Journal of Financial Reporting and AccountingTable of Contents for Journal of Financial Reporting and Accounting. List of articles from the current issue, including Just Accepted (EarlyCite)https://www.emerald.com/insight/publication/issn/1985-2517/vol/22/iss/1?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestJournal of Financial Reporting and AccountingEmerald Publishing LimitedJournal of Financial Reporting and AccountingJournal of Financial Reporting and Accountinghttps://www.emerald.com/insight/proxy/containerImg?link=/resource/publication/journal/995fbc301cb7f4f227eec75f33a7cccb/urn:emeraldgroup.com:asset:id:binary:jfra.cover.jpghttps://www.emerald.com/insight/publication/issn/1985-2517/vol/22/iss/1?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestGuest editorial: Toward a better understanding of sustainability accounting in the energy industryhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2024-643/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestGuest editorial: Toward a better understanding of sustainability accounting in the energy industryGuest editorial: Toward a better understanding of sustainability accounting in the energy industry
Ahmed Hassanein, Khalil Ahmad Nimer, Khaled Hussainey
Journal of Financial Reporting and Accounting, Vol. 22, No. 1, pp.1-6]]>
Guest editorial: Toward a better understanding of sustainability accounting in the energy industry10.1108/JFRA-03-2024-643Journal of Financial Reporting and Accounting2024-02-21© 2024 Emerald Publishing LimitedAhmed HassaneinKhalil Ahmad NimerKhaled HussaineyJournal of Financial Reporting and Accounting2212024-02-2110.1108/JFRA-03-2024-643https://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2024-643/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Emerald Publishing Limited
Board characteristics and ESG disclosure in energy industry: evidence from emerging economieshttps://www.emerald.com/insight/content/doi/10.1108/JFRA-02-2023-0107/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to investigate the impact of board characteristics on environmental, social and governance (ESG) disclosure in the energy industry of emerging economies. The authors adopt the Bloomberg ESG rating to measure the extent of ESG disclosure using a sample of 1,260 observations from BRICS emerging economies. Multiple regression techniques were used to estimate the effect of board characteristics on ESG disclosures of a sample Brazil, Russia, India, China, and South Africa (BRICS) listed companies between 2010 and 2019. The authors find a relatively low (at 37%) level of ESG disclosure among the sampled firms and a relatively high degree of variability. The authors also find that board gender diversity, board composition and board diligence are positively related to the level of ESG disclosure while the study documents no relationship between board size and ESG disclosure. The study’s findings highlight the importance of corporate board attributes in influencing strategic decisions such as the level of ESG disclosure and the findings may be useful to regulators, policymakers and investors in making informed investment decisions. To the best of the authors’ knowledge, this study is one of the first attempts at examining the impact of board characteristics on ESG disclosure in the energy industry in emerging economies. The paper provides new evidence on the relationship between board characteristics (BC) and ESG disclosure in the energy industry of emerging BRICS countries within a panel multi-country research setting.Board characteristics and ESG disclosure in energy industry: evidence from emerging economies
Yusuf Nuhu, Ashraful Alam
Journal of Financial Reporting and Accounting, Vol. 22, No. 1, pp.7-28

This paper aims to investigate the impact of board characteristics on environmental, social and governance (ESG) disclosure in the energy industry of emerging economies.

The authors adopt the Bloomberg ESG rating to measure the extent of ESG disclosure using a sample of 1,260 observations from BRICS emerging economies. Multiple regression techniques were used to estimate the effect of board characteristics on ESG disclosures of a sample Brazil, Russia, India, China, and South Africa (BRICS) listed companies between 2010 and 2019.

The authors find a relatively low (at 37%) level of ESG disclosure among the sampled firms and a relatively high degree of variability. The authors also find that board gender diversity, board composition and board diligence are positively related to the level of ESG disclosure while the study documents no relationship between board size and ESG disclosure.

The study’s findings highlight the importance of corporate board attributes in influencing strategic decisions such as the level of ESG disclosure and the findings may be useful to regulators, policymakers and investors in making informed investment decisions.

To the best of the authors’ knowledge, this study is one of the first attempts at examining the impact of board characteristics on ESG disclosure in the energy industry in emerging economies. The paper provides new evidence on the relationship between board characteristics (BC) and ESG disclosure in the energy industry of emerging BRICS countries within a panel multi-country research setting.

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Board characteristics and ESG disclosure in energy industry: evidence from emerging economies10.1108/JFRA-02-2023-0107Journal of Financial Reporting and Accounting2023-07-28© 2023 Emerald Publishing LimitedYusuf NuhuAshraful AlamJournal of Financial Reporting and Accounting2212023-07-2810.1108/JFRA-02-2023-0107https://www.emerald.com/insight/content/doi/10.1108/JFRA-02-2023-0107/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
How big data features drive financial accounting and firm sustainability in the energy industryhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2023-0125/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to scrutinize the relationship between the perception of big data (BD) features and the primary outcomes of financial accounting. Likewise, it explores whether financial accounting practices moderate the relationship between BD features and firm sustainability. The study used a questionnaire survey based on the Likert scale for two distinct groups of participants: academic scholars and industry practitioners operating in the BD era within the energy sector. The results reveal significant positive associations between BD features and firm performance, reporting quality, earnings determinants, fair value measurements, risk management, firm value, the efficiency of the decision-making process, narrative disclosure and firm sustainability. Besides, the path analysis indicates an indirect impact of BD on firm sustainability via financial accounting practices. The results suggest that energy firms should consider incorporating BD analysis into their financial accounting processes to improve their sustainability performance and create long-term value for their stakeholders. The findings are particularly interesting to academics in accounting and business to improve the accounting curriculums to fit the technological revolution, especially in the field of BD analytics. Practitioners within energy industries must also refine their skills and knowledge to meet the challenges of BD in the foreseeable future. The results provide important implications for policy setters to revise current financial accounting standards to cope with technological innovation. The study makes a valuable contribution by critically examining the impact of BD on various financial accounting practices neglected in prior research. It highlights the transformative power of BD in the domain of financial accounting and provides insights into its potential implications for energy firms.How big data features drive financial accounting and firm sustainability in the energy industry
Mohsen Ebied Abdelghafar Younis Azzam, Marwa Saber Hamoda Alsayed, Abdulaziz Alsultan, Ahmed Hassanein
Journal of Financial Reporting and Accounting, Vol. 22, No. 1, pp.29-51

This study aims to scrutinize the relationship between the perception of big data (BD) features and the primary outcomes of financial accounting. Likewise, it explores whether financial accounting practices moderate the relationship between BD features and firm sustainability.

The study used a questionnaire survey based on the Likert scale for two distinct groups of participants: academic scholars and industry practitioners operating in the BD era within the energy sector.

The results reveal significant positive associations between BD features and firm performance, reporting quality, earnings determinants, fair value measurements, risk management, firm value, the efficiency of the decision-making process, narrative disclosure and firm sustainability. Besides, the path analysis indicates an indirect impact of BD on firm sustainability via financial accounting practices. The results suggest that energy firms should consider incorporating BD analysis into their financial accounting processes to improve their sustainability performance and create long-term value for their stakeholders.

The findings are particularly interesting to academics in accounting and business to improve the accounting curriculums to fit the technological revolution, especially in the field of BD analytics. Practitioners within energy industries must also refine their skills and knowledge to meet the challenges of BD in the foreseeable future. The results provide important implications for policy setters to revise current financial accounting standards to cope with technological innovation.

The study makes a valuable contribution by critically examining the impact of BD on various financial accounting practices neglected in prior research. It highlights the transformative power of BD in the domain of financial accounting and provides insights into its potential implications for energy firms.

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How big data features drive financial accounting and firm sustainability in the energy industry10.1108/JFRA-03-2023-0125Journal of Financial Reporting and Accounting2023-08-18© 2023 Emerald Publishing LimitedMohsen Ebied Abdelghafar Younis AzzamMarwa Saber Hamoda AlsayedAbdulaziz AlsultanAhmed HassaneinJournal of Financial Reporting and Accounting2212023-08-1810.1108/JFRA-03-2023-0125https://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2023-0125/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Internal control, debt risk, CEO education and earnings management evidence from Chinahttps://www.emerald.com/insight/content/doi/10.1108/JFRA-05-2023-0237/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to explore how earnings management techniques are affected by corporate financial debt risk (FDR), internal control (IC) effectiveness and CEO education. The study uses a sample from listed firms in China from 2010 to 2017, comprising different industries, including agriculture, forestry, livestock farming and fishing; mining; manufacturing; electric power, gas and water production and supply; construction; transport and storage; information technology; the real estate industry; social services; and communication and cultural. The regression analysis is used to test the hypotheses. The two-stage least squares technique is used to check for endogeneity issues. The study finds that firms are less likely to manage real earnings when they have more robust IC and FDR. Likewise, companies with weak ICs are more likely to manipulate real earnings. Besides, the study finds an influence of CEO education on the relationship between IC, FDR and real earnings management (REM). These results can be applied to the sectors in the sample covered by the research, and the authors do not overlook the energy industry sector for the importance of its role in the economy. There are some limitations for the researcher when performing any research, and this study is no exception. Researchers are urged to take these circumstances into consideration when generalizing or comparing the results because the methods used to calculate the measurement variables in each study may differ somewhat from those used in other research. In addition, expanding the current research design to incorporate additional nations may be an area of interest for future research and could aid in evaluating the effects of nation-specific elements (such as inflation, culture, legal systems and political considerations) on the usefulness of IC and decreasing FDR. Second, the current study focuses on the impact of IC and FDR on REM; this paper does not dissect the “black box” of IC and consider how each element affects earnings management. Future research may need to focus specifically on how effective IC would affect earnings management and precisely what IC mechanisms would discourage the management of earnings. Helping companies listed in China to make decisions and improve investors’ vision of the results of real companies’ businesses, as well as helping management to avoid falling into debt risk and the consequent effects and manipulation of earnings. By highlighting the significance of IC and debt risk in enhancing information quality in China, the results contribute to the body of work examining the relationship between IC, FDR and REM. In addition, this study uses a CEO’s education to moderate this link.Internal control, debt risk, CEO education and earnings management evidence from China
Guotai Chi, Ahmed R. Gooda
Journal of Financial Reporting and Accounting, Vol. 22, No. 1, pp.52-78

This study aims to explore how earnings management techniques are affected by corporate financial debt risk (FDR), internal control (IC) effectiveness and CEO education.

The study uses a sample from listed firms in China from 2010 to 2017, comprising different industries, including agriculture, forestry, livestock farming and fishing; mining; manufacturing; electric power, gas and water production and supply; construction; transport and storage; information technology; the real estate industry; social services; and communication and cultural. The regression analysis is used to test the hypotheses. The two-stage least squares technique is used to check for endogeneity issues.

The study finds that firms are less likely to manage real earnings when they have more robust IC and FDR. Likewise, companies with weak ICs are more likely to manipulate real earnings. Besides, the study finds an influence of CEO education on the relationship between IC, FDR and real earnings management (REM). These results can be applied to the sectors in the sample covered by the research, and the authors do not overlook the energy industry sector for the importance of its role in the economy.

There are some limitations for the researcher when performing any research, and this study is no exception. Researchers are urged to take these circumstances into consideration when generalizing or comparing the results because the methods used to calculate the measurement variables in each study may differ somewhat from those used in other research. In addition, expanding the current research design to incorporate additional nations may be an area of interest for future research and could aid in evaluating the effects of nation-specific elements (such as inflation, culture, legal systems and political considerations) on the usefulness of IC and decreasing FDR. Second, the current study focuses on the impact of IC and FDR on REM; this paper does not dissect the “black box” of IC and consider how each element affects earnings management. Future research may need to focus specifically on how effective IC would affect earnings management and precisely what IC mechanisms would discourage the management of earnings.

Helping companies listed in China to make decisions and improve investors’ vision of the results of real companies’ businesses, as well as helping management to avoid falling into debt risk and the consequent effects and manipulation of earnings.

By highlighting the significance of IC and debt risk in enhancing information quality in China, the results contribute to the body of work examining the relationship between IC, FDR and REM. In addition, this study uses a CEO’s education to moderate this link.

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Internal control, debt risk, CEO education and earnings management evidence from China10.1108/JFRA-05-2023-0237Journal of Financial Reporting and Accounting2023-10-19© 2023 Emerald Publishing LimitedGuotai ChiAhmed R. GoodaJournal of Financial Reporting and Accounting2212023-10-1910.1108/JFRA-05-2023-0237https://www.emerald.com/insight/content/doi/10.1108/JFRA-05-2023-0237/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Can CSR constrain accruals and real earnings management during the COVID-19 pandemic? An international analysishttps://www.emerald.com/insight/content/doi/10.1108/JFRA-06-2023-0307/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to provide insights into the complicated relationship between earnings management (EM) and corporate social responsibility (CSR) during the financial downturn caused by the COVID-19 pandemic. Parametric t-tests and non-parametric Wilcoxon rank-sum tests accompanied by ordinary least squares regression analysis, augmented with Newey–West procedure approaches, are used for a sample that consists of 1,984 firms from 47 countries for the period of 2014–2020. EM was proxied once with discretionary accruals using the modified Jones model (1995) and once with real earnings management (REM) using the Roychowdhury model (2006). This study uses environmental, social, and governance scores from the Thomson Reuters database as a proxy for CSR. The results reveal that firms tend to engage more in EM practices during the pandemic and that more socially responsible firms tend to be honest and transparent during the financial reporting process. Interestingly, it was found that more socially responsible firms engaged less in REM practices during the pandemic. The findings of this research help lenders, investors, policymakers and managers gain a better understanding of EM practices during a negative shock and shed light on the importance of CSR in being ethical. The findings extend both the literature on the role of CSR in promoting financial reporting quality and the literature on the impact of COVID-19 on accrual and REM practices.Can CSR constrain accruals and real earnings management during the COVID-19 pandemic? An international analysis
Hania Waleed Tawfik El-Feel, Diana Mostafa Mohamed, Hala Magdy Amin, Khaled Hussainey
Journal of Financial Reporting and Accounting, Vol. 22, No. 1, pp.79-104

This paper aims to provide insights into the complicated relationship between earnings management (EM) and corporate social responsibility (CSR) during the financial downturn caused by the COVID-19 pandemic.

Parametric t-tests and non-parametric Wilcoxon rank-sum tests accompanied by ordinary least squares regression analysis, augmented with Newey–West procedure approaches, are used for a sample that consists of 1,984 firms from 47 countries for the period of 2014–2020. EM was proxied once with discretionary accruals using the modified Jones model (1995) and once with real earnings management (REM) using the Roychowdhury model (2006). This study uses environmental, social, and governance scores from the Thomson Reuters database as a proxy for CSR.

The results reveal that firms tend to engage more in EM practices during the pandemic and that more socially responsible firms tend to be honest and transparent during the financial reporting process. Interestingly, it was found that more socially responsible firms engaged less in REM practices during the pandemic.

The findings of this research help lenders, investors, policymakers and managers gain a better understanding of EM practices during a negative shock and shed light on the importance of CSR in being ethical.

The findings extend both the literature on the role of CSR in promoting financial reporting quality and the literature on the impact of COVID-19 on accrual and REM practices.

