating and moderator variables that were not considered. There is a need for a stricter corporate governance implementation mechanism, as opposed to the “comply or explain” principle, since results suggest that most of the board characteristics do not appear to be impactful. Additionally, the low level of reported CSRD calls for the establishment of Corporate Social Responsibility or related committees. The evidence suggests that SOEs are reluctant to report on issues such as ethics, health and safety initiatives, environment and social investments. The paper extends the literature on the impact of board characteristics on CSRD in unlisted non-commercial SOEs in a developing country context.The impact of board characteristics on corporate social responsibility disclosures: evidence from state-owned enterprises in Kenya
Albert Ochien'g Abang'a, Venancio Tauringana
Journal of Accounting in Emerging Economies, Vol. ahead-of-print, No. ahead-of-print, pp.-

To investigate the impact of board characteristics (board gender diversity, board chair age, board subcommittees, board meetings, board skill, board size and board independence) on corporate social responsibility disclosures (CSRD) of state-owned enterprises (SOEs) in Kenya during the period 2015–2018.

The study employed fixed-effects balanced panel data to examine the impact of board characteristics on CSRD. The analysis is repeated using two regression estimators (robust least square and random effects) and the four CSRD subcomponents to evaluate the robustness of the main analysis.

The results established that board gender diversity, board chair age and board subcommittees had significant negative effects on CSRD. The impact of the remaining board characteristics was found to be insignificant.

The study was limited to the disclosures included in the annual reports, which means that information disclosed in other media, like websites, was not considered. The second limitation concerns mediating and moderator variables that were not considered.

There is a need for a stricter corporate governance implementation mechanism, as opposed to the “comply or explain” principle, since results suggest that most of the board characteristics do not appear to be impactful. Additionally, the low level of reported CSRD calls for the establishment of Corporate Social Responsibility or related committees.

The evidence suggests that SOEs are reluctant to report on issues such as ethics, health and safety initiatives, environment and social investments.

The paper extends the literature on the impact of board characteristics on CSRD in unlisted non-commercial SOEs in a developing country context.

]]>
The impact of board characteristics on corporate social responsibility disclosures: evidence from state-owned enterprises in Kenya10.1108/JAEE-01-2022-0008Journal of Accounting in Emerging Economies2023-08-01© 2023 Emerald Publishing LimitedAlbert Ochien'g Abang'aVenancio TauringanaJournal of Accounting in Emerging Economiesahead-of-printahead-of-print2023-08-0110.1108/JAEE-01-2022-0008https://www.emerald.com/insight/content/doi/10.1108/JAEE-01-2022-0008/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Does leverage influence the impact of pay gaps on performance in listed retail and mining firms? Evidence from South Africahttps://www.emerald.com/insight/content/doi/10.1108/JAEE-02-2023-0040/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestAgency theory motivated this study, posing that leverage mitigates the agency problem. The aim was to examine whether leverage influences the relationship between executive-employee pay gaps (EEPGs) and firm performance. The study was conducted in the mining and retail sectors between 2012 and 2021. Two EEPGs were featured based on their executive fixed pay and variable incentives accumulation. Proxies of firm performance were headline earnings per share; return on assets; earnings before interest, tax, depreciation and amortisation; and return on stock price. Data were collected from 76 JSE-listed firms in the retail and mining sectors and analysed using the two-step generalised method of moments. The results revealed the hybrid implication of the pay gap for firm performance in the retail and mining sectors of South Africa, depending on the performance measures emphasised. More importantly, the study shows that with the moderating effects of leverage, firms can improve their performance while shrinking the pay gap. The results have implications for policy addressing income inequality, debt management, executive compensation and regulatory reforms in South Africa concerning productivity and remuneration decisions. The article provides specific literature for retail and mining industries on pay gaps, shows that it is possible to reduce the pay gap without compromising performance and suggests a new measure of performance that is more attuned to pay gap effect measurement.Does leverage influence the impact of pay gaps on performance in listed retail and mining firms? Evidence from South Africa
Nomanyano Primrose Mnyaka-Rulwa, Joseph Olorunfemi Akande
Journal of Accounting in Emerging Economies, Vol. ahead-of-print, No. ahead-of-print, pp.-

Agency theory motivated this study, posing that leverage mitigates the agency problem. The aim was to examine whether leverage influences the relationship between executive-employee pay gaps (EEPGs) and firm performance. The study was conducted in the mining and retail sectors between 2012 and 2021.

Two EEPGs were featured based on their executive fixed pay and variable incentives accumulation. Proxies of firm performance were headline earnings per share; return on assets; earnings before interest, tax, depreciation and amortisation; and return on stock price. Data were collected from 76 JSE-listed firms in the retail and mining sectors and analysed using the two-step generalised method of moments.

The results revealed the hybrid implication of the pay gap for firm performance in the retail and mining sectors of South Africa, depending on the performance measures emphasised. More importantly, the study shows that with the moderating effects of leverage, firms can improve their performance while shrinking the pay gap.

The results have implications for policy addressing income inequality, debt management, executive compensation and regulatory reforms in South Africa concerning productivity and remuneration decisions.

The article provides specific literature for retail and mining industries on pay gaps, shows that it is possible to reduce the pay gap without compromising performance and suggests a new measure of performance that is more attuned to pay gap effect measurement.

]]>
Does leverage influence the impact of pay gaps on performance in listed retail and mining firms? Evidence from South Africa10.1108/JAEE-02-2023-0040Journal of Accounting in Emerging Economies2024-03-27© 2024 Emerald Publishing LimitedNomanyano Primrose Mnyaka-RulwaJoseph Olorunfemi AkandeJournal of Accounting in Emerging Economiesahead-of-printahead-of-print2024-03-2710.1108/JAEE-02-2023-0040https://www.emerald.com/insight/content/doi/10.1108/JAEE-02-2023-0040/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Emerald Publishing Limited
Women in top executive positions, external audit quality and financial reporting quality: evidence from Vietnamhttps://www.emerald.com/insight/content/doi/10.1108/JAEE-03-2023-0059/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to investigate the effect of the presence of women in top executive positions on financial reporting quality (FRQ) and the role of external audit in enhancing the role of women in top executive positions. This study uses a sample of 644 Vietnamese-listed firms from 2010 to 2020 and applies fixed-effect and dynamic system generalized method of moments techniques for empirical models to test the related hypotheses. First, this study found a U-shaped relationship between women on the board and FRQ as well as women on the audit committee and FRQ. Second, female CEOs are positively associated with FRQ in small firms but there is no evidence of this in large firms. Third, a female chief accountant can enhance FRQ. Finally, external audit quality can reduce the negative effect of women on the board and the audit committee on FRQ and increase the positive impact of female chief accountants on FRQ. The results support all risk-averse, ethical sensitivity and glass ceiling hypotheses in different contexts. This study provides important implications for firms to enhance FRQ by nominating women in a majority of top executive positions and simultaneously using high-quality external audit services. The impact of women in top executive positions on controlling FRQ in different contexts is an original contribution to gender in management literature.Women in top executive positions, external audit quality and financial reporting quality: evidence from Vietnam
Quang Khai Nguyen
Journal of Accounting in Emerging Economies, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to investigate the effect of the presence of women in top executive positions on financial reporting quality (FRQ) and the role of external audit in enhancing the role of women in top executive positions.

This study uses a sample of 644 Vietnamese-listed firms from 2010 to 2020 and applies fixed-effect and dynamic system generalized method of moments techniques for empirical models to test the related hypotheses.

First, this study found a U-shaped relationship between women on the board and FRQ as well as women on the audit committee and FRQ. Second, female CEOs are positively associated with FRQ in small firms but there is no evidence of this in large firms. Third, a female chief accountant can enhance FRQ. Finally, external audit quality can reduce the negative effect of women on the board and the audit committee on FRQ and increase the positive impact of female chief accountants on FRQ.

The results support all risk-averse, ethical sensitivity and glass ceiling hypotheses in different contexts. This study provides important implications for firms to enhance FRQ by nominating women in a majority of top executive positions and simultaneously using high-quality external audit services.

The impact of women in top executive positions on controlling FRQ in different contexts is an original contribution to gender in management literature.

]]>
Women in top executive positions, external audit quality and financial reporting quality: evidence from Vietnam10.1108/JAEE-03-2023-0059Journal of Accounting in Emerging Economies2023-10-27© 2023 Emerald Publishing LimitedQuang Khai NguyenJournal of Accounting in Emerging Economiesahead-of-printahead-of-print2023-10-2710.1108/JAEE-03-2023-0059https://www.emerald.com/insight/content/doi/10.1108/JAEE-03-2023-0059/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
ESG ratings and corporate financial performance in South Africahttps://www.emerald.com/insight/content/doi/10.1108/JAEE-03-2023-0072/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper examines the effect of ESG ratings and its dimensions (environmental, social and governance) on the financial performance of JSE-listed firms included in FTSE/JSE Responsible Investment Index. The paper employs panel data covering 40 JSE-listed firms included in FTSE/JSE Responsible Investment Index between 2015 and 2019. The paper employs the two-stage least squares (2SLS) instrumental variable regression technique to estimate the effect of ESG ratings and its dimensions (environmental, social and governance) on both accounting- and market-based performance indicators. The results of the two-stage least squares instrumental estimation analysis reveal that investment in ESG initiatives improves both accounting- and market-based indicators of financial performance. Of the ESG pillars, the paper finds environmental initiatives improves firms' financial bottom line and market performance, while a firm's social and governance practices are observed to have no effect on a firm's accounting and market performance measures. The insights from this study proffers policy implications for firms' management, investors and regulatory authorities. As far as the authors are concerned, this paper presents the first empirical analysis on the contribution of ESG ratings on financial performance in South Africa.ESG ratings and corporate financial performance in South Africa
Emmerson Chininga, Abdul Latif Alhassan, Bomikazi Zeka
Journal of Accounting in Emerging Economies, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper examines the effect of ESG ratings and its dimensions (environmental, social and governance) on the financial performance of JSE-listed firms included in FTSE/JSE Responsible Investment Index.