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Can CSR constrain accruals and real earnings management during the COVID-19 pandemic? An international analysis10.1108/JFRA-06-2023-0307Journal of Financial Reporting and Accounting2023-10-11© 2023 Emerald Publishing LimitedHania Waleed Tawfik El-FeelDiana Mostafa MohamedHala Magdy AminKhaled HussaineyJournal of Financial Reporting and Accounting2212023-10-1110.1108/JFRA-06-2023-0307https://www.emerald.com/insight/content/doi/10.1108/JFRA-06-2023-0307/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Does the sun ‘shine’ on utility firms? Evidence from pollution control bonds and overinvestment relationshiphttps://www.emerald.com/insight/content/doi/10.1108/JFRA-07-2023-0370/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to investigate the impact of pollution control bonds (PCBs) on overinvestment within utility firms. This empirical study analyzes a data set comprising 215 US energy firms observed from 2011 to 2021, using the ordinary least square regression with standard errors adjusted for firm-level clustering. The study reveals a negative relationship between PCBs and overinvestment, indicating that PCBs are an effective tool in curbing excessive investment. Additionally, it demonstrates that chief executive officer (CEO) overconfidence diminishes the influence of PCBs on overinvestment. These findings remain robust across various metrics for measuring overinvestment and CEO overconfidence, as well as when alternative estimation methods are used. These results align with insights derived from agency theory and upper echelon theories. Regulators are encouraged to actively promote the use of PCBs as a financing tool for environmentally focused initiatives. To achieve this, regulatory bodies should enhance their presence within the utility sector, particularly in regions grappling with higher pollution levels. This requires the implementation of strategic policies and regulatory frameworks aimed at mitigating excessive investments. Simultaneously, policymakers should take proactive measures to introduce financial instruments designed to optimize investment efficiency, thus facilitating eco-friendly projects. To the best of the authors’ knowledge, this paper holds the distinction of being the first to examine the impact of a specific type of green bond, namely, PCBs, on overinvestment. Furthermore, it contributes to the literature on personality traits, particularly within the context of the upper echelon theory, by investigating the moderating influence of CEO overconfidence.Does the sun ‘shine’ on utility firms? Evidence from pollution control bonds and overinvestment relationship
Cyrine Khiari, Imen Khanchel, Naima Lassoued
Journal of Financial Reporting and Accounting, Vol. 22, No. 1, pp.105-130

This study aims to investigate the impact of pollution control bonds (PCBs) on overinvestment within utility firms.

This empirical study analyzes a data set comprising 215 US energy firms observed from 2011 to 2021, using the ordinary least square regression with standard errors adjusted for firm-level clustering.

The study reveals a negative relationship between PCBs and overinvestment, indicating that PCBs are an effective tool in curbing excessive investment. Additionally, it demonstrates that chief executive officer (CEO) overconfidence diminishes the influence of PCBs on overinvestment. These findings remain robust across various metrics for measuring overinvestment and CEO overconfidence, as well as when alternative estimation methods are used. These results align with insights derived from agency theory and upper echelon theories.

Regulators are encouraged to actively promote the use of PCBs as a financing tool for environmentally focused initiatives. To achieve this, regulatory bodies should enhance their presence within the utility sector, particularly in regions grappling with higher pollution levels. This requires the implementation of strategic policies and regulatory frameworks aimed at mitigating excessive investments. Simultaneously, policymakers should take proactive measures to introduce financial instruments designed to optimize investment efficiency, thus facilitating eco-friendly projects.

To the best of the authors’ knowledge, this paper holds the distinction of being the first to examine the impact of a specific type of green bond, namely, PCBs, on overinvestment. Furthermore, it contributes to the literature on personality traits, particularly within the context of the upper echelon theory, by investigating the moderating influence of CEO overconfidence.

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Does the sun ‘shine’ on utility firms? Evidence from pollution control bonds and overinvestment relationship10.1108/JFRA-07-2023-0370Journal of Financial Reporting and Accounting2023-10-24© 2023 Emerald Publishing LimitedCyrine KhiariImen KhanchelNaima LassouedJournal of Financial Reporting and Accounting2212023-10-2410.1108/JFRA-07-2023-0370https://www.emerald.com/insight/content/doi/10.1108/JFRA-07-2023-0370/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Carbon emissions reduction and tax evasion behaviour: a trade-off between environmental goals and economic feasibilityhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-07-2023-0390/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to examine the impact of carbon emissions (carbon dioxide [CO2]) reduction on tax evasion behaviour. This study uses data from 200 countries from 2000 to 2017. The empirical analysis is based on various methodological tools, including ordinary least-squares model, fixed- and random-effects models. In addition, GMM and linear mixed model has been used for robustness purposes. The results show that carbon emissions reduction significantly affects tax evasion behaviour; when carbon emissions decrease, tax evasion behaviour increases. This indicates that the reduction of CO2 emissions is linked to significant costs, placing a financial burden on companies and leading them to evade taxes to counterbalance these costs. This study has important implications, as it highlights that the efforts made by countries to minimize CO2 emissions are associated with high costs and may lead to increased tax evasion, potentially contributing to countries’ budget deficits. The results provide valuable insights for policymakers and stakeholders to implement effective environmental and fiscal regulations that contribute to a sustainable and eco-friendly future. These regulations can help maintain a balance between improving economic growth and ensuring the protection of the environment. To the best of the authors’ knowledge, this is the first paper to test the impact of carbon emissions on tax evasion using macro-level data.Carbon emissions reduction and tax evasion behaviour: a trade-off between environmental goals and economic feasibility
Ahmed Yamen, Hounaida Mersni
Journal of Financial Reporting and Accounting, Vol. 22, No. 1, pp.131-146

This paper aims to examine the impact of carbon emissions (carbon dioxide [CO2]) reduction on tax evasion behaviour.

This study uses data from 200 countries from 2000 to 2017. The empirical analysis is based on various methodological tools, including ordinary least-squares model, fixed- and random-effects models. In addition, GMM and linear mixed model has been used for robustness purposes.

The results show that carbon emissions reduction significantly affects tax evasion behaviour; when carbon emissions decrease, tax evasion behaviour increases. This indicates that the reduction of CO2 emissions is linked to significant costs, placing a financial burden on companies and leading them to evade taxes to counterbalance these costs.

This study has important implications, as it highlights that the efforts made by countries to minimize CO2 emissions are associated with high costs and may lead to increased tax evasion, potentially contributing to countries’ budget deficits. The results provide valuable insights for policymakers and stakeholders to implement effective environmental and fiscal regulations that contribute to a sustainable and eco-friendly future. These regulations can help maintain a balance between improving economic growth and ensuring the protection of the environment.

To the best of the authors’ knowledge, this is the first paper to test the impact of carbon emissions on tax evasion using macro-level data.

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Carbon emissions reduction and tax evasion behaviour: a trade-off between environmental goals and economic feasibility10.1108/JFRA-07-2023-0390Journal of Financial Reporting and Accounting2023-11-02© 2023 Emerald Publishing LimitedAhmed YamenHounaida MersniJournal of Financial Reporting and Accounting2212023-11-0210.1108/JFRA-07-2023-0390https://www.emerald.com/insight/content/doi/10.1108/JFRA-07-2023-0390/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Accounting practices and regulations for extractive industries: a framework for harmonisationhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-07-2023-0425/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe purpose of this study is to provide a harmonisation framework for the diverse accounting practices by extractive industries. The study takes a three-stage approach. The first involves a comprehensive literature review of the historical evolution of accounting regulations by extractive industries. The second involves constructing an accounting practice index for extractive industries. The third involves constructing a harmonisation framework. The accounting practice index provides empirical evidence of the wide diversity of accounting practices by extractive industries. Analysis of the literature review addresses the several attempts by accounting and regulatory bodies to standardise the diverse practices of accounting by extractive industries and reasons for the lack of successful standardisations. The authors extract lessons from these previous attempts and propose a harmonisation framework. The proposed harmonisation framework can be used to align together the diverse accounting practices by extractive industries and enhance comparability and consistency of accounting figures and statements produced by these industries. Harmonising the diverse accounting practices is crucial for investment decision-making. The harmonisation framework is the first of its kind that could enhance the comparability of accounts of extractive industries’ firms and be used to harmonise diverse accounting practices by other industries.Accounting practices and regulations for extractive industries: a framework for harmonisation
Hafez Abdo, Freeman Brobbey Owusu, Musa Mangena
Journal of Financial Reporting and Accounting, Vol. 22, No. 1, pp.147-180

The purpose of this study is to provide a harmonisation framework for the diverse accounting practices by extractive industries.

The study takes a three-stage approach. The first involves a comprehensive literature review of the historical evolution of accounting regulations by extractive industries. The second involves constructing an accounting practice index for extractive industries. The third involves constructing a harmonisation framework.

The accounting practice index provides empirical evidence of the wide diversity of accounting practices by extractive industries. Analysis of the literature review addresses the several attempts by accounting and regulatory bodies to standardise the diverse practices of accounting by extractive industries and reasons for the lack of successful standardisations. The authors extract lessons from these previous attempts and propose a harmonisation framework.

The proposed harmonisation framework can be used to align together the diverse accounting practices by extractive industries and enhance comparability and consistency of accounting figures and statements produced by these industries. Harmonising the diverse accounting practices is crucial for investment decision-making.

The harmonisation framework is the first of its kind that could enhance the comparability of accounts of extractive industries’ firms and be used to harmonise diverse accounting practices by other industries.

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Accounting practices and regulations for extractive industries: a framework for harmonisation10.1108/JFRA-07-2023-0425Journal of Financial Reporting and Accounting2023-09-18© 2023 Emerald Publishing LimitedHafez AbdoFreeman Brobbey OwusuMusa MangenaJournal of Financial Reporting and Accounting2212023-09-1810.1108/JFRA-07-2023-0425https://www.emerald.com/insight/content/doi/10.1108/JFRA-07-2023-0425/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
“Go green” – evaluating the roles of environmental concerns, environmental social norms and green technology in fostering pro-green banking behaviorshttps://www.emerald.com/insight/content/doi/10.1108/JFRA-05-2023-0232/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe purpose of this paper is to evaluate the relationship between bankers’ perspectives and their pro-green banking behaviors (i.e. intentions). Specifically, how do bankers’ perspectives on environmental concerns, environmental normative structure and green technology affect their intentions toward G-banking activities? A theoretical framework of the theory of bounded rational planned behavior (TBRPB) as its foundation was established. Using measurement scales to measure different aspects of environmental concern, environmental normative structure, green technology, attitudes, perceived behavioral control and subjective norms, a survey instrument was developed to examine the various associations implied by the model of TBRPB. Data were collected from the bankers of selected commercial banks in Bangladesh following the random sampling procedure. The data were analyzed using the partial least square structural equation modeling technique. Findings indicate that all of the predictors appear to be robust in predicting the G-banking intention of the sampled bankers in Bangladesh. The results also show that attitudes, subjective norms and perceived behavioral control have significant mediating effects toward bankers’ bounded rational G-banking intention. There are a few limitations in the study. First, the study considers environmental concerns as an antecedent of the attitude of bankers toward G-banking activities. Future studies can explore other variables related to environmental problems to study G-banking adoption and practices. Second, this study only considers the private conventional bankers as respondents to the survey to assess G-baking intention. In the future, other types of bankers, such as Islamic bankers and public banks’ bankers could be included in the survey to explore G-banking practices. Finally, this research has been done in a developing country-context. In this study, environmental concerns of bankers appeared to be highly significant predictors to influence their attitudes toward bounded rational G-banking intention. Similarly, the social normative structure also appears to be a robust antecedent of subjective norms to influence bounded rational G-banking intention of respondent bankers. Finally, green technology or bakers’ personal and skill-related ability to control bounded rational G-banking intention also appeared to be a strongly significant predictor of green banking activities. All this evidence implies that respondent bankers in the sample responded positively to provide their positive intention toward G-banking activities based on their environmental concern. Important social implication of the current study is G-banking practices can help reduce carbon emissions and other pollutants which would enrich overall environmental sustainability and ecological conditions. Few studies are directed on G-banking perspective in Bangladesh. This research is one of the empirical studies which will certainly add values for the clients, institutions and policymakers in banking paradigm.“Go green” – evaluating the roles of environmental concerns, environmental social norms and green technology in fostering pro-green banking behaviors
Mohammad Ali Ashraf
Journal of Financial Reporting and Accounting, Vol. 22, No. 1, pp.181-203

The purpose of this paper is to evaluate the relationship between bankers’ perspectives and their pro-green banking behaviors (i.e. intentions). Specifically, how do bankers’ perspectives on environmental concerns, environmental normative structure and green technology affect their intentions toward G-banking activities?

A theoretical framework of the theory of bounded rational planned behavior (TBRPB) as its foundation was established. Using measurement scales to measure different aspects of environmental concern, environmental normative structure, green technology, attitudes, perceived behavioral control and subjective norms, a survey instrument was developed to examine the various associations implied by the model of TBRPB. Data were collected from the bankers of selected commercial banks in Bangladesh following the random sampling procedure. The data were analyzed using the partial least square structural equation modeling technique.

Findings indicate that all of the predictors appear to be robust in predicting the G-banking intention of the sampled bankers in Bangladesh. The results also show that attitudes, subjective norms and perceived behavioral control have significant mediating effects toward bankers’ bounded rational G-banking intention.

There are a few limitations in the study. First, the study considers environmental concerns as an antecedent of the attitude of bankers toward G-banking activities. Future studies can explore other variables related to environmental problems to study G-banking adoption and practices. Second, this study only considers the private conventional bankers as respondents to the survey to assess G-baking intention. In the future, other types of bankers, such as Islamic bankers and public banks’ bankers could be included in the survey to explore G-banking practices. Finally, this research has been done in a developing country-context.

In this study, environmental concerns of bankers appeared to be highly significant predictors to influence their attitudes toward bounded rational G-banking intention. Similarly, the social normative structure also appears to be a robust antecedent of subjective norms to influence bounded rational G-banking intention of respondent bankers. Finally, green technology or bakers’ personal and skill-related ability to control bounded rational G-banking intention also appeared to be a strongly significant predictor of green banking activities. All this evidence implies that respondent bankers in the sample responded positively to provide their positive intention toward G-banking activities based on their environmental concern.

Important social implication of the current study is G-banking practices can help reduce carbon emissions and other pollutants which would enrich overall environmental sustainability and ecological conditions.

Few studies are directed on G-banking perspective in Bangladesh. This research is one of the empirical studies which will certainly add values for the clients, institutions and policymakers in banking paradigm.

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“Go green” – evaluating the roles of environmental concerns, environmental social norms and green technology in fostering pro-green banking behaviors10.1108/JFRA-05-2023-0232Journal of Financial Reporting and Accounting2023-12-18© 2023 Emerald Publishing LimitedMohammad Ali AshrafJournal of Financial Reporting and Accounting2212023-12-1810.1108/JFRA-05-2023-0232https://www.emerald.com/insight/content/doi/10.1108/JFRA-05-2023-0232/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Audit fees, audit seasonality and audit quality in Nigeria: a mediation analysishttps://www.emerald.com/insight/content/doi/10.1108/JFRA-01-2022-0010/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to examine the mediating role of audit seasonality on the association between audit fees and audit quality in Nigerian deposit money banks. The sample comprises 14 banks with annual financial statements between 2008 and 2020. The modified Baron and Kenny’s (1986) causal mediation model by Iacobucci et al. (2007) through the use of bootstrapped partial least square structural equation modelling and Sobel’s (1986) z-test is adopted to achieve this study’s objective. The results of the causal mediation analysis show evidence of a fully mediating role of audit seasonality in the association between audit fees and audit quality in the Nigerian banking industry. This study extends the body of knowledge by demonstrating how audit fees influence audit quality through audit seasonality as a mediator in line with the job demands-and resources and conservation of resources theories. Regulatory authorities should be wary of policies that will further increase the workload of already burdened personnel of audit firms as the uniform fiscal year-end of 31 December introduced in the Nigerian banking system has unintended consequences on audit fees and audit quality. To the best of the author’s knowledge, this is one of the first studies to provide evidence on the indirect association between audit fees and audit quality.Audit fees, audit seasonality and audit quality in Nigeria: a mediation analysis
Tajudeen John Ayoola
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to examine the mediating role of audit seasonality on the association between audit fees and audit quality in Nigerian deposit money banks.

The sample comprises 14 banks with annual financial statements between 2008 and 2020. The modified Baron and Kenny’s (1986) causal mediation model by Iacobucci et al. (2007) through the use of bootstrapped partial least square structural equation modelling and Sobel’s (1986) z-test is adopted to achieve this study’s objective.

The results of the causal mediation analysis show evidence of a fully mediating role of audit seasonality in the association between audit fees and audit quality in the Nigerian banking industry.

This study extends the body of knowledge by demonstrating how audit fees influence audit quality through audit seasonality as a mediator in line with the job demands-and resources and conservation of resources theories. Regulatory authorities should be wary of policies that will further increase the workload of already burdened personnel of audit firms as the uniform fiscal year-end of 31 December introduced in the Nigerian banking system has unintended consequences on audit fees and audit quality.

To the best of the author’s knowledge, this is one of the first studies to provide evidence on the indirect association between audit fees and audit quality.

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Audit fees, audit seasonality and audit quality in Nigeria: a mediation analysis10.1108/JFRA-01-2022-0010Journal of Financial Reporting and Accounting2022-07-20© 2022 Emerald Publishing LimitedTajudeen John AyoolaJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-07-2010.1108/JFRA-01-2022-0010https://www.emerald.com/insight/content/doi/10.1108/JFRA-01-2022-0010/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
The relationship between compliance level and value creation: evidence from integrated reports in Turkeyhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-01-2022-0016/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to investigate the level of reporting compliance in terms of content elements, measure to what extent each content element of the integrated reporting (IR) framework is linked to value creation and demonstrate the relationship between the level of compliance and value creation linkages. The sample for this study consists of 12 companies, 11 of which are public and 1 is non-public. The data is obtained from the Integrated Reporting Turkey Network founded in 2015 in Turkey. This study applies a holistic approach integrating two different content analysis methods. First, a multi-weighted scoring system is constructed by using the IR content elements and the previously developed indexes in the literature. Second, in-depth, sentence-by-sentence content analysis is used to determine the relation between the content elements and value creation. The results of the multi-weighted scoring system indicate a high level of compliance in the banking sector. On the other hand, the scores of the content analysis demonstrate higher scores in the disclosures of “basis of preparation and presentation”, “organizational overview and external environment”, “strategy and resource allocation”, “performance” and “business model” elements, while lower scores in the elements of “risk and opportunities” and “outlook.” The lowest compliance level associated with lower content analysis scores may indicate a low level of value creation potential. Consequently, this two-stage scoring is critical, as it clarifies the relation between compliance level and the explanatory power of each content element from a value creation perspective. This study aims to support the policymakers and regulators in highlighting the importance of measuring and reporting value. Furthermore, it intends to encourage companies to produce reports that increase the value relevance of accounting information to contribute to the development of capital markets. The current literature includes research that mainly concentrates only on the quality or extent of IR disclosure practices. This study offers a combined analysis that helps to determine at what level a company has accomplished the expectations of the International Integrated Reporting Council in terms of both the content and the value creation potential.The relationship between compliance level and value creation: evidence from integrated reports in Turkey
B. Esra Aslanertik, Bengü Yardımcı
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to investigate the level of reporting compliance in terms of content elements, measure to what extent each content element of the integrated reporting (IR) framework is linked to value creation and demonstrate the relationship between the level of compliance and value creation linkages.

The sample for this study consists of 12 companies, 11 of which are public and 1 is non-public. The data is obtained from the Integrated Reporting Turkey Network founded in 2015 in Turkey. This study applies a holistic approach integrating two different content analysis methods. First, a multi-weighted scoring system is constructed by using the IR content elements and the previously developed indexes in the literature. Second, in-depth, sentence-by-sentence content analysis is used to determine the relation between the content elements and value creation.

The results of the multi-weighted scoring system indicate a high level of compliance in the banking sector. On the other hand, the scores of the content analysis demonstrate higher scores in the disclosures of “basis of preparation and presentation”, “organizational overview and external environment”, “strategy and resource allocation”, “performance” and “business model” elements, while lower scores in the elements of “risk and opportunities” and “outlook.” The lowest compliance level associated with lower content analysis scores may indicate a low level of value creation potential. Consequently, this two-stage scoring is critical, as it clarifies the relation between compliance level and the explanatory power of each content element from a value creation perspective.

This study aims to support the policymakers and regulators in highlighting the importance of measuring and reporting value. Furthermore, it intends to encourage companies to produce reports that increase the value relevance of accounting information to contribute to the development of capital markets. The current literature includes research that mainly concentrates only on the quality or extent of IR disclosure practices. This study offers a combined analysis that helps to determine at what level a company has accomplished the expectations of the International Integrated Reporting Council in terms of both the content and the value creation potential.

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The relationship between compliance level and value creation: evidence from integrated reports in Turkey10.1108/JFRA-01-2022-0016Journal of Financial Reporting and Accounting2022-05-17© 2022 Emerald Publishing LimitedB. Esra AslanertikBengü YardımcıJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-05-1710.1108/JFRA-01-2022-0016https://www.emerald.com/insight/content/doi/10.1108/JFRA-01-2022-0016/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
Challenges and prospects in reporting practices in Malaysiahttps://www.emerald.com/insight/content/doi/10.1108/JFRA-01-2022-0018/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to explain the justification behind the current weak waqf reporting practices in waqf institutions in Malaysia and also investigates the factors affecting the good waqf reporting practices. A series of interviews with four waqf officers who are involved with waqf reporting process from four different waqf institutions in Malaysia were conducted. The findings show a number of reasons for the current weak waqf reporting practices including the absence of standardised waqf reporting standards, no reporting or disclosure awareness by the waqf management, limited reporting channels from the state authorities to the national authorities, diversification in the governance structure and reluctance of waqf administration to disclose waqf reporting. The findings also identified several factors contributing to good waqf reporting practices. This includes leadership, good cultural setting within the institution, political will as a push factor, limited qualified personnel as well as sustainability issues and finally, the visibility of the waqf report itself. The study findings and recommendations are useful for the State Islamic Religious Councils and waqf institutions in Malaysia to enhance the waqf reporting practices in Malaysia. This study is among the few studies that identify the reasons and factors affecting the good waqf reporting practices in Malaysia.Challenges and prospects in reporting practices in Malaysia
Muhammad Iqmal Hisham Kamaruddin, Mustafa Mohd Hanefah, Rosnia Masruki
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to explain the justification behind the current weak waqf reporting practices in waqf institutions in Malaysia and also investigates the factors affecting the good waqf reporting practices.

A series of interviews with four waqf officers who are involved with waqf reporting process from four different waqf institutions in Malaysia were conducted.

The findings show a number of reasons for the current weak waqf reporting practices including the absence of standardised waqf reporting standards, no reporting or disclosure awareness by the waqf management, limited reporting channels from the state authorities to the national authorities, diversification in the governance structure and reluctance of waqf administration to disclose waqf reporting. The findings also identified several factors contributing to good waqf reporting practices. This includes leadership, good cultural setting within the institution, political will as a push factor, limited qualified personnel as well as sustainability issues and finally, the visibility of the waqf report itself.

The study findings and recommendations are useful for the State Islamic Religious Councils and waqf institutions in Malaysia to enhance the waqf reporting practices in Malaysia.

This study is among the few studies that identify the reasons and factors affecting the good waqf reporting practices in Malaysia.

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Challenges and prospects in reporting practices in Malaysia10.1108/JFRA-01-2022-0018Journal of Financial Reporting and Accounting2022-04-12© 2022 Emerald Publishing LimitedMuhammad Iqmal Hisham KamaruddinMustafa Mohd HanefahRosnia MasrukiJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-04-1210.1108/JFRA-01-2022-0018https://www.emerald.com/insight/content/doi/10.1108/JFRA-01-2022-0018/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
Do tenure and age of board chair matter for R&D investment?https://www.emerald.com/insight/content/doi/10.1108/JFRA-01-2022-0023/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to examine whether the age and tenure of the chair of the board of directors are related to research and development (R&D) investment in China. This study uses A-share manufacturing firms that traded on the Shanghai and Shenzhen stock exchange between 2009 and 2018. This study uses OLS regressions, controls for self-selection bias, and uses an instrumental variable to alleviate the concern of endogeneity. This study finds that chair tenure has a negative relationship with R&D investment. This study does not find a significant relationship between chair age and R&D investment. This study contributes to corporate governance and strategic management literature by highlighting chair tenure as a new factor affecting R&D investments. It also adds a significant contribution to the limited literature on the chair’s role in strategic decisions. Moreover, companies that are eager to strengthen corporate governance and maintain sustained innovation may reconsider the chair tenure. Given that many proposals for board governance reform explicitly stress the importance of limiting board tenure, this study contributes to policymakers by providing evidence in support of these proposals.Do tenure and age of board chair matter for R&D investment?
Ala’a Azzam, Salem Alhababsah
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to examine whether the age and tenure of the chair of the board of directors are related to research and development (R&D) investment in China.

This study uses A-share manufacturing firms that traded on the Shanghai and Shenzhen stock exchange between 2009 and 2018. This study uses OLS regressions, controls for self-selection bias, and uses an instrumental variable to alleviate the concern of endogeneity.

This study finds that chair tenure has a negative relationship with R&D investment. This study does not find a significant relationship between chair age and R&D investment.

This study contributes to corporate governance and strategic management literature by highlighting chair tenure as a new factor affecting R&D investments. It also adds a significant contribution to the limited literature on the chair’s role in strategic decisions. Moreover, companies that are eager to strengthen corporate governance and maintain sustained innovation may reconsider the chair tenure. Given that many proposals for board governance reform explicitly stress the importance of limiting board tenure, this study contributes to policymakers by providing evidence in support of these proposals.

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Do tenure and age of board chair matter for R&D investment?10.1108/JFRA-01-2022-0023Journal of Financial Reporting and Accounting2022-12-29© 2022 Emerald Publishing LimitedAla’a AzzamSalem AlhababsahJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-12-2910.1108/JFRA-01-2022-0023https://www.emerald.com/insight/content/doi/10.1108/JFRA-01-2022-0023/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
Sustainability reporting – a systematic review of various dimensions, theoretical and methodological underpinningshttps://www.emerald.com/insight/content/doi/10.1108/JFRA-01-2022-0029/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis review aims to summarize the extent to which sustainability dimensions are covered in the selected qualitative literature, the theoretical and ontological underpinnings that have informed sustainability research and the qualitative methodologies used in that literature. This study uses a systematic review to examine prior empirical studies in sustainability reporting between 2000 and 2021. This review contributes to sustainability research by identifying unexplored and underexplored areas for future studies, such as Indigenous people’s rights, employee health and safety practice, product responsibility, gender and leadership diversity. Institutional and stakeholder theories are widely used in the selected literature, whereas moral legitimacy remains underexplored. The authors suggest that ethnographic and historical research will increase the richness of academic research findings on sustainability reporting. This review is limited to qualitative studies only because its richness allows researchers to apply various methodological and theoretical approaches to understand engagement in sustainability reporting practice. This review follows a novel approach of bringing the selected studies’ scopes, theories and methodologies together. This approach permits researchers to formulate a research question coherently using a logical framework for a research problem.Sustainability reporting – a systematic review of various dimensions, theoretical and methodological underpinnings
Taslima Nasreen, Ron Baker, Davar Rezania
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This review aims to summarize the extent to which sustainability dimensions are covered in the selected qualitative literature, the theoretical and ontological underpinnings that have informed sustainability research and the qualitative methodologies used in that literature.

This study uses a systematic review to examine prior empirical studies in sustainability reporting between 2000 and 2021.

This review contributes to sustainability research by identifying unexplored and underexplored areas for future studies, such as Indigenous people’s rights, employee health and safety practice, product responsibility, gender and leadership diversity. Institutional and stakeholder theories are widely used in the selected literature, whereas moral legitimacy remains underexplored. The authors suggest that ethnographic and historical research will increase the richness of academic research findings on sustainability reporting.

This review is limited to qualitative studies only because its richness allows researchers to apply various methodological and theoretical approaches to understand engagement in sustainability reporting practice.

This review follows a novel approach of bringing the selected studies’ scopes, theories and methodologies together. This approach permits researchers to formulate a research question coherently using a logical framework for a research problem.

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Sustainability reporting – a systematic review of various dimensions, theoretical and methodological underpinnings10.1108/JFRA-01-2022-0029Journal of Financial Reporting and Accounting2023-01-16© 2022 Emerald Publishing LimitedTaslima NasreenRon BakerDavar RezaniaJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-01-1610.1108/JFRA-01-2022-0029https://www.emerald.com/insight/content/doi/10.1108/JFRA-01-2022-0029/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
The impact of the COVID-19 pandemic on social and environmental reporting and financial performance of airlines operating in the UKhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-01-2023-0032/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe COVID-19 pandemic has had an unprecedented impact on almost all sectors, but the airline industry has been globally most affected. Although recent years have witnessed an increase in attention to corporate social responsibility (CSR) reporting, the disclosure within the airline sector has been historically limited. This paper aims to explore the impact of the COVID-19 pandemic on social and environmental reporting and financial performance of airlines operating in the UK. The paper applies content, textual and financial analysis to 16 company-year observations covering two fiscal years, 2018 and 2020, of eight airlines operating in the UK. A coding structure is based on the Global Reporting Initiative guidelines. NVivo is used for textual comparative analysis. The research reveals that social disclosures exceeded environmental disclosures in the period before and during COVID-19. However, the pandemic has shown a significant increase in environmental rather than social disclosures. The study evidences the dominating themes of social and environmental disclosure, showing changes between 2018 and 2020. The study finds the extent of negative impact of COVID-19 on airlines’ financial performance. A period of crisis prompts companies to release more information, with a positive correlation between higher debt levels and increased disclosure. The findings complement the emerging empirical evidence on the impact of COVID-19 on CSR reporting and demonstrate how challenges posed by the COVID-19 crisis affect the disclosure practices in the airline industry.The impact of the COVID-19 pandemic on social and environmental reporting and financial performance of airlines operating in the UK
Enoch Opare Mintah, Nadia Gulko
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

The COVID-19 pandemic has had an unprecedented impact on almost all sectors, but the airline industry has been globally most affected. Although recent years have witnessed an increase in attention to corporate social responsibility (CSR) reporting, the disclosure within the airline sector has been historically limited. This paper aims to explore the impact of the COVID-19 pandemic on social and environmental reporting and financial performance of airlines operating in the UK.

The paper applies content, textual and financial analysis to 16 company-year observations covering two fiscal years, 2018 and 2020, of eight airlines operating in the UK. A coding structure is based on the Global Reporting Initiative guidelines. NVivo is used for textual comparative analysis.

The research reveals that social disclosures exceeded environmental disclosures in the period before and during COVID-19. However, the pandemic has shown a significant increase in environmental rather than social disclosures. The study evidences the dominating themes of social and environmental disclosure, showing changes between 2018 and 2020. The study finds the extent of negative impact of COVID-19 on airlines’ financial performance. A period of crisis prompts companies to release more information, with a positive correlation between higher debt levels and increased disclosure.

The findings complement the emerging empirical evidence on the impact of COVID-19 on CSR reporting and demonstrate how challenges posed by the COVID-19 crisis affect the disclosure practices in the airline industry.