The paper employs panel data covering 40 JSE-listed firms included in FTSE/JSE Responsible Investment Index between 2015 and 2019. The paper employs the two-stage least squares (2SLS) instrumental variable regression technique to estimate the effect of ESG ratings and its dimensions (environmental, social and governance) on both accounting- and market-based performance indicators.

The results of the two-stage least squares instrumental estimation analysis reveal that investment in ESG initiatives improves both accounting- and market-based indicators of financial performance. Of the ESG pillars, the paper finds environmental initiatives improves firms' financial bottom line and market performance, while a firm's social and governance practices are observed to have no effect on a firm's accounting and market performance measures.

The insights from this study proffers policy implications for firms' management, investors and regulatory authorities.

As far as the authors are concerned, this paper presents the first empirical analysis on the contribution of ESG ratings on financial performance in South Africa.

]]>
ESG ratings and corporate financial performance in South Africa10.1108/JAEE-03-2023-0072Journal of Accounting in Emerging Economies2023-08-09© 2023 Emmerson Chininga, Abdul Latif Alhassan and Bomikazi ZekaEmmerson ChiningaAbdul Latif AlhassanBomikazi ZekaJournal of Accounting in Emerging Economiesahead-of-printahead-of-print2023-08-0910.1108/JAEE-03-2023-0072https://www.emerald.com/insight/content/doi/10.1108/JAEE-03-2023-0072/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emmerson Chininga, Abdul Latif Alhassan and Bomikazi Zekahttp://creativecommons.org/licences/by/4.0/legalcode
Earnings management using classification shifting of revenues: evidence from Chinese-listed firmshttps://www.emerald.com/insight/content/doi/10.1108/JAEE-04-2022-0118/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to investigate earnings management practice of classification shifting of revenues in Chinese-listed firms. The study employs a dataset of 2,920 A-listed firms from Chinese stock exchanges of Shanghai and Shenzhen for the period of 2003–2019. We apply both univariate and panel regression analysis by using fixed effect estimation with robust standard errors. Our findings reveal that firms misclassify revenues by taking advantage of the flexibility provided by applicable financial reporting standards. The empirical evidence obtained through regression analysis suggest that managers reclassify non-operating revenues as operating revenue to alter the economic reality while seeking the advantage of financial reports users’ vulnerability for valuing the upper half of income statement items more as compared to lower part. The results further indicate that international financial reporting standards adoption inhibits the earnings management practices using classification shifting of revenues. It is also concluded that firms, which are suffering losses or having low growth, are more persistently involved in misclassification of revenues. The study is unique from the point of view that it investigates earnings management from the prospective of revenue’s classification in an emerging market characterized by various market imperfections such as lower investor protection and higher information asymmetry.Earnings management using classification shifting of revenues: evidence from Chinese-listed firms
Ajid ur Rehman, Asad Yaqub, Tanveer Ahsan, Zia-ur-Rehman Rao
Journal of Accounting in Emerging Economies, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to investigate earnings management practice of classification shifting of revenues in Chinese-listed firms.

The study employs a dataset of 2,920 A-listed firms from Chinese stock exchanges of Shanghai and Shenzhen for the period of 2003–2019. We apply both univariate and panel regression analysis by using fixed effect estimation with robust standard errors.

Our findings reveal that firms misclassify revenues by taking advantage of the flexibility provided by applicable financial reporting standards. The empirical evidence obtained through regression analysis suggest that managers reclassify non-operating revenues as operating revenue to alter the economic reality while seeking the advantage of financial reports users’ vulnerability for valuing the upper half of income statement items more as compared to lower part. The results further indicate that international financial reporting standards adoption inhibits the earnings management practices using classification shifting of revenues. It is also concluded that firms, which are suffering losses or having low growth, are more persistently involved in misclassification of revenues.

The study is unique from the point of view that it investigates earnings management from the prospective of revenue’s classification in an emerging market characterized by various market imperfections such as lower investor protection and higher information asymmetry.

]]>
Earnings management using classification shifting of revenues: evidence from Chinese-listed firms10.1108/JAEE-04-2022-0118Journal of Accounting in Emerging Economies2024-02-13© 2024 Emerald Publishing LimitedAjid ur RehmanAsad YaqubTanveer AhsanZia-ur-Rehman RaoJournal of Accounting in Emerging Economiesahead-of-printahead-of-print2024-02-1310.1108/JAEE-04-2022-0118https://www.emerald.com/insight/content/doi/10.1108/JAEE-04-2022-0118/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Emerald Publishing Limited
Board effectiveness and corporate investment in emerging markets: evidence from the gulf cooperation council countrieshttps://www.emerald.com/insight/content/doi/10.1108/JAEE-04-2023-0111/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to empirically examine the impact of internal corporate governance mechanisms (ICGM) related to the size of the board, board composition, CEO duality and audit committee independence as a single metric on a firm’s investment decisions. This study attempts to develop an internal corporate governance quality index comprising 10 items under four main ICGMs – size and independence of the board, CEO duality and audit committee independence – employing panel data analysis to investigate its impact on the investment decisions in 301 nonfinancial firms listed in six emerging capital markets in the Gulf Cooperation Council (GCC) member countries for the years 2015–2020. Data were extracted from sample companies' websites, stock markets, annual reports and Refinitiv database. This study provides convincing evidence that effective ICGMs minimize inefficient investment and ultimately boost investment efficiency. The findings remain consistent even after considering the potential endogeneity bias. This study provides empirical evidence on investment efficiency in the GCC region and emphasizes the importance of high-quality ICGMs in reducing inefficient investment. By examining the impact of ICGMs on investment inefficiencies, this study contributes to the corporate governance literature. The GCC region's unique economic and social contexts, with its growing economies, are considered to shed light on this issue.Board effectiveness and corporate investment in emerging markets: evidence from the gulf cooperation council countries
Adam Yahya Jafeel, Ei Yet Chu, Yousif Abdelbagi Abdalla
Journal of Accounting in Emerging Economies, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to empirically examine the impact of internal corporate governance mechanisms (ICGM) related to the size of the board, board composition, CEO duality and audit committee independence as a single metric on a firm’s investment decisions.

This study attempts to develop an internal corporate governance quality index comprising 10 items under four main ICGMs – size and independence of the board, CEO duality and audit committee independence – employing panel data analysis to investigate its impact on the investment decisions in 301 nonfinancial firms listed in six emerging capital markets in the Gulf Cooperation Council (GCC) member countries for the years 2015–2020. Data were extracted from sample companies' websites, stock markets, annual reports and Refinitiv database.

This study provides convincing evidence that effective ICGMs minimize inefficient investment and ultimately boost investment efficiency. The findings remain consistent even after considering the potential endogeneity bias.

This study provides empirical evidence on investment efficiency in the GCC region and emphasizes the importance of high-quality ICGMs in reducing inefficient investment. By examining the impact of ICGMs on investment inefficiencies, this study contributes to the corporate governance literature. The GCC region's unique economic and social contexts, with its growing economies, are considered to shed light on this issue.

]]>
Board effectiveness and corporate investment in emerging markets: evidence from the gulf cooperation council countries10.1108/JAEE-04-2023-0111Journal of Accounting in Emerging Economies2024-01-24© 2024 Emerald Publishing LimitedAdam Yahya JafeelEi Yet ChuYousif Abdelbagi AbdallaJournal of Accounting in Emerging Economiesahead-of-printahead-of-print2024-01-2410.1108/JAEE-04-2023-0111https://www.emerald.com/insight/content/doi/10.1108/JAEE-04-2023-0111/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Emerald Publishing Limited
Corporate social and environmental reporting in the mining sector: seeking pragmatic and moral forms of legitimacy?https://www.emerald.com/insight/content/doi/10.1108/JAEE-05-2021-0152/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe study examines the social and environmental responsibility indicators disclosed by three International Council on Mining and Metals (ICMM) corporate mining members in their social and environmental reporting (SER) from 2006 to 2014. To achieve this aim, the author limits the data two years before (i.e. from 2006 to 2007) and six years after (i.e. from 2009 to 2014) the implementation of the Sustainable Development Framework in the mining sector in 2008. Using the techniques of content analysis and interpretive textual analysis, this study examines 27 social and environmental responsibility reports published between 2006 and 2014 by three ICMM corporate mining members. The study develops a disclosure index based on the earlier work of Hackston and Milne (1996), together with other disclosure items suggested in the extant literature and considered appropriate for this work. The disclosure index for this study comprised six disclosure categories (“employee”, “environment”, “community involvement”, “energy”, “governance” and “general”). In each of the six disclosure categories, only 10 disclosure items were chosen and that results in 60 disclosure items. A total of 830 out of a maximum of 1,620 social and environmental responsibility indicators, representing 51% (168 employees, 151 environmental, 145 community involvement, 128 energy, 127 governance and 111 general) were identified and examined in company SER. The study showed that the sample companies relied on multiple strategies for managing pragmatic legitimacy and moral legitimacy via disclosures. Such practices raise questions regarding company-specific disclosure policies and their possible links to the quality/quantity of their disclosures. The findings suggest that managers of mining companies may opt for “cherry-picking” and/or capitalise on events for reporting purposes as well as refocus on company-specific issues of priority in their disclosures. While such practices may appear appropriate and/or timely to meet stakeholders’ needs and interests, they may work against the development of comprehensive reports due to the multiple strategies adopted to manage pragmatic and moral legitimacy. A limitation of this research is that the author relied on self-reported corporate disclosures, as opposed to verifying the activities associated with the claims by the sample mining companies. The findings from this research will help future social and environmental accounting researchers to operationalise Suchman’s typology of legitimacy in other contexts. With growing large-scale mining activity, potential social and environmental footprints are obviously far from being socially acceptable. Powerful and legitimacy-conferring stakeholders are likely to disapprove such mining activity and reconsider their support, which may threaten the survival of the mining company and also create a legitimacy threat for the whole mining industry. This study innovates by focusing on Suchman’s (1995) typology of legitimacy framework to interpret SER in an industry characterised by potential social and environmental footprints – the mining industry.Corporate social and environmental reporting in the mining sector: seeking pragmatic and moral forms of legitimacy?
Gideon Jojo Amos
Journal of Accounting in Emerging Economies, Vol. ahead-of-print, No. ahead-of-print, pp.-

The study examines the social and environmental responsibility indicators disclosed by three International Council on Mining and Metals (ICMM) corporate mining members in their social and environmental reporting (SER) from 2006 to 2014. To achieve this aim, the author limits the data two years before (i.e. from 2006 to 2007) and six years after (i.e. from 2009 to 2014) the implementation of the Sustainable Development Framework in the mining sector in 2008.