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The impact of the COVID-19 pandemic on social and environmental reporting and financial performance of airlines operating in the UK10.1108/JFRA-01-2023-0032Journal of Financial Reporting and Accounting2023-06-23© 2023 Emerald Publishing LimitedEnoch Opare MintahNadia GulkoJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-06-2310.1108/JFRA-01-2023-0032https://www.emerald.com/insight/content/doi/10.1108/JFRA-01-2023-0032/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The impact of financial assets’ classification according to IFRS 9 on firm value: the case of MENA region’s bankshttps://www.emerald.com/insight/content/doi/10.1108/JFRA-01-2023-0035/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe purpose of this study is twofold. On the one hand, it studies the impact of IFRS 9 adoption on the firm value; and on the other hand, it investigates the impact of the classification of financial assets on the firm value. The study covers a sample of 55 listed banks in the Middle Eastern and North African (MENA) region. Data is collected for three years (2017–2019). The findings show that banks’ value is not impacted by IFRS 9 adoption but by financial assets’ classification. Firm value is positively affected by fair value through other comprehensive income assets, while it is negatively affected by amortized cost and fair value through profit or loss assets. The results of the additional analysis show consistent outcomes. This research reveals important managerial implications. Priority should be given to the financial assets’ classification strategy following the adoption of IFRS 9 to boost the market valuation of banks. It may be useful for investors, managers and regulators in their decision-making. This study enriches previous research as IFRS 9 is a new standard, and its adoption consequences need to be investigated. A few recent studies have focused on IFRS 9 as a whole or on other parts of IFRS 9, namely, the impairment regime and hedge accounting and concern developed contexts. However, this research adds to the knowledge of capital market studies by investigating the application of IFRS 9 in terms of classification in the MENA region.The impact of financial assets’ classification according to IFRS 9 on firm value: the case of MENA region’s banks
Khouloud Ben Ltaief, Hanen Moalla
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

The purpose of this study is twofold. On the one hand, it studies the impact of IFRS 9 adoption on the firm value; and on the other hand, it investigates the impact of the classification of financial assets on the firm value.

The study covers a sample of 55 listed banks in the Middle Eastern and North African (MENA) region. Data is collected for three years (2017–2019).

The findings show that banks’ value is not impacted by IFRS 9 adoption but by financial assets’ classification. Firm value is positively affected by fair value through other comprehensive income assets, while it is negatively affected by amortized cost and fair value through profit or loss assets. The results of the additional analysis show consistent outcomes.

This research reveals important managerial implications. Priority should be given to the financial assets’ classification strategy following the adoption of IFRS 9 to boost the market valuation of banks. It may be useful for investors, managers and regulators in their decision-making.

This study enriches previous research as IFRS 9 is a new standard, and its adoption consequences need to be investigated. A few recent studies have focused on IFRS 9 as a whole or on other parts of IFRS 9, namely, the impairment regime and hedge accounting and concern developed contexts. However, this research adds to the knowledge of capital market studies by investigating the application of IFRS 9 in terms of classification in the MENA region.

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The impact of financial assets’ classification according to IFRS 9 on firm value: the case of MENA region’s banks10.1108/JFRA-01-2023-0035Journal of Financial Reporting and Accounting2023-11-02© 2023 Emerald Publishing LimitedKhouloud Ben LtaiefHanen MoallaJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-11-0210.1108/JFRA-01-2023-0035https://www.emerald.com/insight/content/doi/10.1108/JFRA-01-2023-0035/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Accounting data, overvaluation, and the cross-section of volatility: industry sector evidencehttps://www.emerald.com/insight/content/doi/10.1108/JFRA-01-2023-0042/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to investigate the variation in overvaluation proxies and volatility across industry sectors and time. Using industry sector data from the S&P Capital IQ database, this study applies traditional cross-sectional regressions to investigate the relationship between overvaluation and volatility over the 2001–2020 time period. This study finds that the most volatile industry sectors generally do not coincide with overvalued industry sectors in the cross-section, implying that there are limitations to price-multiple methods for forecasting future volatility. Rather, this study finds that historical volatility significantly increases the goodness-of-fit when modeling volatility in the cross section of industry sectors. The findings of this study imply that firms should increase disclosures and transparency about corporate practices to decrease downside risk that stems from bad news. In addition, the findings underline the consistency between market efficiency and high levels of volatility in periods of significant uncertainty. This study proposes a novel approach to examining the cross section of volatility across time for industry sectors.Accounting data, overvaluation, and the cross-section of volatility: industry sector evidence
Omid Sabbaghi
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to investigate the variation in overvaluation proxies and volatility across industry sectors and time.

Using industry sector data from the S&P Capital IQ database, this study applies traditional cross-sectional regressions to investigate the relationship between overvaluation and volatility over the 2001–2020 time period.

This study finds that the most volatile industry sectors generally do not coincide with overvalued industry sectors in the cross-section, implying that there are limitations to price-multiple methods for forecasting future volatility. Rather, this study finds that historical volatility significantly increases the goodness-of-fit when modeling volatility in the cross section of industry sectors. The findings of this study imply that firms should increase disclosures and transparency about corporate practices to decrease downside risk that stems from bad news. In addition, the findings underline the consistency between market efficiency and high levels of volatility in periods of significant uncertainty.

This study proposes a novel approach to examining the cross section of volatility across time for industry sectors.

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Accounting data, overvaluation, and the cross-section of volatility: industry sector evidence10.1108/JFRA-01-2023-0042Journal of Financial Reporting and Accounting2023-10-11© 2023 Emerald Publishing LimitedOmid SabbaghiJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-10-1110.1108/JFRA-01-2023-0042https://www.emerald.com/insight/content/doi/10.1108/JFRA-01-2023-0042/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The relationship between the role of management accountants, advanced manufacturing technologies, cost system sophistication and performance: a path modelhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-01-2023-0047/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to test a contingency-based path model that concurrently links the role of management accountants (MA) and advanced manufacturing technologies (AMTs) to cost system sophistication (CSS), as well as linking the latter to improvements in organisational performance through improving cost management and product planning decisions. This paper used the questionnaire survey strategy to collect data from 373 medium and large manufacturing business units based in the UK, then subjected the data to structural equation modelling analysis to test a contingency-based path model. The results show that the role of MAs and AMTs positively influence CSS. Moreover, it was found that the latter is positively associated with improvements in cost management decisions which, in turn, lead to improvements in organisational performance. However, no support was found for the association between the level of CSS and improvements in product planning decisions, although the latter was found to be positively associated with organisational performance. These results confirm the theory and empirical findings regarding the role that MAs and AMTs play in designing the cost accounting system, and support the argument that adopting sophisticated cost systems does not lead directly to improvements in organisational performance, unless the benefits of such systems, in terms of improved decision-making and cost applications, are used. This research contributes to the literature by testing a contingency-based path model that incorporates hitherto underexamined contextual factors, namely, the role of MAs and AMTs; examining the effect of CSS on a critical output, organisational performance and the mechanisms of this effect; and considering the complexity of the business environments through the concurrent testing of the relationships involved in the research model.The relationship between the role of management accountants, advanced manufacturing technologies, cost system sophistication and performance: a path model
Badr Banhmeid, Abdulrahman Aljabr
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to test a contingency-based path model that concurrently links the role of management accountants (MA) and advanced manufacturing technologies (AMTs) to cost system sophistication (CSS), as well as linking the latter to improvements in organisational performance through improving cost management and product planning decisions.

This paper used the questionnaire survey strategy to collect data from 373 medium and large manufacturing business units based in the UK, then subjected the data to structural equation modelling analysis to test a contingency-based path model.

The results show that the role of MAs and AMTs positively influence CSS. Moreover, it was found that the latter is positively associated with improvements in cost management decisions which, in turn, lead to improvements in organisational performance. However, no support was found for the association between the level of CSS and improvements in product planning decisions, although the latter was found to be positively associated with organisational performance. These results confirm the theory and empirical findings regarding the role that MAs and AMTs play in designing the cost accounting system, and support the argument that adopting sophisticated cost systems does not lead directly to improvements in organisational performance, unless the benefits of such systems, in terms of improved decision-making and cost applications, are used.

This research contributes to the literature by testing a contingency-based path model that incorporates hitherto underexamined contextual factors, namely, the role of MAs and AMTs; examining the effect of CSS on a critical output, organisational performance and the mechanisms of this effect; and considering the complexity of the business environments through the concurrent testing of the relationships involved in the research model.

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The relationship between the role of management accountants, advanced manufacturing technologies, cost system sophistication and performance: a path model10.1108/JFRA-01-2023-0047Journal of Financial Reporting and Accounting2023-08-18© 2023 Emerald Publishing LimitedBadr BanhmeidAbdulrahman AljabrJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-08-1810.1108/JFRA-01-2023-0047https://www.emerald.com/insight/content/doi/10.1108/JFRA-01-2023-0047/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The impact of COVID-19 on the relationship between auditor industry specialization and audit fees: empirical evidence from Jordanhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-01-2023-0052/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestMotivated by the disastrous impact of COVID-19 on the world’s economies, the purpose of this study is to examine its effect on the association between auditor industry specialization and external audit fees, referring to two time periods: before and during COVID-19. A quantitative analysis based on the ordinary least squares regression is performed, using 3,200 company-year observations from 2005 to 2020 in Jordan to test the hypotheses. The qualitative component is a textual analysis of firms’ annual reports that support the quantitative analysis findings. The analysis confirms there is a direct positive relationship between COVID-19 and external audit fees, confirming the tough consequences of the crisis on audit complexity and risks. While the results show evidence that the relationship between auditor specialist and audit fees is weakened because of COVID-19, the content analysis explained that COVID-19 led to fewer requests for high-quality audit, given the urgent need to report on firms’ financial circumstances. Jordan’s capital market is controlled by family businesses, and the insolvency of several large firms during COVID-19 led auditors to offer their services at low cost. The findings of this study have serious implications for policymakers, legislators, regulators and the audit profession, as they examine the arising difficulties during a period of economic uncertainty. The findings can help to improve laws that control the auditing industry in Jordan following the damage caused by COVID-19. As well, the outcomes can be extrapolated to other Middle East nations. To the best of the authors’ knowledge, the authors believe that this research presents the first evidence on the influence of COVID-19 on the auditing industry.The impact of COVID-19 on the relationship between auditor industry specialization and audit fees: empirical evidence from Jordan
Esraa Esam Alharasis, Mohammad Alhadab, Manal Alidarous, Fouad Jamaani, Abeer F. Alkhwaldi
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

Motivated by the disastrous impact of COVID-19 on the world’s economies, the purpose of this study is to examine its effect on the association between auditor industry specialization and external audit fees, referring to two time periods: before and during COVID-19.

A quantitative analysis based on the ordinary least squares regression is performed, using 3,200 company-year observations from 2005 to 2020 in Jordan to test the hypotheses. The qualitative component is a textual analysis of firms’ annual reports that support the quantitative analysis findings.

The analysis confirms there is a direct positive relationship between COVID-19 and external audit fees, confirming the tough consequences of the crisis on audit complexity and risks. While the results show evidence that the relationship between auditor specialist and audit fees is weakened because of COVID-19, the content analysis explained that COVID-19 led to fewer requests for high-quality audit, given the urgent need to report on firms’ financial circumstances. Jordan’s capital market is controlled by family businesses, and the insolvency of several large firms during COVID-19 led auditors to offer their services at low cost.

The findings of this study have serious implications for policymakers, legislators, regulators and the audit profession, as they examine the arising difficulties during a period of economic uncertainty. The findings can help to improve laws that control the auditing industry in Jordan following the damage caused by COVID-19. As well, the outcomes can be extrapolated to other Middle East nations.

To the best of the authors’ knowledge, the authors believe that this research presents the first evidence on the influence of COVID-19 on the auditing industry.

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The impact of COVID-19 on the relationship between auditor industry specialization and audit fees: empirical evidence from Jordan10.1108/JFRA-01-2023-0052Journal of Financial Reporting and Accounting2023-06-22© 2023 Emerald Publishing LimitedEsraa Esam AlharasisMohammad AlhadabManal AlidarousFouad JamaaniAbeer F. AlkhwaldiJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-06-2210.1108/JFRA-01-2023-0052https://www.emerald.com/insight/content/doi/10.1108/JFRA-01-2023-0052/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
How management accounting practices integrate with big data analytics and its impact on corporate sustainabilityhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-01-2023-0053/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to investigate the relationships between big data analytics, management accounting practices and corporate sustainability and, more precisely, the impact of the integration between big data analytics and management accounting on corporate sustainability performance development. A qualitative case study approach is used in this study with multiple collecting data tools as in-depth interviews and observations, in addition to the content analysis used of the annual reports for the year 2021, of Almarai manufacturing corporate (one of the leaders of food and beverage manufacturing corporates in Saudi Arabia and other countries). Research findings provide good insights about the significant impact of the effective integration between big data analytics and management accounting on corporate sustainability performance development, big data can assist management accounting to form corporate value-added strategies and activities. The study is limitedly applied to one manufacturing corporate as a study case; therefore, the findings cannot be generalized. Thus, future research can examine the association between the current study variables with wide-scale applications and with different approaches and in different contexts to enrich the findings. Moreover, future research may focus on the integration between big data analytics and management accounting reports in the meta-verse environment to explore the benefits that corporates could gain from the features and capabilities of meta-verse technology. There is a research gap regarding the impact of the integration between big data analytics and management accounting practices on corporate sustainability development, as most of the previous studies focused on two variables only of the current study variables; therefore, this study tries to investigate and give important insights about it.How management accounting practices integrate with big data analytics and its impact on corporate sustainability
Abeer M. Abdelhalim
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to investigate the relationships between big data analytics, management accounting practices and corporate sustainability and, more precisely, the impact of the integration between big data analytics and management accounting on corporate sustainability performance development.

A qualitative case study approach is used in this study with multiple collecting data tools as in-depth interviews and observations, in addition to the content analysis used of the annual reports for the year 2021, of Almarai manufacturing corporate (one of the leaders of food and beverage manufacturing corporates in Saudi Arabia and other countries).

Research findings provide good insights about the significant impact of the effective integration between big data analytics and management accounting on corporate sustainability performance development, big data can assist management accounting to form corporate value-added strategies and activities.

The study is limitedly applied to one manufacturing corporate as a study case; therefore, the findings cannot be generalized. Thus, future research can examine the association between the current study variables with wide-scale applications and with different approaches and in different contexts to enrich the findings. Moreover, future research may focus on the integration between big data analytics and management accounting reports in the meta-verse environment to explore the benefits that corporates could gain from the features and capabilities of meta-verse technology.

There is a research gap regarding the impact of the integration between big data analytics and management accounting practices on corporate sustainability development, as most of the previous studies focused on two variables only of the current study variables; therefore, this study tries to investigate and give important insights about it.

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How management accounting practices integrate with big data analytics and its impact on corporate sustainability10.1108/JFRA-01-2023-0053Journal of Financial Reporting and Accounting2023-09-06© 2023 Emerald Publishing LimitedAbeer M. AbdelhalimJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-09-0610.1108/JFRA-01-2023-0053https://www.emerald.com/insight/content/doi/10.1108/JFRA-01-2023-0053/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Governance mechanisms, firm performance and CEO compensation: evidence from Jordanhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-01-2023-0062/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to investigate the effect of governance mechanisms and firm performance on chief executive officer (CEO) compensation in relation to the Jordanian business environment. This study also examines the moderating role of gender diversity. The sample is drawn from the annual reports of 68 Jordanian firms between 2015 and 2019. This paper uses the ordinary least square regression. It also uses the generalised method of moments approach to control any endogeneity issue and analyses the data in depth. In addition, it uses a dynamic model to address concerns regarding causality in the study’s models. The results show that governance mechanisms and firm performance have an impact on CEO compensation. Furthermore, the outcomes indicate that gender diversity significantly and positively moderates the association between firm performance and CEO compensation. These findings enhance and support agency theory in the context of Jordan. The study’s results have significant implications for policymakers, shareholders, investors, academicians and the public in the developing Jordanian market. The findings also support more monitoring and inspection to prevent the occurrence of opportunistic management behaviour and ensure that CEO remuneration packages are appropriately designed. This study provides a unique understanding by explaining the impact of governance and performance on CEO compensation in a developing country such as Jordan. Besides that, the current study extends prior studies in Jordan significantly.Governance mechanisms, firm performance and CEO compensation: evidence from Jordan
Faraj Salman Alfawareh, Edie Erman Che Johari, Chai-Aun Ooi
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to investigate the effect of governance mechanisms and firm performance on chief executive officer (CEO) compensation in relation to the Jordanian business environment. This study also examines the moderating role of gender diversity.

The sample is drawn from the annual reports of 68 Jordanian firms between 2015 and 2019. This paper uses the ordinary least square regression. It also uses the generalised method of moments approach to control any endogeneity issue and analyses the data in depth. In addition, it uses a dynamic model to address concerns regarding causality in the study’s models.