Using the techniques of content analysis and interpretive textual analysis, this study examines 27 social and environmental responsibility reports published between 2006 and 2014 by three ICMM corporate mining members. The study develops a disclosure index based on the earlier work of Hackston and Milne (1996), together with other disclosure items suggested in the extant literature and considered appropriate for this work. The disclosure index for this study comprised six disclosure categories (“employee”, “environment”, “community involvement”, “energy”, “governance” and “general”). In each of the six disclosure categories, only 10 disclosure items were chosen and that results in 60 disclosure items.

A total of 830 out of a maximum of 1,620 social and environmental responsibility indicators, representing 51% (168 employees, 151 environmental, 145 community involvement, 128 energy, 127 governance and 111 general) were identified and examined in company SER. The study showed that the sample companies relied on multiple strategies for managing pragmatic legitimacy and moral legitimacy via disclosures. Such practices raise questions regarding company-specific disclosure policies and their possible links to the quality/quantity of their disclosures. The findings suggest that managers of mining companies may opt for “cherry-picking” and/or capitalise on events for reporting purposes as well as refocus on company-specific issues of priority in their disclosures. While such practices may appear appropriate and/or timely to meet stakeholders’ needs and interests, they may work against the development of comprehensive reports due to the multiple strategies adopted to manage pragmatic and moral legitimacy.

A limitation of this research is that the author relied on self-reported corporate disclosures, as opposed to verifying the activities associated with the claims by the sample mining companies.

The findings from this research will help future social and environmental accounting researchers to operationalise Suchman’s typology of legitimacy in other contexts.

With growing large-scale mining activity, potential social and environmental footprints are obviously far from being socially acceptable. Powerful and legitimacy-conferring stakeholders are likely to disapprove such mining activity and reconsider their support, which may threaten the survival of the mining company and also create a legitimacy threat for the whole mining industry.

This study innovates by focusing on Suchman’s (1995) typology of legitimacy framework to interpret SER in an industry characterised by potential social and environmental footprints – the mining industry.

]]>
Corporate social and environmental reporting in the mining sector: seeking pragmatic and moral forms of legitimacy?10.1108/JAEE-05-2021-0152Journal of Accounting in Emerging Economies2023-07-12© 2023 Gideon Jojo AmosGideon Jojo AmosJournal of Accounting in Emerging Economiesahead-of-printahead-of-print2023-07-1210.1108/JAEE-05-2021-0152https://www.emerald.com/insight/content/doi/10.1108/JAEE-05-2021-0152/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Gideon Jojo Amoshttp://creativecommons.org/licences/by/4.0/legalcode
Military directors and audit feeshttps://www.emerald.com/insight/content/doi/10.1108/JAEE-06-2022-0158/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study investigates the relationship between companies with military directors and audit fees in Indonesia. Using upper echelon and audit pricing theories, the authors examine military directors' roles in the demand for and supply of auditing services. The authors use Indonesia as their research setting as their military forces have a long history of involvement in business. The study sample includes 898 firm-year observations on the Indonesia Stock Exchange during 2014–2018. The authors find a negative relationship between military connections and audit fees. This is consistent with auditors assessing lower audit risk and charging lower audit fees to companies that have leaders with military experience. The study findings are strongest where there is military experience on the board of directors and where the military experience is from the Army. This study extends the literature on the benefits of military experience in company leadership, especially in the context of auditing research. The study findings also have implications for the selection of board candidates and auditor risk assessments.Military directors and audit fees
Iman Harymawan, Damara Ardelia Kusuma Wardani, John Nowland
Journal of Accounting in Emerging Economies, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study investigates the relationship between companies with military directors and audit fees in Indonesia.

Using upper echelon and audit pricing theories, the authors examine military directors' roles in the demand for and supply of auditing services. The authors use Indonesia as their research setting as their military forces have a long history of involvement in business. The study sample includes 898 firm-year observations on the Indonesia Stock Exchange during 2014–2018.

The authors find a negative relationship between military connections and audit fees. This is consistent with auditors assessing lower audit risk and charging lower audit fees to companies that have leaders with military experience. The study findings are strongest where there is military experience on the board of directors and where the military experience is from the Army.

This study extends the literature on the benefits of military experience in company leadership, especially in the context of auditing research. The study findings also have implications for the selection of board candidates and auditor risk assessments.

]]>
Military directors and audit fees10.1108/JAEE-06-2022-0158Journal of Accounting in Emerging Economies2023-08-01© 2023 Emerald Publishing LimitedIman HarymawanDamara Ardelia Kusuma WardaniJohn NowlandJournal of Accounting in Emerging Economiesahead-of-printahead-of-print2023-08-0110.1108/JAEE-06-2022-0158https://www.emerald.com/insight/content/doi/10.1108/JAEE-06-2022-0158/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
CSR disclosure and state ownership: implications for earnings management and market valuehttps://www.emerald.com/insight/content/doi/10.1108/JAEE-06-2022-0175/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper explores the relationship between earnings management and firms' value through the moderating effect of the missing elements – corporate social responsibility (CSR) disclosure and state ownership in Russian companies. The main argument of the paper is that CSR disclosure can be used as a mitigating mechanism to weaken the negative relationship between earnings manipulation and market value. Additionally test whether state ownership is an important moderating factor in this relationship are conducted as state has always played an important role in the emerging Russian market. The hypotheses are tested on panel data for 223 publicly listed Russian firms for the period 2012–2018. A number of robustness tests are used to check the obtained results for consistency. Following previous research GMM method is employed to address endogeneity concerns. Supported by stakeholder theory, it is observed that firms that disclosed more CSR information experience a weaker negative relationship between earnings management and market value because investors and other stakeholders positively evaluate a positive CSR image. This negative effect of earnings management on market value is even weaker for state-owned companies as market participants appreciate involvement of state-owned companies in CSR activities and place greater expectations on these firms to be responsible without clear understanding whether these actions are “window dressing” for this type of companies or not. The study results provide new insights into the relation between earnings management, firm's value, CSR disclosure and state ownership in emerging-market firms. The paper highlight the importance of considering country-specific factors, such as state ownership, while analysing the market reaction on CSR disclosure and earnings management since the institutional peculiarities may help to explain differences in the obtained results.CSR disclosure and state ownership: implications for earnings management and market value
Tatiana Garanina
Journal of Accounting in Emerging Economies, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper explores the relationship between earnings management and firms' value through the moderating effect of the missing elements – corporate social responsibility (CSR) disclosure and state ownership in Russian companies. The main argument of the paper is that CSR disclosure can be used as a mitigating mechanism to weaken the negative relationship between earnings manipulation and market value. Additionally test whether state ownership is an important moderating factor in this relationship are conducted as state has always played an important role in the emerging Russian market.

The hypotheses are tested on panel data for 223 publicly listed Russian firms for the period 2012–2018. A number of robustness tests are used to check the obtained results for consistency. Following previous research GMM method is employed to address endogeneity concerns.

Supported by stakeholder theory, it is observed that firms that disclosed more CSR information experience a weaker negative relationship between earnings management and market value because investors and other stakeholders positively evaluate a positive CSR image. This negative effect of earnings management on market value is even weaker for state-owned companies as market participants appreciate involvement of state-owned companies in CSR activities and place greater expectations on these firms to be responsible without clear understanding whether these actions are “window dressing” for this type of companies or not.

The study results provide new insights into the relation between earnings management, firm's value, CSR disclosure and state ownership in emerging-market firms. The paper highlight the importance of considering country-specific factors, such as state ownership, while analysing the market reaction on CSR disclosure and earnings management since the institutional peculiarities may help to explain differences in the obtained results.

]]>
CSR disclosure and state ownership: implications for earnings management and market value10.1108/JAEE-06-2022-0175Journal of Accounting in Emerging Economies2023-06-15© 2023 Tatiana GaraninaTatiana GaraninaJournal of Accounting in Emerging Economiesahead-of-printahead-of-print2023-06-1510.1108/JAEE-06-2022-0175https://www.emerald.com/insight/content/doi/10.1108/JAEE-06-2022-0175/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Tatiana Garaninahttp://creativecommons.org/licences/by/4.0/legalcode
Fair value estimates of investment property, corporate governance and audit pricing: evidence from the Hong Kong real estate industryhttps://www.emerald.com/insight/content/doi/10.1108/JAEE-06-2022-0188/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestFollowing the adoption of International Financial Reporting Standards (IFRS), firms are required to recognize gains or losses from investment property revaluation in the income statement, instead of equity in the balance sheet. This results in both a “materiality effect” (as auditors set a higher materiality level and require lower audit efforts) and a “cushion effect” (as revaluation gains serve as a cushion and reduce earnings manipulation incentives). Utilizing this unique setting, this study investigates whether the use of fair value measurement for investment property affects audit pricing before and after IFRS convergence in the Hong Kong real estate industry. Using a sample of 78 real estate companies listed on the Hong Kong Stock Exchange in the pre-IFRS period (2001–2004) and the post-IFRS period (2005–2008), this study employs multivariate regression analyses to test the research hypotheses with respect to the association between investment property revaluation and audit fees and the role of corporate governance structures in the context of family control. The empirical results suggest that audit fees decrease with revaluation gains or losses from investment property revaluation after IFRS convergence, but not before. Furthermore, the negative association is stronger in companies controlled by founders, with proportionally more independent directors on the board and with a smaller board size. This is consistent with the moderating effect of corporate governance. The findings shed more light on the consequences of fair value accounting for non-financial assets and are of interest to regulators for assessing the benefits of the wide use of fair value measurement under IFRS in emerging markets, especially where the corporate ownership structure is typically controlled by founding families. This study also provides recommendations for the audit community to fully consider the impact of asset revaluation on audit procedures and audit pricing.Fair value estimates of investment property, corporate governance and audit pricing: evidence from the Hong Kong real estate industry
Feng Tang
Journal of Accounting in Emerging Economies, Vol. ahead-of-print, No. ahead-of-print, pp.-

Following the adoption of International Financial Reporting Standards (IFRS), firms are required to recognize gains or losses from investment property revaluation in the income statement, instead of equity in the balance sheet. This results in both a “materiality effect” (as auditors set a higher materiality level and require lower audit efforts) and a “cushion effect” (as revaluation gains serve as a cushion and reduce earnings manipulation incentives). Utilizing this unique setting, this study investigates whether the use of fair value measurement for investment property affects audit pricing before and after IFRS convergence in the Hong Kong real estate industry.

Using a sample of 78 real estate companies listed on the Hong Kong Stock Exchange in the pre-IFRS period (2001–2004) and the post-IFRS period (2005–2008), this study employs multivariate regression analyses to test the research hypotheses with respect to the association between investment property revaluation and audit fees and the role of corporate governance structures in the context of family control.

The empirical results suggest that audit fees decrease with revaluation gains or losses from investment property revaluation after IFRS convergence, but not before. Furthermore, the negative association is stronger in companies controlled by founders, with proportionally more independent directors on the board and with a smaller board size. This is consistent with the moderating effect of corporate governance.

The findings shed more light on the consequences of fair value accounting for non-financial assets and are of interest to regulators for assessing the benefits of the wide use of fair value measurement under IFRS in emerging markets, especially where the corporate ownership structure is typically controlled by founding families. This study also provides recommendations for the audit community to fully consider the impact of asset revaluation on audit procedures and audit pricing.

]]>
Fair value estimates of investment property, corporate governance and audit pricing: evidence from the Hong Kong real estate industry10.1108/JAEE-06-2022-0188Journal of Accounting in Emerging Economies2023-09-11© 2023 Emerald Publishing LimitedFeng TangJournal of Accounting in Emerging Economiesahead-of-printahead-of-print2023-09-1110.1108/JAEE-06-2022-0188https://www.emerald.com/insight/content/doi/10.1108/JAEE-06-2022-0188/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
What do we know about real earnings management in the GCC?https://www.emerald.com/insight/content/doi/10.1108/JAEE-06-2023-0180/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe authors empirically investigate the association between acquisition, ownership structure and accrual earnings management (AEM) on real earnings management (REM) using Gulf Cooperation Council (GCC)-listed firms' context. The authors' sample consists of 1,892 firm-year observations for the period from 2007–2017, and the authors adopt a panel data approach in investigating the interrelationships in this study. The authors employ different econometrics approach to test the authors' hypotheses. The findings reveal that acquiring companies engage more in AEM if compared to REM. In terms of ownership structure, institutional ownership and state ownership mitigate the engagement in REM, whereas foreign ownership is found to be an ineffective mechanism in reducing engagement in REM. The authors report similar findings on ownership structure for AEM. The authors also find that the GCC firms engage more in REM when the firms engage in AEM, suggesting a complementary relation between these two earnings management techniques. These findings are robust after controlling for different aspects including any endogeneity issue in the authors' models. The authors' research highlights the importance of understanding REM and AEM dynamics in GCC context. Also, the authors' findings on ownership structure suggest that GCC-listed firms can gain from institutional and state ownership which restricts earnings management, improving firm transparency and subsequently impacting firm performance.What do we know about real earnings management in the GCC?
Mahmoud Alghemary, Basil Al-Najjar, Nereida Polovina
Journal of Accounting in Emerging Economies, Vol. ahead-of-print, No. ahead-of-print, pp.-

The authors empirically investigate the association between acquisition, ownership structure and accrual earnings management (AEM) on real earnings management (REM) using Gulf Cooperation Council (GCC)-listed firms' context.

The authors' sample consists of 1,892 firm-year observations for the period from 2007–2017, and the authors adopt a panel data approach in investigating the interrelationships in this study. The authors employ different econometrics approach to test the authors' hypotheses.

The findings reveal that acquiring companies engage more in AEM if compared to REM. In terms of ownership structure, institutional ownership and state ownership mitigate the engagement in REM, whereas foreign ownership is found to be an ineffective mechanism in reducing engagement in REM. The authors report similar findings on ownership structure for AEM. The authors also find that the GCC firms engage more in REM when the firms engage in AEM, suggesting a complementary relation between these two earnings management techniques. These findings are robust after controlling for different aspects including any endogeneity issue in the authors' models.

The authors' research highlights the importance of understanding REM and AEM dynamics in GCC context. Also, the authors' findings on ownership structure suggest that GCC-listed firms can gain from institutional and state ownership which restricts earnings management, improving firm transparency and subsequently impacting firm performance.

]]>
What do we know about real earnings management in the GCC?10.1108/JAEE-06-2023-0180Journal of Accounting in Emerging Economies2023-08-30© 2023 Emerald Publishing LimitedMahmoud AlghemaryBasil Al-NajjarNereida PolovinaJournal of Accounting in Emerging Economiesahead-of-printahead-of-print2023-08-3010.1108/JAEE-06-2023-0180https://www.emerald.com/insight/content/doi/10.1108/JAEE-06-2023-0180/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Politically connected business and real earnings management: the moderating role of family control and audit qualityhttps://www.emerald.com/insight/content/doi/10.1108/JAEE-07-2023-0199/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study examines whether real earnings management (REM) choices are connected with the ownership structure of politically connected businesses (PCBs). The authors also discuss the moderating role of audit quality (AQ) and family control (FC) on the relationship between PCBs and REM. The authors' study sample comprises firms registered on the Pakistan Stock Exchange (PSE). The sample examines the financial data of the firms that remained listed for the last eight years, i.e. from 2011 to 2018, excluding nonfinance companies and firms with incomplete data. The authors test the hypothesis using feasible generalized least squares (FGLS) regression methods. The authors find that PCBs show a high level of involvement in income-decreasing REM compared to nonPCBs due to lower litigation risk in REM. However, the authors' results also show that two monitoring mechanisms, AQ and FC, curb the opportunistic behavior of PCBs and reduce the intensity of REM in PCBs. The findings of the study are beneficial in decision-making for both internal and external stakeholders, such as creditors, shareholders and competitors. In countries like Pakistan, which fall in the category of emerging economies, PCBs show involvement in income-decreasing REM to change the accurate picture of financial information to attain personal goals, and investors in such countries have a low level of knowledge about earnings management strategies; thus, this study offers detailed knowledge and information to investors and shareholders about political connections and REM. This plays a crucial role for regulators in stiffening the rules and regulations to further assist in more secure financial reporting. This study contributes to the literature by providing a nuanced understanding of the interplay between political connections, REM, FC and AQ in the business context. Second, family-controlled businesses often exhibit distinct characteristics and governance structures compared to nonfamily-controlled firms. Exploring the moderating role of FC in the following relationship could provide valuable insights into how family dynamics influence the financial reporting practices of PCBs. Third, AQ is a critical factor in ensuring financial reporting transparency. However, the interaction between AQ, political connections, and REM remains relatively unexplored. This study explains how audit oversight affects the earnings management behavior of PCBs.Politically connected business and real earnings management: the moderating role of family control and audit quality
Mushahid Hussain Baig, Xu Jin, Rizwan Ali
Journal of Accounting in Emerging Economies, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study examines whether real earnings management (REM) choices are connected with the ownership structure of politically connected businesses (PCBs). The authors also discuss the moderating role of audit quality (AQ) and family control (FC) on the relationship between PCBs and REM.

The authors' study sample comprises firms registered on the Pakistan Stock Exchange (PSE). The sample examines the financial data of the firms that remained listed for the last eight years, i.e. from 2011 to 2018, excluding nonfinance companies and firms with incomplete data. The authors test the hypothesis using feasible generalized least squares (FGLS) regression methods.

The authors find that PCBs show a high level of involvement in income-decreasing REM compared to nonPCBs due to lower litigation risk in REM. However, the authors' results also show that two monitoring mechanisms, AQ and FC, curb the opportunistic behavior of PCBs and reduce the intensity of REM in PCBs.

The findings of the study are beneficial in decision-making for both internal and external stakeholders, such as creditors, shareholders and competitors. In countries like Pakistan, which fall in the category of emerging economies, PCBs show involvement in income-decreasing REM to change the accurate picture of financial information to attain personal goals, and investors in such countries have a low level of knowledge about earnings management strategies; thus, this study offers detailed knowledge and information to investors and shareholders about political connections and REM. This plays a crucial role for regulators in stiffening the rules and regulations to further assist in more secure financial reporting.

This study contributes to the literature by providing a nuanced understanding of the interplay between political connections, REM, FC and AQ in the business context. Second, family-controlled businesses often exhibit distinct characteristics and governance structures compared to nonfamily-controlled firms. Exploring the moderating role of FC in the following relationship could provide valuable insights into how family dynamics influence the financial reporting practices of PCBs. Third, AQ is a critical factor in ensuring financial reporting transparency. However, the interaction between AQ, political connections, and REM remains relatively unexplored. This study explains how audit oversight affects the earnings management behavior of PCBs.