The results show that governance mechanisms and firm performance have an impact on CEO compensation. Furthermore, the outcomes indicate that gender diversity significantly and positively moderates the association between firm performance and CEO compensation. These findings enhance and support agency theory in the context of Jordan.

The study’s results have significant implications for policymakers, shareholders, investors, academicians and the public in the developing Jordanian market. The findings also support more monitoring and inspection to prevent the occurrence of opportunistic management behaviour and ensure that CEO remuneration packages are appropriately designed.

This study provides a unique understanding by explaining the impact of governance and performance on CEO compensation in a developing country such as Jordan. Besides that, the current study extends prior studies in Jordan significantly.

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Governance mechanisms, firm performance and CEO compensation: evidence from Jordan10.1108/JFRA-01-2023-0062Journal of Financial Reporting and Accounting2023-10-13© 2023 Emerald Publishing LimitedFaraj Salman AlfawarehEdie Erman Che JohariChai-Aun OoiJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-10-1310.1108/JFRA-01-2023-0062https://www.emerald.com/insight/content/doi/10.1108/JFRA-01-2023-0062/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Management’s tone change in MD&A and tax avoidancehttps://www.emerald.com/insight/content/doi/10.1108/JFRA-01-2024-0005/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe purpose of this paper is to explore how variations in management’s tone within management’s discussion and analysis (MD&A) sections of 10-K reports can serve as an indicator of tax avoidance and highlight the complex relationship between such linguistic shifts and the tax avoidance decisions within firms. The paper uses a textual analysis approach to identify linguistic cues in MD&A sections of 10-K filings related to tax avoidance, going beyond traditional quantitative measures. The study uses differences in negative word occurrences in MD&A to measure management’s tone change and examines various measures of tax avoidance. The sample covers the period from 1993 to 2017 and comprises all firms with 10-K filings available on EDGAR, totaling over 30,000 firm-year observations. The findings indicate a complementary relationship between tax avoidance and other drivers of firm performance. When firms have more negative management’s tone, they are less willing to engage in tax avoidance and vice versa. The study’s approach with management’s tone change provides a different and statistically significant improvement in model fit for detecting tax avoidance. This paper provides actionable insights for detecting tax avoidance through the analysis of management’s tone in corporate disclosures, offering a new tool for researchers, investors and tax authorities. It highlights the importance of linguistic cues as indicators of tax avoidance behavior, complementing traditional financial metrics. The paper contributes to the literature by using management’s tone change as a time-varying factor to explain tax avoidance behavior. It uncovers a larger set of linguistic cues in MD&A that can be used to detect tax avoidance. This research provides a complementary approach to traditional quantitative tax avoidance measures and offers insights into the overall relationship between tax avoidance and firm performance, going beyond one-dimensional measures typically used in prior literature.Management’s tone change in MD&A and tax avoidance
Yicheng Wang, Brian Wright
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

The purpose of this paper is to explore how variations in management’s tone within management’s discussion and analysis (MD&A) sections of 10-K reports can serve as an indicator of tax avoidance and highlight the complex relationship between such linguistic shifts and the tax avoidance decisions within firms.

The paper uses a textual analysis approach to identify linguistic cues in MD&A sections of 10-K filings related to tax avoidance, going beyond traditional quantitative measures. The study uses differences in negative word occurrences in MD&A to measure management’s tone change and examines various measures of tax avoidance. The sample covers the period from 1993 to 2017 and comprises all firms with 10-K filings available on EDGAR, totaling over 30,000 firm-year observations.

The findings indicate a complementary relationship between tax avoidance and other drivers of firm performance. When firms have more negative management’s tone, they are less willing to engage in tax avoidance and vice versa. The study’s approach with management’s tone change provides a different and statistically significant improvement in model fit for detecting tax avoidance.

This paper provides actionable insights for detecting tax avoidance through the analysis of management’s tone in corporate disclosures, offering a new tool for researchers, investors and tax authorities. It highlights the importance of linguistic cues as indicators of tax avoidance behavior, complementing traditional financial metrics.

The paper contributes to the literature by using management’s tone change as a time-varying factor to explain tax avoidance behavior. It uncovers a larger set of linguistic cues in MD&A that can be used to detect tax avoidance. This research provides a complementary approach to traditional quantitative tax avoidance measures and offers insights into the overall relationship between tax avoidance and firm performance, going beyond one-dimensional measures typically used in prior literature.

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Management’s tone change in MD&A and tax avoidance10.1108/JFRA-01-2024-0005Journal of Financial Reporting and Accounting2024-03-25© 2024 Emerald Publishing LimitedYicheng WangBrian WrightJournal of Financial Reporting and Accountingahead-of-printahead-of-print2024-03-2510.1108/JFRA-01-2024-0005https://www.emerald.com/insight/content/doi/10.1108/JFRA-01-2024-0005/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Emerald Publishing Limited
The effect of IFRS 8 on segments disclosure practices in South East Asiahttps://www.emerald.com/insight/content/doi/10.1108/JFRA-02-2021-0058/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper analyzes and compares segments disclosure practices of listed companies of Pakistan and Bangladesh under International Financial Reporting Standard (IFRS) 8 with companies from India under Accounting Standard 17 over three-year period from 2013 to 2015. Furthermore, the purpose of this paper was to investigate that how the selection of chief operating decision-maker (CODM) by management, industry type, governance and firm characteristics affects segments disclosure practices in South East Asia. Finally, how the relationship among segment disclosure, firm characteristics and corporate governance is moderated through the big 4 audit firm. To achieve these objectives, data were collected from annual reports of the top 100 companies of each country and selected based on market capitalization for three years period 2013–2015. Results state that majority of companies in South East Asia are using business class for defining operating/primary segments. Regarding reporting of operating/primary segments and geographic/secondary segments along with geographic fineness score, Indian companies are continuously on the lower side as compared to companies from Pakistan and Bangladesh. Furthermore, it was found that industry type and selection of CODM have a highly significant effect on segments disclosure practices. Finally, results of regression analysis found that the application of IFRS 8 in Pakistan and Bangladesh has a significant positive effect on disclosure of operating/primary as well as geographic/secondary segments as compared to India. Further, the role of corporate governance mechanism in influencing segments disclosure was found as least in South East Asia. Further appointment of big 4 audit firm as external auditor has only significant positive effect on disclosure of segments items. Finally, based on additional analysis, it was found that big 4 auditor moderates the relationship only in the case of reporting of operating/primary segments. Based on these results, the performance of Indian companies regarding disclosure of operating/primary segments, geographic/secondary segments along geographic fineness score is quite low despite the fastest growing economy in the world. This raises concerns about the quality of segment reporting in India, the world’s fastest expanding economy. These results imply that there is a need of an effective role by the external auditor to improve the quality of segment reporting in developing countries, which is principle based.The effect of IFRS 8 on segments disclosure practices in South East Asia
Khurram Ashfaq, Shafique Ur Rehman, Nhat Tan Nguyen, Adil Riaz
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper analyzes and compares segments disclosure practices of listed companies of Pakistan and Bangladesh under International Financial Reporting Standard (IFRS) 8 with companies from India under Accounting Standard 17 over three-year period from 2013 to 2015. Furthermore, the purpose of this paper was to investigate that how the selection of chief operating decision-maker (CODM) by management, industry type, governance and firm characteristics affects segments disclosure practices in South East Asia. Finally, how the relationship among segment disclosure, firm characteristics and corporate governance is moderated through the big 4 audit firm.

To achieve these objectives, data were collected from annual reports of the top 100 companies of each country and selected based on market capitalization for three years period 2013–2015.

Results state that majority of companies in South East Asia are using business class for defining operating/primary segments. Regarding reporting of operating/primary segments and geographic/secondary segments along with geographic fineness score, Indian companies are continuously on the lower side as compared to companies from Pakistan and Bangladesh. Furthermore, it was found that industry type and selection of CODM have a highly significant effect on segments disclosure practices. Finally, results of regression analysis found that the application of IFRS 8 in Pakistan and Bangladesh has a significant positive effect on disclosure of operating/primary as well as geographic/secondary segments as compared to India. Further, the role of corporate governance mechanism in influencing segments disclosure was found as least in South East Asia. Further appointment of big 4 audit firm as external auditor has only significant positive effect on disclosure of segments items. Finally, based on additional analysis, it was found that big 4 auditor moderates the relationship only in the case of reporting of operating/primary segments.

Based on these results, the performance of Indian companies regarding disclosure of operating/primary segments, geographic/secondary segments along geographic fineness score is quite low despite the fastest growing economy in the world. This raises concerns about the quality of segment reporting in India, the world’s fastest expanding economy.

These results imply that there is a need of an effective role by the external auditor to improve the quality of segment reporting in developing countries, which is principle based.

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The effect of IFRS 8 on segments disclosure practices in South East Asia10.1108/JFRA-02-2021-0058Journal of Financial Reporting and Accounting2022-04-07© 2022 Emerald Publishing LimitedKhurram AshfaqShafique Ur RehmanNhat Tan NguyenAdil RiazJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-04-0710.1108/JFRA-02-2021-0058https://www.emerald.com/insight/content/doi/10.1108/JFRA-02-2021-0058/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
Women on board and the cost of equity: the mediating role of information asymmetryhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-02-2022-0048/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to examine whether information asymmetry (IA) mediates the relationship between women directors and the cost of equity (COE). Specifically, this study posits that women directors tend to lower the COE through the channel of IA. This study uses the US-listed firms’ data from 2002 to 2014, comprising 11,189 firm-year observations. This study measures the COE by aggregating the four unique market-based COE models and apply pooled ordinary least square to estimate our results. This study documents that women directors are linked to IA, and that IA is linked to the COE. Furthermore, in the mediation test, IA fully mediates the relationship between women directors and the COE. This study's results also validate the critical mass hypothesis, as the IA shows full mediation between the critical mass of women directors and COE. This study also discusses the limitations and major implications of the results along with possible future directions. This study also supports the positive role of females in improvising the economic performance of the firms and supporting the sustainable development goals-5 (gender equality). The originality of this study lies in its theoretical as well as empirical contributions. First, this study follows the line of inquiry of the mediation analysis, thereby contributing by examining whether the relationship between women directors and financial value, i.e. COE, is indirect. Second, in addition to ex post measures of the COE, this study used four ex ante unique market-based models to measure the COE. Most of the prior studies just rely on book-based measures or use a single market-based mode. Third, the findings contribute insights into how women directors add value and benefits firms.Women on board and the cost of equity: the mediating role of information asymmetry
Aitzaz Ahsan Alias Sarang, Asad Ali Rind, Mamdouh Abdulaziz Saleh Al-Faryan, Asif Saeed
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to examine whether information asymmetry (IA) mediates the relationship between women directors and the cost of equity (COE). Specifically, this study posits that women directors tend to lower the COE through the channel of IA.

This study uses the US-listed firms’ data from 2002 to 2014, comprising 11,189 firm-year observations. This study measures the COE by aggregating the four unique market-based COE models and apply pooled ordinary least square to estimate our results.

This study documents that women directors are linked to IA, and that IA is linked to the COE. Furthermore, in the mediation test, IA fully mediates the relationship between women directors and the COE. This study's results also validate the critical mass hypothesis, as the IA shows full mediation between the critical mass of women directors and COE. This study also discusses the limitations and major implications of the results along with possible future directions.

This study also supports the positive role of females in improvising the economic performance of the firms and supporting the sustainable development goals-5 (gender equality).

The originality of this study lies in its theoretical as well as empirical contributions. First, this study follows the line of inquiry of the mediation analysis, thereby contributing by examining whether the relationship between women directors and financial value, i.e. COE, is indirect. Second, in addition to ex post measures of the COE, this study used four ex ante unique market-based models to measure the COE. Most of the prior studies just rely on book-based measures or use a single market-based mode. Third, the findings contribute insights into how women directors add value and benefits firms.

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Women on board and the cost of equity: the mediating role of information asymmetry10.1108/JFRA-02-2022-0048Journal of Financial Reporting and Accounting2022-09-19© 2022 Emerald Publishing LimitedAitzaz Ahsan Alias SarangAsad Ali RindMamdouh Abdulaziz Saleh Al-FaryanAsif SaeedJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-09-1910.1108/JFRA-02-2022-0048https://www.emerald.com/insight/content/doi/10.1108/JFRA-02-2022-0048/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
Access to educated workforce and the choice of external audit: international evidence from small and medium enterpriseshttps://www.emerald.com/insight/content/doi/10.1108/JFRA-02-2022-0051/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to document the effect of educated workforce on the decision of small and medium enterprises (SMEs) to use external auditors to verify their financial statements. This paper uses the probit regression models and the data from 141 developing countries to test the arguments presented in this paper. The data is provided by the World Bank’s Enterprise Surveys and is collected during the period between 2006 and 2020. The paper shows that SMEs with inadequate access to educated workforce are more likely to use external auditors to verify their financial statements. The findings are robust to the comprehensive inclusion of relevant controls and to a number of sensitivity tests. The sensitivity tests include dividing samples based on SME’s size, country’s gross domestic product and country’s location. The results also remain qualitatively the same after correcting for potential endogeneity concerns. Furthermore, the paper shows that the relationship between access to educated workforce and the choice of external audit is moderated by several SME-specific characteristics, such as its size, ownership concentration, managerial experience and tax-related problems. This is an initial attempt to highlight the role played by the quality of workforce on the choice of external audit among SMEs in an international context. Most of prior literature on this topic focuses on the publicly listed firms.Access to educated workforce and the choice of external audit: international evidence from small and medium enterprises
Omar Farooq, Mukhammadfoik Bakhadirov
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to document the effect of educated workforce on the decision of small and medium enterprises (SMEs) to use external auditors to verify their financial statements.

This paper uses the probit regression models and the data from 141 developing countries to test the arguments presented in this paper. The data is provided by the World Bank’s Enterprise Surveys and is collected during the period between 2006 and 2020.

The paper shows that SMEs with inadequate access to educated workforce are more likely to use external auditors to verify their financial statements. The findings are robust to the comprehensive inclusion of relevant controls and to a number of sensitivity tests. The sensitivity tests include dividing samples based on SME’s size, country’s gross domestic product and country’s location. The results also remain qualitatively the same after correcting for potential endogeneity concerns. Furthermore, the paper shows that the relationship between access to educated workforce and the choice of external audit is moderated by several SME-specific characteristics, such as its size, ownership concentration, managerial experience and tax-related problems.

This is an initial attempt to highlight the role played by the quality of workforce on the choice of external audit among SMEs in an international context. Most of prior literature on this topic focuses on the publicly listed firms.

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Access to educated workforce and the choice of external audit: international evidence from small and medium enterprises10.1108/JFRA-02-2022-0051Journal of Financial Reporting and Accounting2022-11-15© 2022 Emerald Publishing LimitedOmar FarooqMukhammadfoik BakhadirovJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-11-1510.1108/JFRA-02-2022-0051https://www.emerald.com/insight/content/doi/10.1108/JFRA-02-2022-0051/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
The impact of IFRS convergence on market liquidity: evidence from Indiahttps://www.emerald.com/insight/content/doi/10.1108/JFRA-02-2022-0055/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to investigate the effects of IFRS convergence on market liquidity and to analyze the firm-level heterogeneity in liquidity effects based on reporting incentive, firm size, ownership structure and firm leverage. The empirical analysis is based on firm-fixed effect regression using several proxies of market liquidity as dependent variables. The sample consists of 337 firms listed on the National Stock Exchange (NSE) who shifted to IFRS from the financial year 2016–2017. The empirical findings indicate that IFRS convergence has contributed to the significant increase in market liquidity in a weaker enforcement country, i.e. India. Additionally, when the study performs the heterogeneity test of IFRS impact, the results indicate the presence of significant cross-sectional differences in such liquidity effects across firms. Thus, altogether the findings suggest that both accounting convergence and firm-level factors are likely to be the mechanism underlying the observed improvement in market liquidity. In the current literature, there is an ongoing debate about whether the observed post-IFRS effects are driven by the change in accounting standard per se or by other related factors. Therefore, by studying the liquidity effects of IFRS convergence in India, this study provides evidence regarding the sources of the documented IFRS effects. Moreover, the study indicates the significance of firm-level factors in determining the observed liquidity outcomes around IFRS adoption, which is unique to the literature.The impact of IFRS convergence on market liquidity: evidence from India
Saravanan R., Mohammad Firoz
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to investigate the effects of IFRS convergence on market liquidity and to analyze the firm-level heterogeneity in liquidity effects based on reporting incentive, firm size, ownership structure and firm leverage.

The empirical analysis is based on firm-fixed effect regression using several proxies of market liquidity as dependent variables. The sample consists of 337 firms listed on the National Stock Exchange (NSE) who shifted to IFRS from the financial year 2016–2017.

The empirical findings indicate that IFRS convergence has contributed to the significant increase in market liquidity in a weaker enforcement country, i.e. India. Additionally, when the study performs the heterogeneity test of IFRS impact, the results indicate the presence of significant cross-sectional differences in such liquidity effects across firms. Thus, altogether the findings suggest that both accounting convergence and firm-level factors are likely to be the mechanism underlying the observed improvement in market liquidity.

In the current literature, there is an ongoing debate about whether the observed post-IFRS effects are driven by the change in accounting standard per se or by other related factors. Therefore, by studying the liquidity effects of IFRS convergence in India, this study provides evidence regarding the sources of the documented IFRS effects. Moreover, the study indicates the significance of firm-level factors in determining the observed liquidity outcomes around IFRS adoption, which is unique to the literature.

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The impact of IFRS convergence on market liquidity: evidence from India10.1108/JFRA-02-2022-0055Journal of Financial Reporting and Accounting2022-08-02© 2022 Emerald Publishing LimitedSaravanan R.Mohammad FirozJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-08-0210.1108/JFRA-02-2022-0055https://www.emerald.com/insight/content/doi/10.1108/JFRA-02-2022-0055/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
Firms’ characteristics, corporate governance, and the adoption of sustainability reporting: evidence from Gulf Cooperation Council countrieshttps://www.emerald.com/insight/content/doi/10.1108/JFRA-02-2023-0066/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe purpose of the study is to investigate the factors that influence the adoption of new sustainability reporting (SDG) and external assurance (EXTA) practices. This study also examines the relationship between sustainability reporting activity and corporate economic performance for a sample of 99 companies in Gulf Cooperation Council (GCC) countries that addressed SDGs in their sustainability reports published in 2019. Using a two-stage analysis, this study examines how firms’ characteristics and corporate governance variables affect SDG and economic performance, as well as the firm’s decision to adopt EXTA statements for a sample of companies in that addressed SDGs in their sustainability reports published in 2019. The authors collected data from the Global Reporting Initiative’s (GRI) Sustainability Disclosure database and the Bureau van Dijk for Orbis database. The results show that the variables firm size, profitability, big 4 auditors and government ownership significantly affect SDG and economic performance. The results also reveal that firms operating in the manufacturing sector are positively correlated with SDG and the firm’s decision to adopt EXTA statements. Furthermore, the results indicate that board independence positively affects SDGs and EXTA. The results can be particularly relevant and timely in helping large GCC companies promote their engagement to sustainable development practices by adopting more sustainable long-term strategies and policies. The findings could also guide managers in the strategic direction to identify firms’ characteristics and corporate governance features essential to promote sustainability reporting, an increasingly important performance indicator for investors and to enhance their confidence in the capital market. The results may also have practical implications to policymakers and other regulators in GCC countries to define effective frameworks that promote sustainable development reports and the use of EXTA. The results make significant contributions by providing new insights to the existing literature on sustainability reporting in emerging markets by examining a unique perspective on the influence of firms’ characteristics and corporate governance features on the adoption of new sustainability reporting practices. The authors further add to the previous literature on the relationship between a firm’s economic performance and sustainable reporting by providing evidence from large companies in GCC countries, which might benefit from the adoption of multiple conceptual lenses, in this case, legitimacy and stakeholder theories. Lastly, through the empirical findings, this study provides economic validity to the 2018 joint initiative of the GRI and the United Nations Global Compact to strengthen corporate actions to achieve the United Nations SDGs.Firms’ characteristics, corporate governance, and the adoption of sustainability reporting: evidence from Gulf Cooperation Council countries
Anas Ali Al-Qudah, Asma Houcine
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

The purpose of the study is to investigate the factors that influence the adoption of new sustainability reporting (SDG) and external assurance (EXTA) practices. This study also examines the relationship between sustainability reporting activity and corporate economic performance for a sample of 99 companies in Gulf Cooperation Council (GCC) countries that addressed SDGs in their sustainability reports published in 2019.

Using a two-stage analysis, this study examines how firms’ characteristics and corporate governance variables affect SDG and economic performance, as well as the firm’s decision to adopt EXTA statements for a sample of companies in that addressed SDGs in their sustainability reports published in 2019. The authors collected data from the Global Reporting Initiative’s (GRI) Sustainability Disclosure database and the Bureau van Dijk for Orbis database.

The results show that the variables firm size, profitability, big 4 auditors and government ownership significantly affect SDG and economic performance. The results also reveal that firms operating in the manufacturing sector are positively correlated with SDG and the firm’s decision to adopt EXTA statements. Furthermore, the results indicate that board independence positively affects SDGs and EXTA.

The results can be particularly relevant and timely in helping large GCC companies promote their engagement to sustainable development practices by adopting more sustainable long-term strategies and policies. The findings could also guide managers in the strategic direction to identify firms’ characteristics and corporate governance features essential to promote sustainability reporting, an increasingly important performance indicator for investors and to enhance their confidence in the capital market. The results may also have practical implications to policymakers and other regulators in GCC countries to define effective frameworks that promote sustainable development reports and the use of EXTA.

The results make significant contributions by providing new insights to the existing literature on sustainability reporting in emerging markets by examining a unique perspective on the influence of firms’ characteristics and corporate governance features on the adoption of new sustainability reporting practices. The authors further add to the previous literature on the relationship between a firm’s economic performance and sustainable reporting by providing evidence from large companies in GCC countries, which might benefit from the adoption of multiple conceptual lenses, in this case, legitimacy and stakeholder theories. Lastly, through the empirical findings, this study provides economic validity to the 2018 joint initiative of the GRI and the United Nations Global Compact to strengthen corporate actions to achieve the United Nations SDGs.

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Firms’ characteristics, corporate governance, and the adoption of sustainability reporting: evidence from Gulf Cooperation Council countries10.1108/JFRA-02-2023-0066Journal of Financial Reporting and Accounting2023-07-10© 2023 Emerald Publishing LimitedAnas Ali Al-QudahAsma HoucineJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-07-1010.1108/JFRA-02-2023-0066https://www.emerald.com/insight/content/doi/10.1108/JFRA-02-2023-0066/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
COVID-19 pandemic and stock market volatility spillovershttps://www.emerald.com/insight/content/doi/10.1108/JFRA-02-2023-0074/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to explore the impact of the coronavirus on the volatility spillovers of 10 selected developed markets hit by this pandemic (e.g. the USA, Canada, Korea, Japan, the UK, Germany, Italy, Spain, France and China). The database consists of daily data from January 1, 2020, to December 31, 2022. The data used are the precise daily closing prices of various indices of selected markets gathered from the DataStream and Investing.com databases. The authors use the VAR model to study the transmission of volatility between stock markets and analyze the dynamic links between them. Then, the Granger causality test is used to study the volatility movements and determine which of these markets is likely to influence the others. Then, impulse response functions are used to understand the reactions of the studied markets following shocks in the two most important markets, namely, the American and Chinese markets. Finally, forecast errors variance decomposition is used to measure the dynamic interactions that characterize the relationships between the studied markets. Empirical results reveal instability in the returns of various indexes and the existence of causal relationships between standardized volatility of markets. The reactions of some markets following a shock in American and Chinese markets differ among markets. The empirical results also show that forecast errors variance of some markets begin coming from their own innovations during first periods. These shares decrease then in favor of other markets interventions. The findings have significant practical implications for governments around the world as well as for financial investors. The successful practice of China’s pandemic prevention and control efforts may inspire governments to determine how to overcome panic and strengthen confidence in victory. Policymakers can use the insights from our study to design more effective economic policies and regulations to mitigate the negative impact of future pandemics on the financial system. Regulators can use these results to identify areas of weakness in the financial system and take proactive measures to address them. Financial investors may use the outcomes of our result to better understand the impact of global pandemics on financial markets. They may know which markets are the most active, which ones are causing considerable effects on the others and which ones show resilience and an anti-risk capacity. This may help them to make appropriate decisions about their investments. It has become imperative to estimate the impact of this pandemic on the behavior of financial markets to prevent the deterioration and dysfunction of the global financial system. The findings have important implications for financial investors and governments who should know which markets are the most shaken, which cause remarkable effects on others and which show resilience and anti-risk capacity. Countries could follow China in some measures taken to moderate the negative effects of this epidemic on national economies.COVID-19 pandemic and stock market volatility spillovers
Chiraz Ayadi, Houda Ben Said
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to explore the impact of the coronavirus on the volatility spillovers of 10 selected developed markets hit by this pandemic (e.g. the USA, Canada, Korea, Japan, the UK, Germany, Italy, Spain, France and China).

The database consists of daily data from January 1, 2020, to December 31, 2022. The data used are the precise daily closing prices of various indices of selected markets gathered from the DataStream and Investing.com databases. The authors use the VAR model to study the transmission of volatility between stock markets and analyze the dynamic links between them. Then, the Granger causality test is used to study the volatility movements and determine which of these markets is likely to influence the others. Then, impulse response functions are used to understand the reactions of the studied markets following shocks in the two most important markets, namely, the American and Chinese markets. Finally, forecast errors variance decomposition is used to measure the dynamic interactions that characterize the relationships between the studied markets.

Empirical results reveal instability in the returns of various indexes and the existence of causal relationships between standardized volatility of markets. The reactions of some markets following a shock in American and Chinese markets differ among markets. The empirical results also show that forecast errors variance of some markets begin coming from their own innovations during first periods. These shares decrease then in favor of other markets interventions.

The findings have significant practical implications for governments around the world as well as for financial investors. The successful practice of China’s pandemic prevention and control efforts may inspire governments to determine how to overcome panic and strengthen confidence in victory. Policymakers can use the insights from our study to design more effective economic policies and regulations to mitigate the negative impact of future pandemics on the financial system. Regulators can use these results to identify areas of weakness in the financial system and take proactive measures to address them. Financial investors may use the outcomes of our result to better understand the impact of global pandemics on financial markets. They may know which markets are the most active, which ones are causing considerable effects on the others and which ones show resilience and an anti-risk capacity. This may help them to make appropriate decisions about their investments.

It has become imperative to estimate the impact of this pandemic on the behavior of financial markets to prevent the deterioration and dysfunction of the global financial system. The findings have important implications for financial investors and governments who should know which markets are the most shaken, which cause remarkable effects on others and which show resilience and anti-risk capacity. Countries could follow China in some measures taken to moderate the negative effects of this epidemic on national economies.

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COVID-19 pandemic and stock market volatility spillovers10.1108/JFRA-02-2023-0074Journal of Financial Reporting and Accounting2023-10-11© 2023 Emerald Publishing LimitedChiraz AyadiHouda Ben SaidJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-10-1110.1108/JFRA-02-2023-0074https://www.emerald.com/insight/content/doi/10.1108/JFRA-02-2023-0074/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Relative informative power and stock return predictability: a new perspective from Egypthttps://www.emerald.com/insight/content/doi/10.1108/JFRA-02-2023-0076/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to introduce a new perspective on long-term stock return predictability by focusing on the relative (individual and hybrid) informative power of a wide range of accounting (firm-related), technical and macroeconomic factors while considering the past performance of the stocks using machine learning algorithms. The sample includes a panel data set of 94 non-financial firms listed in Egyptian Exchange 100 index from 2014: Q1 to 2019: Q4. Relativity has been investigated by comparing relevant factors’ individual and combined informative power and differentiating between losers and winners based on historical stock returns. To predict the quarterly stock returns, Gaussian process regression (GPR) has been used. The robustness of the results is examined through the out-of-sample test. This study also uses linear regression (LR) as a benchmark model. The past performance and the presence of other predictors influence the informative power of relevant factors and hence their predictive ability. The out-of-sample results show a trade-off between GPR and LR with proven superiority to GPR in limited experiments. The individual informative power outperforms the hybrid power, in which macroeconomic indicators outperform the remaining sets of indicators for losers, while winners show mixed results in terms of various performance evaluation metrics. Prediction accuracy is generally higher for losers than for winners. This study provides interesting insight into the dynamic nature of the predictor variables in terms of stock return predictability. Hence, this study also deepens the understanding of asset pricing in a way that directly contributes to practitioners’ portfolio diversification strategies. In concern of the chaos of factors in the literature and its accompanying misleading conclusions, this study takes another look at the approach that studies stock return predictability. To the best of the authors’ knowledge, this is the first study in the Egyptian context that re-examines the predictive power of the previously discovered factors from a different perspective that highlights their relative nature.Relative informative power and stock return predictability: a new perspective from Egypt
Enas Hendawy, David G. McMillan, Zaki M. Sakr, Tamer Mohamed Shahwan
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to introduce a new perspective on long-term stock return predictability by focusing on the relative (individual and hybrid) informative power of a wide range of accounting (firm-related), technical and macroeconomic factors while considering the past performance of the stocks using machine learning algorithms.

The sample includes a panel data set of 94 non-financial firms listed in Egyptian Exchange 100 index from 2014: Q1 to 2019: Q4. Relativity has been investigated by comparing relevant factors’ individual and combined informative power and differentiating between losers and winners based on historical stock returns. To predict the quarterly stock returns, Gaussian process regression (GPR) has been used. The robustness of the results is examined through the out-of-sample test. This study also uses linear regression (LR) as a benchmark model.

The past performance and the presence of other predictors influence the informative power of relevant factors and hence their predictive ability. The out-of-sample results show a trade-off between GPR and LR with proven superiority to GPR in limited experiments. The individual informative power outperforms the hybrid power, in which macroeconomic indicators outperform the remaining sets of indicators for losers, while winners show mixed results in terms of various performance evaluation metrics. Prediction accuracy is generally higher for losers than for winners.

This study provides interesting insight into the dynamic nature of the predictor variables in terms of stock return predictability. Hence, this study also deepens the understanding of asset pricing in a way that directly contributes to practitioners’ portfolio diversification strategies.

In concern of the chaos of factors in the literature and its accompanying misleading conclusions, this study takes another look at the approach that studies stock return predictability. To the best of the authors’ knowledge, this is the first study in the Egyptian context that re-examines the predictive power of the previously discovered factors from a different perspective that highlights their relative nature.

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Relative informative power and stock return predictability: a new perspective from Egypt10.1108/JFRA-02-2023-0076Journal of Financial Reporting and Accounting2023-08-18© 2023 Emerald Publishing LimitedEnas HendawyDavid G. McMillanZaki M. SakrTamer Mohamed ShahwanJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-08-1810.1108/JFRA-02-2023-0076https://www.emerald.com/insight/content/doi/10.1108/JFRA-02-2023-0076/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Climate-related corporate reporting and cost of equity capitalhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-02-2023-0078/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to examine the reaction of stakeholders (i.e. capital providers) to climate-related corporate reporting. Climate-related corporate reporting is captured by the level of voluntary carbon disclosure, while the recognition and appreciation of capital providers are captured through the cost of equity capital (COE). This study uses a sample including the 350 largest companies by market capitalization on the London Stock Exchange, UK (FTSE350) from 2015 to 2019. The authors use fixed-effects regression models to examine the effect of climate-related corporate reporting on the COE. This study finds that voluntary carbon disclosure proxied by carbon disclosure score is negatively associated with COE. This suggests that firms’ superior quality disclosure of carbon information could contribute to a lower COE. This implies that the market and stakeholders positively appreciate the involvement in climate-related reporting by businesses. The finding provides insights to regulators, investors and other stakeholders in terms of the positive economic implication of actively engaging in reducing climate change impact through voluntary carbon disclosure. These findings also motivate corporates to be proactively involved in climate-related reporting by extending the quality of carbon information disclosure.Climate-related corporate reporting and cost of equity capital
Tam Huy Nguyen, Yue Yang, Thi Hong Thuy Nguyen, Lien Thi Huong Nguyen
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to examine the reaction of stakeholders (i.e. capital providers) to climate-related corporate reporting. Climate-related corporate reporting is captured by the level of voluntary carbon disclosure, while the recognition and appreciation of capital providers are captured through the cost of equity capital (COE).