]]>
Politically connected business and real earnings management: the moderating role of family control and audit quality10.1108/JAEE-07-2023-0199Journal of Accounting in Emerging Economies2023-11-07© 2023 Emerald Publishing LimitedMushahid Hussain BaigXu JinRizwan AliJournal of Accounting in Emerging Economiesahead-of-printahead-of-print2023-11-0710.1108/JAEE-07-2023-0199https://www.emerald.com/insight/content/doi/10.1108/JAEE-07-2023-0199/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The effect of board characteristics on tax aggressiveness: the case of listed entities in Sri Lankahttps://www.emerald.com/insight/content/doi/10.1108/JAEE-08-2022-0224/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study examines the effect of board characteristics on the tax aggressiveness of listed companies on the Colombo Stock Exchange in Sri Lanka. The sample consists of 264 firm-year observations of non-financial listed companies in Sri Lanka from 2014 to 2019. The dynamic panel system GMM technique was used to test the hypotheses, and further analyses were performed using the propensity score matching technique. All four effective tax rate measures' mean values were lower than the statutory tax rate, indicating the likelihood of tax planning. Whether board attributes are likely to mitigate tax aggressiveness is uncertain because the results are inconsistent and depend on the ETR measure. Similarly, the logistic regression results derived using the PSM approach are inconsistent, suggesting that board characteristics may have a limited effect on tax aggressiveness. Hence, the corporate governance-tax aggressiveness nexus is limited in the case of Sri Lanka. This investigation is limited to non-financial listed companies in Sri Lanka and incorporates only four tax aggressiveness measures. Findings are imperative for policymakers, regulators, and professional bodies to improve corporate governance codes and rules to enhance organisational transparency toward corporate tax payments. Aggressive tax planning by companies will reduce government tax revenue, hinder social progress, and cause public mistrust of large corporations and institutions. This study provides insight into the nexus between corporate governance and tax aggressiveness in a middle-income economy in South Asia hit by an economic crisis where tax revenue has fallen and tax enforcement is weak.The effect of board characteristics on tax aggressiveness: the case of listed entities in Sri Lanka
Mohamed Mihilar Shamil, Dulni Wanya Gooneratne, Dasitha Gunathilaka, Junaid M. Shaikh
Journal of Accounting in Emerging Economies, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study examines the effect of board characteristics on the tax aggressiveness of listed companies on the Colombo Stock Exchange in Sri Lanka.

The sample consists of 264 firm-year observations of non-financial listed companies in Sri Lanka from 2014 to 2019. The dynamic panel system GMM technique was used to test the hypotheses, and further analyses were performed using the propensity score matching technique.

All four effective tax rate measures' mean values were lower than the statutory tax rate, indicating the likelihood of tax planning. Whether board attributes are likely to mitigate tax aggressiveness is uncertain because the results are inconsistent and depend on the ETR measure. Similarly, the logistic regression results derived using the PSM approach are inconsistent, suggesting that board characteristics may have a limited effect on tax aggressiveness. Hence, the corporate governance-tax aggressiveness nexus is limited in the case of Sri Lanka.

This investigation is limited to non-financial listed companies in Sri Lanka and incorporates only four tax aggressiveness measures. Findings are imperative for policymakers, regulators, and professional bodies to improve corporate governance codes and rules to enhance organisational transparency toward corporate tax payments.

Aggressive tax planning by companies will reduce government tax revenue, hinder social progress, and cause public mistrust of large corporations and institutions.

This study provides insight into the nexus between corporate governance and tax aggressiveness in a middle-income economy in South Asia hit by an economic crisis where tax revenue has fallen and tax enforcement is weak.

]]>
The effect of board characteristics on tax aggressiveness: the case of listed entities in Sri Lanka10.1108/JAEE-08-2022-0224Journal of Accounting in Emerging Economies2023-08-18© 2023 Emerald Publishing LimitedMohamed Mihilar ShamilDulni Wanya GooneratneDasitha GunathilakaJunaid M. ShaikhJournal of Accounting in Emerging Economiesahead-of-printahead-of-print2023-08-1810.1108/JAEE-08-2022-0224https://www.emerald.com/insight/content/doi/10.1108/JAEE-08-2022-0224/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
How do auditor attributes affect bank earnings management? Evidence from Africahttps://www.emerald.com/insight/content/doi/10.1108/JAEE-09-2022-0255/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to examine the impact of the auditor's characteristics on bank's earnings management (EM) through loan loss provisions (LLP) for African banks. This study is based on 360 bank-year observations from 14 African countries for the period 2011–2016, discretionary LLP is used as proxy for EM. Panel regressions have been conducted. The authors' findings reveal that auditor's industry specialization and tenure exert a negative and significant influence on the extent of LLP-based EM. The results also show that total fees paid to the banks' auditors are positively related to the extent of EM. In a further analysis, the authors find that industry specialist auditors are more effective in reducing the incoming-increasing. Similarly, the positive relationship previously found between EM and total fees still holds only for income-increasing. Moreover, auditor tenure negatively impacts both income-increasing and income-decreasing EM. As for auditor change, results reveal differential effect on EM. The current research extends prior literature and provides an understanding of an important external monitoring mechanism, the external audit, within African banks. To the best of the authors' knowledge, there is a paucity of cross-country studies that has addressed the influence of auditors' attributes on banks' EM in Africa.How do auditor attributes affect bank earnings management? Evidence from Africa
Yosra Mnif, Imen Slimi
Journal of Accounting in Emerging Economies, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to examine the impact of the auditor's characteristics on bank's earnings management (EM) through loan loss provisions (LLP) for African banks.

This study is based on 360 bank-year observations from 14 African countries for the period 2011–2016, discretionary LLP is used as proxy for EM. Panel regressions have been conducted.

The authors' findings reveal that auditor's industry specialization and tenure exert a negative and significant influence on the extent of LLP-based EM. The results also show that total fees paid to the banks' auditors are positively related to the extent of EM. In a further analysis, the authors find that industry specialist auditors are more effective in reducing the incoming-increasing. Similarly, the positive relationship previously found between EM and total fees still holds only for income-increasing. Moreover, auditor tenure negatively impacts both income-increasing and income-decreasing EM. As for auditor change, results reveal differential effect on EM.

The current research extends prior literature and provides an understanding of an important external monitoring mechanism, the external audit, within African banks. To the best of the authors' knowledge, there is a paucity of cross-country studies that has addressed the influence of auditors' attributes on banks' EM in Africa.

]]>
How do auditor attributes affect bank earnings management? Evidence from Africa10.1108/JAEE-09-2022-0255Journal of Accounting in Emerging Economies2023-08-22© 2023 Emerald Publishing LimitedYosra MnifImen SlimiJournal of Accounting in Emerging Economiesahead-of-printahead-of-print2023-08-2210.1108/JAEE-09-2022-0255https://www.emerald.com/insight/content/doi/10.1108/JAEE-09-2022-0255/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The implications of the COVID-19 pandemic for employment and government accountability: evidence from an emerging markethttps://www.emerald.com/insight/content/doi/10.1108/JAEE-09-2022-0266/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study analyses the socioeconomic impact of COVID-19 on government accountability regarding the employment of both national and migrant workforces by bringing evidence from an emerging market. In doing so, this study addresses if/how the government discharged its accountability to the public during this recent global health crisis, which started in late 2019, with its effects still being felt today. This study is based on a close reading of the relevant news media (local and international), published research and official reports, as well as ten conversations with business managers to analyse the socioeconomic impact of COVID-19 on government accountability in the Kingdom of Saudi Arabia (KSA). This study draws on insights from public choice theory in trying to understand why some governments take an economic perspective while exercising accountability to their population during the pandemic. It was found that COVID-19 led the government to pursue plans for the localization of the professions and increase employment rates among nationals vs. foreigners or migrant workers. The crisis was exploited by the government to achieve macro socio-political and economic goals, demonstrating its accountability to citizens, rather than foreign workers. This shift shows that difficult and exceptional circumstances can present opportunities for policymakers in emerging markets to achieve national policy and political aims. This study enhances the author’s understanding of accountability during crises (i.e. crises-induced accountability) in emerging markets. The analyses presented enrich the crisis management literature by highlighting the implicit actions of national leaders that affect the lives and well-being of their constituents, especially vulnerable groups.The implications of the COVID-19 pandemic for employment and government accountability: evidence from an emerging market
Ahmed Diab
Journal of Accounting in Emerging Economies, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study analyses the socioeconomic impact of COVID-19 on government accountability regarding the employment of both national and migrant workforces by bringing evidence from an emerging market. In doing so, this study addresses if/how the government discharged its accountability to the public during this recent global health crisis, which started in late 2019, with its effects still being felt today.

This study is based on a close reading of the relevant news media (local and international), published research and official reports, as well as ten conversations with business managers to analyse the socioeconomic impact of COVID-19 on government accountability in the Kingdom of Saudi Arabia (KSA). This study draws on insights from public choice theory in trying to understand why some governments take an economic perspective while exercising accountability to their population during the pandemic.

It was found that COVID-19 led the government to pursue plans for the localization of the professions and increase employment rates among nationals vs. foreigners or migrant workers. The crisis was exploited by the government to achieve macro socio-political and economic goals, demonstrating its accountability to citizens, rather than foreign workers. This shift shows that difficult and exceptional circumstances can present opportunities for policymakers in emerging markets to achieve national policy and political aims.

This study enhances the author’s understanding of accountability during crises (i.e. crises-induced accountability) in emerging markets. The analyses presented enrich the crisis management literature by highlighting the implicit actions of national leaders that affect the lives and well-being of their constituents, especially vulnerable groups.

]]>
The implications of the COVID-19 pandemic for employment and government accountability: evidence from an emerging market10.1108/JAEE-09-2022-0266Journal of Accounting in Emerging Economies2023-09-04© 2023 Emerald Publishing LimitedAhmed DiabJournal of Accounting in Emerging Economiesahead-of-printahead-of-print2023-09-0410.1108/JAEE-09-2022-0266https://www.emerald.com/insight/content/doi/10.1108/JAEE-09-2022-0266/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The readability and narrative tone of risk and risk management disclosures for South African listed companieshttps://www.emerald.com/insight/content/doi/10.1108/JAEE-09-2022-0276/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestRisk information provides information to enable stakeholders to make informed decisions about a company. Corporate communications should be readable and unbiased so as not to hamper disclosure usefulness. This study assesses whether risk disclosures in the integrated reports are readable and unbiased. The readability and narrative tone of South African listed companies' risk and risk management disclosures as disclosed in their integrated reports are analysed using automated software for the Top 40 JSE listed companies from 2015 to 2019. The results show that risk and risk management disclosures are unreadable and lack any improvement in readability during the period. Additionally, these disclosures are biased toward narrative tones signalling communality and certainty. The study adds to the literature on the readability of corporate reports, by focussing on the readability and narrative tone of risk and risk management disclosures during a period of increased scrutiny over the content of such disclosures. Also, by analysing risk disclosure and risk management disclosure separately, and by performing trend analysis to determine whether requirement changes related to content (specifically King IV) affect readability and narrative tones.The readability and narrative tone of risk and risk management disclosures for South African listed companies
Zack Enslin, Elda du Toit, Mangwakong Faith Puane
Journal of Accounting in Emerging Economies, Vol. ahead-of-print, No. ahead-of-print, pp.-

Risk information provides information to enable stakeholders to make informed decisions about a company. Corporate communications should be readable and unbiased so as not to hamper disclosure usefulness. This study assesses whether risk disclosures in the integrated reports are readable and unbiased.

The readability and narrative tone of South African listed companies' risk and risk management disclosures as disclosed in their integrated reports are analysed using automated software for the Top 40 JSE listed companies from 2015 to 2019.

The results show that risk and risk management disclosures are unreadable and lack any improvement in readability during the period. Additionally, these disclosures are biased toward narrative tones signalling communality and certainty.

The study adds to the literature on the readability of corporate reports, by focussing on the readability and narrative tone of risk and risk management disclosures during a period of increased scrutiny over the content of such disclosures. Also, by analysing risk disclosure and risk management disclosure separately, and by performing trend analysis to determine whether requirement changes related to content (specifically King IV) affect readability and narrative tones.

]]>
The readability and narrative tone of risk and risk management disclosures for South African listed companies10.1108/JAEE-09-2022-0276Journal of Accounting in Emerging Economies2023-10-13© 2023 Zack Enslin, Elda du Toit and Mangwakong Faith PuaneZack EnslinElda du ToitMangwakong Faith PuaneJournal of Accounting in Emerging Economiesahead-of-printahead-of-print2023-10-1310.1108/JAEE-09-2022-0276https://www.emerald.com/insight/content/doi/10.1108/JAEE-09-2022-0276/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Zack Enslin, Elda du Toit and Mangwakong Faith Puanehttp://creativecommons.org/licences/by/4.0/legalcode
CEO power, audit committee effectiveness and earnings qualityhttps://www.emerald.com/insight/content/doi/10.1108/JAEE-09-2022-0277/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe purpose of this study is to establish the relationship between chief executive officer (CEO) power, audit committee effectiveness and earnings quality in regulated firms in Uganda. The authors employed cross-sectional and correlational research designs, based on a sample of 136 regulated firms in Uganda. Data were collected using a questionnaire survey from Chief Finance Officers and Chief Audit Executives. Data were analyzed using a Statistical Package for Social Sciences and Partial Least Squares Structural Equation Modeling. Results indicate that CEO power causes negative variances in earnings quality. The results also reveal that audit committee effectiveness positively relates relatively similarly with earnings quality. In addition, CEO power and audit committee effectiveness are negative and significantly related. The results further indicate that CEO power and earnings quality are mediated by audit committee effectiveness. CEO power creates an opaque accounting environment which may leave the stakeholders unable to evaluate the true economic reality of the firm. Audit committee effectiveness is an important enabler for reporting high-quality earnings even in the presence of a powerful CEO. This study contributes toward a methodological stance of using perceptions to understand earnings quality in regulated firms in Uganda. This is probably the first study that has specifically explored earnings quality using only the fundamental qualitative characteristics of accounting information (as proxies) as enshrined in the Conceptual Framework for Financial Reporting 2018 particularly in Uganda since Her adoption of International Financial Reporting Standards in 1998. Second, the indirect effect of audit committee effectiveness and CEO power is tested.CEO power, audit committee effectiveness and earnings quality
Dorcus Kalembe, Twaha Kigongo Kaawaase, Stephen Korutaro Nkundabanyanga, Isaac Newton Kayongo
Journal of Accounting in Emerging Economies, Vol. ahead-of-print, No. ahead-of-print, pp.-

The purpose of this study is to establish the relationship between chief executive officer (CEO) power, audit committee effectiveness and earnings quality in regulated firms in Uganda.

The authors employed cross-sectional and correlational research designs, based on a sample of 136 regulated firms in Uganda. Data were collected using a questionnaire survey from Chief Finance Officers and Chief Audit Executives. Data were analyzed using a Statistical Package for Social Sciences and Partial Least Squares Structural Equation Modeling.

Results indicate that CEO power causes negative variances in earnings quality. The results also reveal that audit committee effectiveness positively relates relatively similarly with earnings quality. In addition, CEO power and audit committee effectiveness are negative and significantly related. The results further indicate that CEO power and earnings quality are mediated by audit committee effectiveness.

CEO power creates an opaque accounting environment which may leave the stakeholders unable to evaluate the true economic reality of the firm. Audit committee effectiveness is an important enabler for reporting high-quality earnings even in the presence of a powerful CEO.

This study contributes toward a methodological stance of using perceptions to understand earnings quality in regulated firms in Uganda. This is probably the first study that has specifically explored earnings quality using only the fundamental qualitative characteristics of accounting information (as proxies) as enshrined in the Conceptual Framework for Financial Reporting 2018 particularly in Uganda since Her adoption of International Financial Reporting Standards in 1998. Second, the indirect effect of audit committee effectiveness and CEO power is tested.

]]>
CEO power, audit committee effectiveness and earnings quality10.1108/JAEE-09-2022-0277Journal of Accounting in Emerging Economies2023-07-14© 2023 Emerald Publishing LimitedDorcus KalembeTwaha Kigongo KaawaaseStephen Korutaro NkundabanyangaIsaac Newton KayongoJournal of Accounting in Emerging Economiesahead-of-printahead-of-print2023-07-1410.1108/JAEE-09-2022-0277https://www.emerald.com/insight/content/doi/10.1108/JAEE-09-2022-0277/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
CSR information, environmental awareness and CSR diffusion in SMEs of Angolahttps://www.emerald.com/insight/content/doi/10.1108/JAEE-10-2022-0280/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestWith the increasing awareness of sustainability and its importance around the world, corporate social responsibility (CSR) in Africa also requires attention. Based on the stakeholder theory, this study aims to determine the relationship between CSR information received by small and medium-sized enterprises (SMEs) and CSR's diffusion and the mediating role of environmental awareness in Angola as a country representative of the African context. The empirical study analyzes managers' perceptions of 131 SMEs in Angola. The partial least squares structural equation modeling (PLS-SEM) is the method to assess the relationship between CSR information and its diffusion and the mediating role of environmental awareness SMEs in Angola. The authors found strong evidence that CSR diffusion, and disclosure as one of CSR's related actions, heavily depends on the information received and managed by the firm. The authors also confirmed that environmental awareness puts pressure on SMEs to increase the SMEs' diffusion efforts. The study points out the role of managers in promoting a responsible orientation of businesses in Angola for preserving the environment and improving the competitive success of SMEs. The social, economic and legal contexts of Angola are vulnerable. The findings raise concerns about whether governments and regulatory efforts improve the development of the strategies toward social responsibility of African firms and whether these firms also increase the role of SMEs in producing positive outcomes through CSR. The results of this study contribute to a better understanding of the features of the strategic orientation of SMEs in Angola, necessary to enhance CSR and protect the environment. The conclusions highlight the potential role of managers in promoting a culture of ethics, social innovation and successful competition change in businesses.CSR information, environmental awareness and CSR diffusion in SMEs of Angola
Inna Choban de Sousa Paiva, M. Isabel Sánchez-Hernández, Luísa Cagica Carvalho
Journal of Accounting in Emerging Economies, Vol. ahead-of-print, No. ahead-of-print, pp.-

With the increasing awareness of sustainability and its importance around the world, corporate social responsibility (CSR) in Africa also requires attention. Based on the stakeholder theory, this study aims to determine the relationship between CSR information received by small and medium-sized enterprises (SMEs) and CSR's diffusion and the mediating role of environmental awareness in Angola as a country representative of the African context.

The empirical study analyzes managers' perceptions of 131 SMEs in Angola. The partial least squares structural equation modeling (PLS-SEM) is the method to assess the relationship between CSR information and its diffusion and the mediating role of environmental awareness SMEs in Angola.

The authors found strong evidence that CSR diffusion, and disclosure as one of CSR's related actions, heavily depends on the information received and managed by the firm. The authors also confirmed that environmental awareness puts pressure on SMEs to increase the SMEs' diffusion efforts.

The study points out the role of managers in promoting a responsible orientation of businesses in Angola for preserving the environment and improving the competitive success of SMEs.

The social, economic and legal contexts of Angola are vulnerable. The findings raise concerns about whether governments and regulatory efforts improve the development of the strategies toward social responsibility of African firms and whether these firms also increase the role of SMEs in producing positive outcomes through CSR.

The results of this study contribute to a better understanding of the features of the strategic orientation of SMEs in Angola, necessary to enhance CSR and protect the environment. The conclusions highlight the potential role of managers in promoting a culture of ethics, social innovation and successful competition change in businesses.

]]>
CSR information, environmental awareness and CSR diffusion in SMEs of Angola10.1108/JAEE-10-2022-0280Journal of Accounting in Emerging Economies2023-06-23© 2023 Inna Choban de Sousa Paiva, M. Isabel Sánchez-Hernández and Luísa Cagica CarvalhoInna Choban de Sousa PaivaM. Isabel Sánchez-HernándezLuísa Cagica CarvalhoJournal of Accounting in Emerging Economiesahead-of-printahead-of-print2023-06-2310.1108/JAEE-10-2022-0280https://www.emerald.com/insight/content/doi/10.1108/JAEE-10-2022-0280/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Inna Choban de Sousa Paiva, M. Isabel Sánchez-Hernández and Luísa Cagica Carvalhohttp://creativecommons.org/licences/by/4.0/legalcode
The impact of corporate governance mechanisms on corporate failure: an empirical evidence from Palestine Exchangehttps://www.emerald.com/insight/content/doi/10.1108/JAEE-10-2022-0283/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe purpose of this research is to examine the impact of governance mechanisms on corporate failure. This study used a hypothesis-testing research design to collect data from the annual reports of 35 companies listed on Palestine Exchange from 2010 to 2019. Descriptive and inferential statistics were employed, along with correlation analysis to evaluate linear relationships between variables. The variance inflation factor was used to test multicollinearity, and binary logistic regression was utilized to develop the research model. There is a significant positive relationship between board of directors' independency, institutional ownership and the quality of external audit, and corporate failure reduction. No significant relationship has been found among corporate governance variables such as board size, board meetings' frequency, board members' remuneration and audit committee existence, and corporate failure reduction. Several empirical research studies have developed models to predict corporate failure using accounting and financial data. However, limited research has empirically investigated the impact of the different mechanisms of governance on corporate failure prediction. The research highlighted the significance of companies' commitment to governance principles and their impact on predicting failure. The study suggests that decision-makers and managers can adopt different governance mechanisms to support corporate success and avoid those that may lead to negative consequences and failure. This research is the first in Palestine to use a comprehensive list of corporate governance mechanisms to predict the failure of companies listed on the Palestine Stock Exchange between 2010 and 2019.The impact of corporate governance mechanisms on corporate failure: an empirical evidence from Palestine Exchange
Abdulnaser Ibrahim Nour, Mohammad Najjar, Saed Al Koni, Abullateef Abudiak, Mahmoud Ibrahim Noor, Rani Shahwan
Journal of Accounting in Emerging Economies, Vol. ahead-of-print, No. ahead-of-print, pp.-

The purpose of this research is to examine the impact of governance mechanisms on corporate failure.