This study uses a sample including the 350 largest companies by market capitalization on the London Stock Exchange, UK (FTSE350) from 2015 to 2019. The authors use fixed-effects regression models to examine the effect of climate-related corporate reporting on the COE.

This study finds that voluntary carbon disclosure proxied by carbon disclosure score is negatively associated with COE. This suggests that firms’ superior quality disclosure of carbon information could contribute to a lower COE. This implies that the market and stakeholders positively appreciate the involvement in climate-related reporting by businesses.

The finding provides insights to regulators, investors and other stakeholders in terms of the positive economic implication of actively engaging in reducing climate change impact through voluntary carbon disclosure. These findings also motivate corporates to be proactively involved in climate-related reporting by extending the quality of carbon information disclosure.

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Climate-related corporate reporting and cost of equity capital10.1108/JFRA-02-2023-0078Journal of Financial Reporting and Accounting2023-07-18© 2023 Emerald Publishing LimitedTam Huy NguyenYue YangThi Hong Thuy NguyenLien Thi Huong NguyenJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-07-1810.1108/JFRA-02-2023-0078https://www.emerald.com/insight/content/doi/10.1108/JFRA-02-2023-0078/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
CEO busyness and investment efficiency: evidence from Indonesiahttps://www.emerald.com/insight/content/doi/10.1108/JFRA-02-2023-0083/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to explore the relationship between the level of busyness of Chief Executive Officers (CEOs) and investment efficiency in the context of emerging markets. The sample includes firms listed on the Indonesia Stock Exchange from 2010 to 2018 using ordinary least square estimation. The findings suggest that companies led by busy CEOs tend to exhibit lower investment efficiency, thus providing support for the hypothesis that as CEOs’ commitments increase, their ability to concentrate on the company diminishes. Furthermore, our analysis reveals that companies with busy CEOs tend to demonstrate a greater tendency to over-invest, potentially in response to market pressures to showcase strong performance. A more in-depth examination of the data shows that the negative impact of busy CEOs on investment efficiency is especially noticeable in firms lacking risk and management committees (RMC). These findings have substantial practical implications for the structuring and composition of corporate boards. They highlight the significance of conducting comprehensive assessments to gain insights into the external commitments of incoming CEOs. This study underscores the importance of establishing RMC.CEO busyness and investment efficiency: evidence from Indonesia
Iman Harymawan, Nadia Klarita Rahayu, Khairul Anuar Kamarudin, Wan Adibah Wan Ismail, Melinda Cahyaning Ratri
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to explore the relationship between the level of busyness of Chief Executive Officers (CEOs) and investment efficiency in the context of emerging markets.

The sample includes firms listed on the Indonesia Stock Exchange from 2010 to 2018 using ordinary least square estimation.

The findings suggest that companies led by busy CEOs tend to exhibit lower investment efficiency, thus providing support for the hypothesis that as CEOs’ commitments increase, their ability to concentrate on the company diminishes. Furthermore, our analysis reveals that companies with busy CEOs tend to demonstrate a greater tendency to over-invest, potentially in response to market pressures to showcase strong performance. A more in-depth examination of the data shows that the negative impact of busy CEOs on investment efficiency is especially noticeable in firms lacking risk and management committees (RMC).

These findings have substantial practical implications for the structuring and composition of corporate boards. They highlight the significance of conducting comprehensive assessments to gain insights into the external commitments of incoming CEOs.

This study underscores the importance of establishing RMC.

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CEO busyness and investment efficiency: evidence from Indonesia10.1108/JFRA-02-2023-0083Journal of Financial Reporting and Accounting2023-11-27© 2023 Emerald Publishing LimitedIman HarymawanNadia Klarita RahayuKhairul Anuar KamarudinWan Adibah Wan IsmailMelinda Cahyaning RatriJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-11-2710.1108/JFRA-02-2023-0083https://www.emerald.com/insight/content/doi/10.1108/JFRA-02-2023-0083/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Risk and performance disclosure during the Covid-19 pandemic: does ownership structure matter?https://www.emerald.com/insight/content/doi/10.1108/JFRA-02-2023-0094/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to investigate whether risk-related information is associated with a higher level of performance disclosure (PerfD) in the annual reports during the Covid-19 pandemic. Additionally, this paper assesses if ownership structure plays a moderating effect on the relationship between RD and PerfD. A content analysis technique to measure the risk information and PerfD for 72 listed firms in the Abu Dhabi stock exchange and Dubai financial market for the period 2019–2021. The authors find a significant correlation between risk disclosure and PerfD. Indeed, managers use annual reports to send a signal to the market about their abilities and skills in managing high-risk situations by disclosing more performance-related information accompanying any communicated related risk information. Besides, our results report that before the pandemic, only government ownership had a significant effect on the level of disclosure of performance-related information. However, during the pandemic, foreign ownership also played an important role to improve firm transparency. In addition, during the pandemic, Big 4 audit firms have effective quality control, and auditors would play an important role in improving the quality of disclosure. Besides, leveraged firms report more performance-related information. A high level of PerfD may play a critical role in mitigating debtholders’ concerns about firm’ ability to manage the pandemic situation and generate enough cash flows in the future to pay their debts. This paper’s findings are highly relevant to financial reporting’ users, mainly shareholders, as they will be aware about management behaviors during the crisis and how firms are engaged in disclosure. Besides, this paper’s findings may be useful for market regulators to reinforce the role of audit quality to maintain good reporting, especially in crisis circumstances. In addition, regulators may benefit from the findings through the optimization of the ownership structure (dispersed ownership), which helps to promote transparency and disclosure.Risk and performance disclosure during the Covid-19 pandemic: does ownership structure matter?
Rihab Grassa, Mohammad Alhashmi, Rashed Rafeea
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to investigate whether risk-related information is associated with a higher level of performance disclosure (PerfD) in the annual reports during the Covid-19 pandemic. Additionally, this paper assesses if ownership structure plays a moderating effect on the relationship between RD and PerfD.

A content analysis technique to measure the risk information and PerfD for 72 listed firms in the Abu Dhabi stock exchange and Dubai financial market for the period 2019–2021.

The authors find a significant correlation between risk disclosure and PerfD. Indeed, managers use annual reports to send a signal to the market about their abilities and skills in managing high-risk situations by disclosing more performance-related information accompanying any communicated related risk information. Besides, our results report that before the pandemic, only government ownership had a significant effect on the level of disclosure of performance-related information. However, during the pandemic, foreign ownership also played an important role to improve firm transparency. In addition, during the pandemic, Big 4 audit firms have effective quality control, and auditors would play an important role in improving the quality of disclosure. Besides, leveraged firms report more performance-related information. A high level of PerfD may play a critical role in mitigating debtholders’ concerns about firm’ ability to manage the pandemic situation and generate enough cash flows in the future to pay their debts.

This paper’s findings are highly relevant to financial reporting’ users, mainly shareholders, as they will be aware about management behaviors during the crisis and how firms are engaged in disclosure. Besides, this paper’s findings may be useful for market regulators to reinforce the role of audit quality to maintain good reporting, especially in crisis circumstances. In addition, regulators may benefit from the findings through the optimization of the ownership structure (dispersed ownership), which helps to promote transparency and disclosure.

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Risk and performance disclosure during the Covid-19 pandemic: does ownership structure matter?10.1108/JFRA-02-2023-0094Journal of Financial Reporting and Accounting2023-08-29© 2023 Emerald Publishing LimitedRihab GrassaMohammad AlhashmiRashed RafeeaJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-08-2910.1108/JFRA-02-2023-0094https://www.emerald.com/insight/content/doi/10.1108/JFRA-02-2023-0094/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Eyeballing internal auditors’ and the firms’ intention to adopt Metaverse technologies: case study in Indonesiahttps://www.emerald.com/insight/content/doi/10.1108/JFRA-02-2023-0096/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to give broad insights into what components can significantly influence the adoption of Metaverse from the perspective of internal auditors and their firms in Indonesia. This research used primary data from questionnaires. Relying on the empirical view of 202 internal auditors in Indonesia, this research’s framework is executed using structural equation model. Company’s intention in adopting the Metaverse technology intervenes in the influence of perception of external control and usefulness on the internal auditor’s intention to adopt that technology. The perception of external control and perceived usefulness of Metaverse significantly influenced the adoption intention of Metaverse by internal auditors and their firms in Indonesia. This paper is helpful for practitioners who would like to know what factors are needed to make the internal auditors in Indonesia able to adopt Metaverse. Results might be varied from country to country as each country has different technology development. Therefore, upcoming research can compare similar studies in another country. This paper can contribute to further empirical development for the theory of acceptance model of the third version. Many researchers use the theory to study advanced technology adoption intention. The paper is also essential for future research and could enhance companies' knowledge about staying updated in the market with the advanced technology that keeps developing. This paper contributes to an integrated view of the intention of internal auditors and firms in Indonesia to adopt Metaverse. To the best of the authors’ knowledge, this topic is relatively new in Indonesia.Eyeballing internal auditors’ and the firms’ intention to adopt Metaverse technologies: case study in Indonesia
Saarce Elsye Hatane, Livia Sondak, Josua Tarigan, Hendri Kwistianus, Sany Sany
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to give broad insights into what components can significantly influence the adoption of Metaverse from the perspective of internal auditors and their firms in Indonesia.

This research used primary data from questionnaires. Relying on the empirical view of 202 internal auditors in Indonesia, this research’s framework is executed using structural equation model. Company’s intention in adopting the Metaverse technology intervenes in the influence of perception of external control and usefulness on the internal auditor’s intention to adopt that technology.

The perception of external control and perceived usefulness of Metaverse significantly influenced the adoption intention of Metaverse by internal auditors and their firms in Indonesia. This paper is helpful for practitioners who would like to know what factors are needed to make the internal auditors in Indonesia able to adopt Metaverse.

Results might be varied from country to country as each country has different technology development. Therefore, upcoming research can compare similar studies in another country. This paper can contribute to further empirical development for the theory of acceptance model of the third version. Many researchers use the theory to study advanced technology adoption intention.

The paper is also essential for future research and could enhance companies' knowledge about staying updated in the market with the advanced technology that keeps developing.

This paper contributes to an integrated view of the intention of internal auditors and firms in Indonesia to adopt Metaverse. To the best of the authors’ knowledge, this topic is relatively new in Indonesia.

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Eyeballing internal auditors’ and the firms’ intention to adopt Metaverse technologies: case study in Indonesia10.1108/JFRA-02-2023-0096Journal of Financial Reporting and Accounting2023-07-20© 2023 Emerald Publishing LimitedSaarce Elsye HataneLivia SondakJosua TariganHendri KwistianusSany SanyJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-07-2010.1108/JFRA-02-2023-0096https://www.emerald.com/insight/content/doi/10.1108/JFRA-02-2023-0096/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Implications of sustainability reporting and institutional investors’ ownership for external audit work: evidence from Saudi Arabiahttps://www.emerald.com/insight/content/doi/10.1108/JFRA-02-2023-0097/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to assess whether non-financial corporate social responsibility (CSR) information decreases audit risk and audit scope and enables speedier completion of audit reports. The study also investigates whether institutional investors’ ownership (IIO) has an influence on the association between CSR disclosures and audit report lag (ARL). This study uses a sample of 154 Saudi firms over 2016–2021 (837 observations) and applies ordinary least square regression to examine the study hypotheses. This study’s results show that ARL is significantly shorter for firms with higher CSR disclosures. Furthermore, the findings show that IIO has no significant impact on the association between CSR disclosures and ARL. This study offers new insights into how auditors respond to CSR disclosures and whether institutional investor monitoring influences the audit process in an emerging economy.Implications of sustainability reporting and institutional investors’ ownership for external audit work: evidence from Saudi Arabia
Ameen Qasem, Wan Nordin Wan-Hussin, Adel Ali Al-Qadasi, Belal Ali Abdulraheem Ghaleb, Hasan Mohamad Bamahros
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to assess whether non-financial corporate social responsibility (CSR) information decreases audit risk and audit scope and enables speedier completion of audit reports. The study also investigates whether institutional investors’ ownership (IIO) has an influence on the association between CSR disclosures and audit report lag (ARL).

This study uses a sample of 154 Saudi firms over 2016–2021 (837 observations) and applies ordinary least square regression to examine the study hypotheses.

This study’s results show that ARL is significantly shorter for firms with higher CSR disclosures. Furthermore, the findings show that IIO has no significant impact on the association between CSR disclosures and ARL.

This study offers new insights into how auditors respond to CSR disclosures and whether institutional investor monitoring influences the audit process in an emerging economy.

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Implications of sustainability reporting and institutional investors’ ownership for external audit work: evidence from Saudi Arabia10.1108/JFRA-02-2023-0097Journal of Financial Reporting and Accounting2023-07-31© 2023 Emerald Publishing LimitedAmeen QasemWan Nordin Wan-HussinAdel Ali Al-QadasiBelal Ali Abdulraheem GhalebHasan Mohamad BamahrosJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-07-3110.1108/JFRA-02-2023-0097https://www.emerald.com/insight/content/doi/10.1108/JFRA-02-2023-0097/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Preventing financial statement fraud in the corporate sector: insights from auditorshttps://www.emerald.com/insight/content/doi/10.1108/JFRA-02-2023-0101/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to examine how auditors perceive the influence of crucial fraud prevention factors in deterring financial statement fraud within the corporate sector. Additionally, this research explores the mediating effect of fraud awareness in elucidating the impact of ethical leadership and internal control systems on preventing financial statement fraud. The study used an online survey, targeting a sample of 141 professionally qualified auditors with at least one year of practical experience in the field. The researchers used “Structural Equation Modeling (SEM)” to examine relationships between latent variables using partial least squares structural equation modeling. The study investigated the impact of whistleblowing systems, fraud awareness, ethical leadership, internal control systems and corporate governance on fraud prevention. This research finding provides evidence to the corporate sector by establishing the significance of fraud awareness as the most influencing factor in preventing financial statement fraud. Furthermore, the combined explanatory variables account for 77.4% of the overall variance in financial statement fraud prevention. The study reveals a partial mediation effect of fraud awareness on the relationship between the internal control system and financial statement fraud prevention. This research finding may assist in developing an effective fraud prevention programme to mitigate fraud instances and improve financial reporting quality. In the corporate sector, each organisation should clearly specify the policies on whistleblowing systems, fraud awareness training, internal control systems and corporate governance. To foster a comprehensive fraud prevention programme, the leaders should enforce these policies with employee support. This research integrated crucial elements to develop a new theoretical framework for investigating financial statement fraud prevention within the corporate context. Accordingly, this research framework provides a more in-depth explanation of preventing financial statement fraud from an auditor’s perspective. Additionally, this research is the first to explore the mediating role of fraud awareness in influencing the effectiveness of the internal control system in preventing financial statement fraud.Preventing financial statement fraud in the corporate sector: insights from auditors
Abinash Mandal, Amilan S
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to examine how auditors perceive the influence of crucial fraud prevention factors in deterring financial statement fraud within the corporate sector. Additionally, this research explores the mediating effect of fraud awareness in elucidating the impact of ethical leadership and internal control systems on preventing financial statement fraud.