This study used a hypothesis-testing research design to collect data from the annual reports of 35 companies listed on Palestine Exchange from 2010 to 2019. Descriptive and inferential statistics were employed, along with correlation analysis to evaluate linear relationships between variables. The variance inflation factor was used to test multicollinearity, and binary logistic regression was utilized to develop the research model.

There is a significant positive relationship between board of directors' independency, institutional ownership and the quality of external audit, and corporate failure reduction. No significant relationship has been found among corporate governance variables such as board size, board meetings' frequency, board members' remuneration and audit committee existence, and corporate failure reduction.

Several empirical research studies have developed models to predict corporate failure using accounting and financial data. However, limited research has empirically investigated the impact of the different mechanisms of governance on corporate failure prediction.

The research highlighted the significance of companies' commitment to governance principles and their impact on predicting failure. The study suggests that decision-makers and managers can adopt different governance mechanisms to support corporate success and avoid those that may lead to negative consequences and failure.

This research is the first in Palestine to use a comprehensive list of corporate governance mechanisms to predict the failure of companies listed on the Palestine Stock Exchange between 2010 and 2019.

]]>
The impact of corporate governance mechanisms on corporate failure: an empirical evidence from Palestine Exchange10.1108/JAEE-10-2022-0283Journal of Accounting in Emerging Economies2023-08-21© 2023 Emerald Publishing LimitedAbdulnaser Ibrahim NourMohammad NajjarSaed Al KoniAbullateef AbudiakMahmoud Ibrahim NoorRani ShahwanJournal of Accounting in Emerging Economiesahead-of-printahead-of-print2023-08-2110.1108/JAEE-10-2022-0283https://www.emerald.com/insight/content/doi/10.1108/JAEE-10-2022-0283/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Board gender diversity, institutional ownership and earnings management: evidence from East African community listed firmshttps://www.emerald.com/insight/content/doi/10.1108/JAEE-10-2022-0312/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe purpose of this study was to examine the moderating role of institutional ownership on the relationship between board gender diversity and earnings management (EM) among listed firms in East African Community (EAC) partner states. The study used a sample of 71 firms listed in the EAC partner states over 2011–2020. Data were handpicked from the individual firm's audited annual financial reports. Based on the results of the Hausman test, the study used the results of the fixed-effect regression model to test the hypotheses. To test the robustness of the results, the study employed an alternative measure of EM and two additional econometric techniques, including the pooled ordinary least squares (OLS) and the system generalized method of moments (GMM). The empirical findings revealed that female directors improve the board's effectiveness in monitoring managerial roles. Specifically, the results showed a significantly negative relationship between the proportion of women in the corporate board and EM (as measured by discretionary accruals (DAs)). The findings further revealed an inverse relationship between the proportion of institutional ownership and EM. Finally, the results further demonstrated that institutional ownership enhances the role of board gender diversity in mitigating EM among listed firms in the EAC. The findings of this study may be useful to managers, investors and regulators in assessing the role of institutional ownership and women's participation on corporate boards as a strategy for alleviating unethical manipulation of earnings. The findings of this study contribute to the growing concern on gender inequality, especially the marginalization of women from the paid labor force and decision-making. The findings highlight the importance of having more women in the corporate board since this may help in mitigating corporate fraud. Similarly, the findings highlight the importance of institutional ownership as a corporate governance (CG) tool. Previous studies have reported mixed empirical results on whether board gender diversity mitigates EM. To the best of the author's knowledge, this is the first paper to fill the existing gap by exploring whether institutional ownership moderates the relationship between board gender diversity and EM among listed firms in the EAC.Board gender diversity, institutional ownership and earnings management: evidence from East African community listed firms
Peter Nderitu Githaiga
Journal of Accounting in Emerging Economies, Vol. ahead-of-print, No. ahead-of-print, pp.-

The purpose of this study was to examine the moderating role of institutional ownership on the relationship between board gender diversity and earnings management (EM) among listed firms in East African Community (EAC) partner states.

The study used a sample of 71 firms listed in the EAC partner states over 2011–2020. Data were handpicked from the individual firm's audited annual financial reports. Based on the results of the Hausman test, the study used the results of the fixed-effect regression model to test the hypotheses. To test the robustness of the results, the study employed an alternative measure of EM and two additional econometric techniques, including the pooled ordinary least squares (OLS) and the system generalized method of moments (GMM).

The empirical findings revealed that female directors improve the board's effectiveness in monitoring managerial roles. Specifically, the results showed a significantly negative relationship between the proportion of women in the corporate board and EM (as measured by discretionary accruals (DAs)). The findings further revealed an inverse relationship between the proportion of institutional ownership and EM. Finally, the results further demonstrated that institutional ownership enhances the role of board gender diversity in mitigating EM among listed firms in the EAC.

The findings of this study may be useful to managers, investors and regulators in assessing the role of institutional ownership and women's participation on corporate boards as a strategy for alleviating unethical manipulation of earnings.

The findings of this study contribute to the growing concern on gender inequality, especially the marginalization of women from the paid labor force and decision-making. The findings highlight the importance of having more women in the corporate board since this may help in mitigating corporate fraud. Similarly, the findings highlight the importance of institutional ownership as a corporate governance (CG) tool.

Previous studies have reported mixed empirical results on whether board gender diversity mitigates EM. To the best of the author's knowledge, this is the first paper to fill the existing gap by exploring whether institutional ownership moderates the relationship between board gender diversity and EM among listed firms in the EAC.

]]>
Board gender diversity, institutional ownership and earnings management: evidence from East African community listed firms10.1108/JAEE-10-2022-0312Journal of Accounting in Emerging Economies2023-10-19© 2023 Emerald Publishing LimitedPeter Nderitu GithaigaJournal of Accounting in Emerging Economiesahead-of-printahead-of-print2023-10-1910.1108/JAEE-10-2022-0312https://www.emerald.com/insight/content/doi/10.1108/JAEE-10-2022-0312/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Ecological underpinnings of niche identity and diversity within the professionhttps://www.emerald.com/insight/content/doi/10.1108/JAEE-10-2022-0313/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestDiversity and inclusion is a key focus of the profession. This paper investigates the ecological inherited niche of Indonesia and which employers accounting students choose and whether this will result in a diverse and inclusive profession. The authors conceptualise diversity as the demand-from the profession encompassing professional accounting firms, and inclusion as the supply of individuals wishing to enter the profession. The 1377 responses to a questionnaire survey of students deciding on their career paths were analysed using a multinomial logistic regression and path model. The findings show that a lack of diversity in the profession is caused by the ecological background, constructing a local niche, that prevents diversity. This is manifest in ethnicity, gender and education, whereby the local niche consists of Chinese males recruited from B-rated private universities. To bring diversity and inclusivity into the workplace, the profession needs to entice people from multi-faceted groups and match ecological niche underpinnings to expectations of the professional landscape. Non-Chinese females are needed to become role models and trail blazers to establish a diverse profession. The public interest will then be better served. This study uses niche construction as the theoretical framing and demonstrates that the profession needs to take action to become truly diverse and inclusive.Ecological underpinnings of niche identity and diversity within the profession
Ani Wilujeng Suryani, Christine Helliar, Amanda Carter
Journal of Accounting in Emerging Economies, Vol. ahead-of-print, No. ahead-of-print, pp.-

Diversity and inclusion is a key focus of the profession. This paper investigates the ecological inherited niche of Indonesia and which employers accounting students choose and whether this will result in a diverse and inclusive profession. The authors conceptualise diversity as the demand-from the profession encompassing professional accounting firms, and inclusion as the supply of individuals wishing to enter the profession.

The 1377 responses to a questionnaire survey of students deciding on their career paths were analysed using a multinomial logistic regression and path model.

The findings show that a lack of diversity in the profession is caused by the ecological background, constructing a local niche, that prevents diversity. This is manifest in ethnicity, gender and education, whereby the local niche consists of Chinese males recruited from B-rated private universities. To bring diversity and inclusivity into the workplace, the profession needs to entice people from multi-faceted groups and match ecological niche underpinnings to expectations of the professional landscape. Non-Chinese females are needed to become role models and trail blazers to establish a diverse profession. The public interest will then be better served.

This study uses niche construction as the theoretical framing and demonstrates that the profession needs to take action to become truly diverse and inclusive.