The study used an online survey, targeting a sample of 141 professionally qualified auditors with at least one year of practical experience in the field. The researchers used “Structural Equation Modeling (SEM)” to examine relationships between latent variables using partial least squares structural equation modeling. The study investigated the impact of whistleblowing systems, fraud awareness, ethical leadership, internal control systems and corporate governance on fraud prevention.

This research finding provides evidence to the corporate sector by establishing the significance of fraud awareness as the most influencing factor in preventing financial statement fraud. Furthermore, the combined explanatory variables account for 77.4% of the overall variance in financial statement fraud prevention. The study reveals a partial mediation effect of fraud awareness on the relationship between the internal control system and financial statement fraud prevention.

This research finding may assist in developing an effective fraud prevention programme to mitigate fraud instances and improve financial reporting quality. In the corporate sector, each organisation should clearly specify the policies on whistleblowing systems, fraud awareness training, internal control systems and corporate governance. To foster a comprehensive fraud prevention programme, the leaders should enforce these policies with employee support.

This research integrated crucial elements to develop a new theoretical framework for investigating financial statement fraud prevention within the corporate context. Accordingly, this research framework provides a more in-depth explanation of preventing financial statement fraud from an auditor’s perspective. Additionally, this research is the first to explore the mediating role of fraud awareness in influencing the effectiveness of the internal control system in preventing financial statement fraud.

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Preventing financial statement fraud in the corporate sector: insights from auditors10.1108/JFRA-02-2023-0101Journal of Financial Reporting and Accounting2023-09-11© 2023 Emerald Publishing LimitedAbinash MandalAmilan SJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-09-1110.1108/JFRA-02-2023-0101https://www.emerald.com/insight/content/doi/10.1108/JFRA-02-2023-0101/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Does information asymmetry mediate the relationship between voluntary disclosure and cost of capital? Evidence from a developing economyhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-02-2023-0103/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to investigate the relationship between voluntary disclosure and the cost of capital as a direct relationship and as an indirect relationship mediated by information asymmetry. It provides evidence from Jordan as a developing economy. The sample was selected from the companies listed in the first market of the Amman Stock Exchange during the period 2010–2019. Four exclusion criteria were used in selecting the companies for analysis. The findings show that the cost of capital and information asymmetry are negatively affected by voluntary disclosure, as well as that the cost of capital is positively affected by information asymmetry. In addition, information asymmetry does not mediate the relationship between voluntary disclosure and the cost of capital. This research looks at the mediating effect of information asymmetry in the relationship between voluntary disclosure and the cost of capital; thus, it provides new explanations about it using empirical evidence from a developing economy. As a necessary consequence, this research has the potential to significantly contribute to the existing body of knowledge and literature in this field.Does information asymmetry mediate the relationship between voluntary disclosure and cost of capital? Evidence from a developing economy
Malik Muneer Abu Afifa, Mustafa Saadeh
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to investigate the relationship between voluntary disclosure and the cost of capital as a direct relationship and as an indirect relationship mediated by information asymmetry. It provides evidence from Jordan as a developing economy.

The sample was selected from the companies listed in the first market of the Amman Stock Exchange during the period 2010–2019. Four exclusion criteria were used in selecting the companies for analysis.

The findings show that the cost of capital and information asymmetry are negatively affected by voluntary disclosure, as well as that the cost of capital is positively affected by information asymmetry. In addition, information asymmetry does not mediate the relationship between voluntary disclosure and the cost of capital.

This research looks at the mediating effect of information asymmetry in the relationship between voluntary disclosure and the cost of capital; thus, it provides new explanations about it using empirical evidence from a developing economy. As a necessary consequence, this research has the potential to significantly contribute to the existing body of knowledge and literature in this field.

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Does information asymmetry mediate the relationship between voluntary disclosure and cost of capital? Evidence from a developing economy10.1108/JFRA-02-2023-0103Journal of Financial Reporting and Accounting2023-08-16© 2023 Emerald Publishing LimitedMalik Muneer Abu AfifaMustafa SaadehJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-08-1610.1108/JFRA-02-2023-0103https://www.emerald.com/insight/content/doi/10.1108/JFRA-02-2023-0103/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Forensic accounting research around the worldhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-02-2023-0106/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to review the relevant forensic accounting research (FAR) around the world and suggests avenues for future research in forensic accounting. The study used the thematic and systematic literature review methodology to analyse the existing literature in FAR. The major thematic areas in the literature are fraud motivation, fraud consequences, fraud detection using forensic accounting techniques, forensic accounting theory, forensic accounting skills, forensic accounting education and forensic accounting jobs. The quantity of FAR is relatively small compared to the quantity of research in other accounting specializations. FAR is well developed in the USA and Canada and is less developed in Europe, Oceania and Asia. There is high interest in FAR in African countries. There is a relatively low global interest in internet information about “forensic accounting research” compared to global interest in other forensic accounting topics. Areas for future research include the role of the environment, digitalization, religiosity and sustainable development in forensic accounting. FAR around the world is lopsided, as some regions have more advanced FAR compared to other regions. There is a need for even development of FAR across all regions and a need to publicize the outputs of FAR to a larger audience to increase people’s interest in forensic accounting. The study extends the literature by presenting a rigorous thematic and systematic review of the existing literature. It highlights the depth of FAR, the major thematic areas, the benefits of FAR to society and the geographical reach of existing FAR.Forensic accounting research around the world
Peterson K. Ozili
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to review the relevant forensic accounting research (FAR) around the world and suggests avenues for future research in forensic accounting.

The study used the thematic and systematic literature review methodology to analyse the existing literature in FAR.

The major thematic areas in the literature are fraud motivation, fraud consequences, fraud detection using forensic accounting techniques, forensic accounting theory, forensic accounting skills, forensic accounting education and forensic accounting jobs. The quantity of FAR is relatively small compared to the quantity of research in other accounting specializations. FAR is well developed in the USA and Canada and is less developed in Europe, Oceania and Asia. There is high interest in FAR in African countries. There is a relatively low global interest in internet information about “forensic accounting research” compared to global interest in other forensic accounting topics. Areas for future research include the role of the environment, digitalization, religiosity and sustainable development in forensic accounting.

FAR around the world is lopsided, as some regions have more advanced FAR compared to other regions. There is a need for even development of FAR across all regions and a need to publicize the outputs of FAR to a larger audience to increase people’s interest in forensic accounting.

The study extends the literature by presenting a rigorous thematic and systematic review of the existing literature. It highlights the depth of FAR, the major thematic areas, the benefits of FAR to society and the geographical reach of existing FAR.

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Forensic accounting research around the world10.1108/JFRA-02-2023-0106Journal of Financial Reporting and Accounting2023-09-14© 2023 Emerald Publishing LimitedPeterson K. OziliJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-09-1410.1108/JFRA-02-2023-0106https://www.emerald.com/insight/content/doi/10.1108/JFRA-02-2023-0106/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Financial signaling mechanism in investor response to corporate donation disclosure: the moderating role of historical earnings trendshttps://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2022-0081/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestCorporate donation behavior sends two financial-related signals, i.e. sufficient cash flow and self-confidence in future earnings. This paper aims to investigate whether these financial-related signals released by corporate donation drive investors to make more optimistic forecasts about the firm’s future earnings per share (EPS) and whether this effect varies across different historical earnings trends. This study is based on a controlled online experiment with 553 MBA students. The results demonstrate that a financial signaling mechanism works, but it is moderated by historical earnings trends. When the earnings trend is always increasing, the more the number of financial signals received, the higher the investors’ EPS forecast; when the earnings trend is fluctuating (down then up or up then down), investors’ EPS forecast is higher when they receive financial signal(s) than when they do not, but no additive effect occurs from receiving one signal to two signals; when the earnings trend is always decreasing, investors’ EPS forecast is irrelevant to the number of financial signals received. To the best of the authors’ knowledge, this study is the first to experimentally investigate a possible mechanism to explain investors’ positive response to corporate social responsibility (CSR) (specifically, corporate donation) disclosures – the financial signaling mechanism. This study also extends the research on the impact of financial information on investors’ use of nonfinancial information by investigating the moderating role of historical earnings trends on the financial signaling mechanism of the CSR effect.Financial signaling mechanism in investor response to corporate donation disclosure: the moderating role of historical earnings trends
Naiding Yang, Ye Chen
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

Corporate donation behavior sends two financial-related signals, i.e. sufficient cash flow and self-confidence in future earnings. This paper aims to investigate whether these financial-related signals released by corporate donation drive investors to make more optimistic forecasts about the firm’s future earnings per share (EPS) and whether this effect varies across different historical earnings trends.

This study is based on a controlled online experiment with 553 MBA students.

The results demonstrate that a financial signaling mechanism works, but it is moderated by historical earnings trends. When the earnings trend is always increasing, the more the number of financial signals received, the higher the investors’ EPS forecast; when the earnings trend is fluctuating (down then up or up then down), investors’ EPS forecast is higher when they receive financial signal(s) than when they do not, but no additive effect occurs from receiving one signal to two signals; when the earnings trend is always decreasing, investors’ EPS forecast is irrelevant to the number of financial signals received.

To the best of the authors’ knowledge, this study is the first to experimentally investigate a possible mechanism to explain investors’ positive response to corporate social responsibility (CSR) (specifically, corporate donation) disclosures – the financial signaling mechanism. This study also extends the research on the impact of financial information on investors’ use of nonfinancial information by investigating the moderating role of historical earnings trends on the financial signaling mechanism of the CSR effect.

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Financial signaling mechanism in investor response to corporate donation disclosure: the moderating role of historical earnings trends10.1108/JFRA-03-2022-0081Journal of Financial Reporting and Accounting2022-12-21© 2022 Emerald Publishing LimitedNaiding YangYe ChenJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-12-2110.1108/JFRA-03-2022-0081https://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2022-0081/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
Determinants and consequences of integrated reporting disclosures of non-financial listed firms in an emerging economyhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2022-0083/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to examine the determinants and consequences of integrated reporting (IR) disclosures of listed non-financial firms in an emerging economy. This study uses data from 39 listed non-financial firms that had adopted IR disclosure framework in Sri Lanka for the period from 2011 to 2018. Firm size, growth opportunity, profitability and firm age are considered significant determinants of IR disclosure, while their consequences are measured in terms of share price, Tobin’s Q, return on assets and return on equity. The authors used the results of the correlation and panel regression analyses to draw this study’s conclusions. This study finds that firm size and age are the significant determinants of IR disclosure, which is consistent with this study’s expectations. Considering the consequences of IR disclosure, only share price and Tobin’s Q show significant results as per the panel regression analyses. The findings of this study would be useful in the decision-making processes of existing and prospective investors, regulators, policymakers and society at large. Further, the findings of this study communicate the benefits of this new reporting paradigm in shaping their disclosures in the annual corporate reporting process. Although existing studies attempted to examine the determinants of IR disclosure and its consequences as isolated studies, this study provides new insights by merging these two aspects into a single study and consider several determinants and consequences as well.Determinants and consequences of integrated reporting disclosures of non-financial listed firms in an emerging economy
K.G.P. Senani, Roshan Ajward, J.S. Kumari
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to examine the determinants and consequences of integrated reporting (IR) disclosures of listed non-financial firms in an emerging economy.

This study uses data from 39 listed non-financial firms that had adopted IR disclosure framework in Sri Lanka for the period from 2011 to 2018. Firm size, growth opportunity, profitability and firm age are considered significant determinants of IR disclosure, while their consequences are measured in terms of share price, Tobin’s Q, return on assets and return on equity. The authors used the results of the correlation and panel regression analyses to draw this study’s conclusions.

This study finds that firm size and age are the significant determinants of IR disclosure, which is consistent with this study’s expectations. Considering the consequences of IR disclosure, only share price and Tobin’s Q show significant results as per the panel regression analyses.

The findings of this study would be useful in the decision-making processes of existing and prospective investors, regulators, policymakers and society at large. Further, the findings of this study communicate the benefits of this new reporting paradigm in shaping their disclosures in the annual corporate reporting process.

Although existing studies attempted to examine the determinants of IR disclosure and its consequences as isolated studies, this study provides new insights by merging these two aspects into a single study and consider several determinants and consequences as well.

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Determinants and consequences of integrated reporting disclosures of non-financial listed firms in an emerging economy10.1108/JFRA-03-2022-0083Journal of Financial Reporting and Accounting2022-09-14© 2022 Emerald Publishing LimitedK.G.P. SenaniRoshan AjwardJ.S. KumariJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-09-1410.1108/JFRA-03-2022-0083https://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2022-0083/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
Investment deviation from the optimal path: does the examination of audit quality services matter? A French studyhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2023-0109/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe study of the relationship between external auditing services and investment deviation in a French setting has received relatively little research attention thus far. There are insufficient indicators to measure audit quality and then have a measurable link to investment efficiency. This study is motivated by such a research gap as well as the important role of auditing services in assuring investment efficiency. The purpose of this study is to test whether a good audit quality service improves corporate investment awareness in French-listed companies and contributes to establishing a comprehensive analysis framework for inefficient investment and how audit services have become an important tool to reduce the investment deviation of listed companies in France. Based on a sample of 89 non-financial French firms listed on the Stoxx 600 Index from 2015 to 2021, this study uses feasible generalised least squares (FGLS) regressions to study the relationship between investment deviation and auditing service quality. After running an FGLS regression model for two firm groups (overinvestment and overinvestment groups) and testing for a set of control variables, especially COVID-19, the findings show a non-linear correlation between audit service and corporate investment deviation. Both underinvestment and overinvestment decisions are negatively and statistically significantly impacted by audit indicators. Furthermore, involving a high-quality specialised auditor may enhance overall monitoring and lead to a lower investment deviation level. Overall, the empirical results show that a high-quality audit service enhances the investment efficiency of French-indexed companies. This study offers crucial information that audit regulators can use to better appreciate the advantages of high audit quality and to take seriously the policy issues that affect it. Board members are urged to provide excellent audit quality that improves investment efficiency with careful consideration. This study contributes to the existing audit literature by illuminating the effect of audit quality services on investment deviation to show a deeper understanding of the factors that contribute to the differences in prior studies’ findings in the field of audit quality impacts.Investment deviation from the optimal path: does the examination of audit quality services matter? A French study
Amel Kouaib, Isabelle Lacombe, Anis Jarboui
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

The study of the relationship between external auditing services and investment deviation in a French setting has received relatively little research attention thus far. There are insufficient indicators to measure audit quality and then have a measurable link to investment efficiency. This study is motivated by such a research gap as well as the important role of auditing services in assuring investment efficiency. The purpose of this study is to test whether a good audit quality service improves corporate investment awareness in French-listed companies and contributes to establishing a comprehensive analysis framework for inefficient investment and how audit services have become an important tool to reduce the investment deviation of listed companies in France.

Based on a sample of 89 non-financial French firms listed on the Stoxx 600 Index from 2015 to 2021, this study uses feasible generalised least squares (FGLS) regressions to study the relationship between investment deviation and auditing service quality.

After running an FGLS regression model for two firm groups (overinvestment and overinvestment groups) and testing for a set of control variables, especially COVID-19, the findings show a non-linear correlation between audit service and corporate investment deviation. Both underinvestment and overinvestment decisions are negatively and statistically significantly impacted by audit indicators. Furthermore, involving a high-quality specialised auditor may enhance overall monitoring and lead to a lower investment deviation level. Overall, the empirical results show that a high-quality audit service enhances the investment efficiency of French-indexed companies.

This study offers crucial information that audit regulators can use to better appreciate the advantages of high audit quality and to take seriously the policy issues that affect it. Board members are urged to provide excellent audit quality that improves investment efficiency with careful consideration.

This study contributes to the existing audit literature by illuminating the effect of audit quality services on investment deviation to show a deeper understanding of the factors that contribute to the differences in prior