]]>
Ecological underpinnings of niche identity and diversity within the profession10.1108/JAEE-10-2022-0313Journal of Accounting in Emerging Economies2023-08-22© 2023 Emerald Publishing LimitedAni Wilujeng SuryaniChristine HelliarAmanda CarterJournal of Accounting in Emerging Economiesahead-of-printahead-of-print2023-08-2210.1108/JAEE-10-2022-0313https://www.emerald.com/insight/content/doi/10.1108/JAEE-10-2022-0313/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Content characteristics of key audit matters reported by auditors in Bangladesh and their implications for audit qualityhttps://www.emerald.com/insight/content/doi/10.1108/JAEE-12-2022-0344/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestIn this study the authors examine the nature and contents of key audit matters (KAMs), and the consequences of KAMs reporting on audit quality in the context of a developing country, Bangladesh. The authors’ proxies of audit qualities are discretionary accruals, small positive earnings surprise, audit report lag, earnings management via below the line items and audit fees. The authors use content analysis of the KAMs for the period 2018–2021 to understand the nature and extent of KAMs reported by auditors in Bangladesh. The authors then use multivariate regression analysis to examine the effect of the number and content characteristics of KAMs on audit quality by using multivariate regression analysis. Auditors in Bangladesh disclose a higher number of KAMs compared to other countries, disclose short descriptions of KAMs and industry generic KAMs. The authors document significant cross-sectional variations in the number and content characteristics of KAMs reported by auditors in Bangladesh. The authors’ pre-post analysis suggest that audit quality has improved after the adoption of KAMs. Cross-sectional analysis suggests that KAMs number and content characteristics are related to audit quality. The authors’ findings imply that the KAMs reporting has the potential to play significant monitoring role in reducing the opportunistic behavior of managers. Hence, KAMs reporting can play a significant role in reducing the agency problem. For regulators, shareholders and corporate managers, the authors’ findings imply that if the audit quality is to be increased, the audit effort should be supported by an appropriate amount of audit fee. The content characteristics of KAMs significantly influence managerial reporting behavior and affect the level of audit efforts. Unlike developed countries (Gutierrez et al., 2018; Lennox et al. 2022), this study supports that KAMs reporting improves audit quality and control opportunistic behavior of managers in developing countries. The authors show that even though the KAMs disclosure quality is poor, it has the potential to improve financial reporting quality.Content characteristics of key audit matters reported by auditors in Bangladesh and their implications for audit quality
Md Khokan Bepari, Shamsun Nahar, Abu Taher Mollik, Mohammad Istiaq Azim
Journal of Accounting in Emerging Economies, Vol. ahead-of-print, No. ahead-of-print, pp.-

In this study the authors examine the nature and contents of key audit matters (KAMs), and the consequences of KAMs reporting on audit quality in the context of a developing country, Bangladesh. The authors’ proxies of audit qualities are discretionary accruals, small positive earnings surprise, audit report lag, earnings management via below the line items and audit fees.

The authors use content analysis of the KAMs for the period 2018–2021 to understand the nature and extent of KAMs reported by auditors in Bangladesh. The authors then use multivariate regression analysis to examine the effect of the number and content characteristics of KAMs on audit quality by using multivariate regression analysis.

Auditors in Bangladesh disclose a higher number of KAMs compared to other countries, disclose short descriptions of KAMs and industry generic KAMs. The authors document significant cross-sectional variations in the number and content characteristics of KAMs reported by auditors in Bangladesh. The authors’ pre-post analysis suggest that audit quality has improved after the adoption of KAMs. Cross-sectional analysis suggests that KAMs number and content characteristics are related to audit quality.

The authors’ findings imply that the KAMs reporting has the potential to play significant monitoring role in reducing the opportunistic behavior of managers. Hence, KAMs reporting can play a significant role in reducing the agency problem. For regulators, shareholders and corporate managers, the authors’ findings imply that if the audit quality is to be increased, the audit effort should be supported by an appropriate amount of audit fee.

The content characteristics of KAMs significantly influence managerial reporting behavior and affect the level of audit efforts.

Unlike developed countries (Gutierrez et al., 2018; Lennox et al. 2022), this study supports that KAMs reporting improves audit quality and control opportunistic behavior of managers in developing countries. The authors show that even though the KAMs disclosure quality is poor, it has the potential to improve financial reporting quality.

]]>
Content characteristics of key audit matters reported by auditors in Bangladesh and their implications for audit quality10.1108/JAEE-12-2022-0344Journal of Accounting in Emerging Economies2023-09-04© 2023 Emerald Publishing LimitedMd Khokan BepariShamsun NaharAbu Taher MollikMohammad Istiaq AzimJournal of Accounting in Emerging Economiesahead-of-printahead-of-print2023-09-0410.1108/JAEE-12-2022-0344https://www.emerald.com/insight/content/doi/10.1108/JAEE-12-2022-0344/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The antecedents of COVID-19 contagion on quality of audit evidence in Egypthttps://www.emerald.com/insight/content/doi/10.1108/JAEE-12-2022-0347/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study assesses the perception of academics and practitioners of ramifications that may have impacted audit evidence quality during COVID-19 in Egypt. A questionnaire was collected and designed regarding the factors affecting the quality of audit evidence during the COVID-19 pandemic using a five-point Likert scale, and detailed descriptive statistics and regression analyses were conducted. The study finds that there is no significant association between social distancing (SD), changing in the economic environment (CEE), time constraint (TC) and stress on audit personnel (SAP) as repercussions of the COVID-19 pandemic with the quality of audit evidence (QAE). The disruption in operational results (DOR), changes in the internal control (CIC) and the stress on client personnel (SCP) significantly affect the quality of audit evidence. Moreover, there is a significant difference between Big and non-Big Four audit firms in terms of changes in economic conditions, internal controls, disruption of operational results and time-constraint variables. The latter has significantly affected the audit evidence quality for both academics and professionals. Due to the implementation of SD and work-from-home policies, audit firms are highly recommended to invest more in digital programs and to be more adaptable to work-from-home, which policy and enhances the effectiveness and flexibility of communication between auditors and their clients. This paper is one of the foremost papers that provides empirical evidence for the antecedents or variables that may affect audit quality evidence due to the COVID-19 pandemic.The antecedents of COVID-19 contagion on quality of audit evidence in Egypt
Marwa Farghaly, Mohamed A.K. Basuony, Neveen Noureldin, Karim Hegazy
Journal of Accounting in Emerging Economies, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study assesses the perception of academics and practitioners of ramifications that may have impacted audit evidence quality during COVID-19 in Egypt.

A questionnaire was collected and designed regarding the factors affecting the quality of audit evidence during the COVID-19 pandemic using a five-point Likert scale, and detailed descriptive statistics and regression analyses were conducted.

The study finds that there is no significant association between social distancing (SD), changing in the economic environment (CEE), time constraint (TC) and stress on audit personnel (SAP) as repercussions of the COVID-19 pandemic with the quality of audit evidence (QAE). The disruption in operational results (DOR), changes in the internal control (CIC) and the stress on client personnel (SCP) significantly affect the quality of audit evidence. Moreover, there is a significant difference between Big and non-Big Four audit firms in terms of changes in economic conditions, internal controls, disruption of operational results and time-constraint variables. The latter has significantly affected the audit evidence quality for both academics and professionals.

Due to the implementation of SD and work-from-home policies, audit firms are highly recommended to invest more in digital programs and to be more adaptable to work-from-home, which policy and enhances the effectiveness and flexibility of communication between auditors and their clients.

This paper is one of the foremost papers that provides empirical evidence for the antecedents or variables that may affect audit quality evidence due to the COVID-19 pandemic.

]]>
The antecedents of COVID-19 contagion on quality of audit evidence in Egypt10.1108/JAEE-12-2022-0347Journal of Accounting in Emerging Economies2023-08-14© 2023 Emerald Publishing LimitedMarwa FarghalyMohamed A.K. BasuonyNeveen NoureldinKarim HegazyJournal of Accounting in Emerging Economiesahead-of-printahead-of-print2023-08-1410.1108/JAEE-12-2022-0347https://www.emerald.com/insight/content/doi/10.1108/JAEE-12-2022-0347/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Accountability at a local community placed in a global context: the case of the Jasmine Villagehttps://www.emerald.com/insight/content/doi/10.1108/JAEE-12-2022-0351/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe study examines how calculative practices and accountability appear in a rural community of marginalised people in Egypt who depend on jasmine plantations that contribute to the production of global essences. The data were collected from various sources, namely conversations with villagers, documents and relevant videos and news available on social media and the Internet. This study draws on the concepts of social accountability, the politics of blame avoidance and using calculative practices as a language to explain accountability in context. The author found a lack of accountability on the part of the government and business owners, with serious implications for the livelihoods of people in a community that has been wholly dependent on jasmine plantations for a century. Power holders have deployed a blame-shifting game to avoid social responsibility. In response, calculative practices rather than advanced accounting tools are used by the poor in the community to induce power holders to be accountable. The findings of this study show that authorities need to take proactive steps to address the disadvantaged position of powerless people in the lower echelons of society, recognising their accountability for those people. This paper enhances the understanding of the status of calculative practices and accountability in a community of marginalised people who contribute to the production of global commodities. The paper also enhances the understanding of what goes on behind the scenes with popular and prestigious commodities, whose development is initiated in poor countries, with the end product marketed in rich Western countries.Accountability at a local community placed in a global context: the case of the Jasmine Village
Ahmed Diab
Journal of Accounting in Emerging Economies, Vol. ahead-of-print, No. ahead-of-print, pp.-

The study examines how calculative practices and accountability appear in a rural community of marginalised people in Egypt who depend on jasmine plantations that contribute to the production of global essences.

The data were collected from various sources, namely conversations with villagers, documents and relevant videos and news available on social media and the Internet. This study draws on the concepts of social accountability, the politics of blame avoidance and using calculative practices as a language to explain accountability in context.

The author found a lack of accountability on the part of the government and business owners, with serious implications for the livelihoods of people in a community that has been wholly dependent on jasmine plantations for a century. Power holders have deployed a blame-shifting game to avoid social responsibility. In response, calculative practices rather than advanced accounting tools are used by the poor in the community to induce power holders to be accountable.

The findings of this study show that authorities need to take proactive steps to address the disadvantaged position of powerless people in the lower echelons of society, recognising their accountability for those people.

This paper enhances the understanding of the status of calculative practices and accountability in a community of marginalised people who contribute to the production of global commodities. The paper also enhances the understanding of what goes on behind the scenes with popular and prestigious commodities, whose development is initiated in poor countries, with the end product marketed in rich Western countries.

]]>
Accountability at a local community placed in a global context: the case of the Jasmine Village10.1108/JAEE-12-2022-0351Journal of Accounting in Emerging Economies2024-01-05© 2023 Emerald Publishing LimitedAhmed DiabJournal of Accounting in Emerging Economiesahead-of-printahead-of-print2024-01-0510.1108/JAEE-12-2022-0351https://www.emerald.com/insight/content/doi/10.1108/JAEE-12-2022-0351/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited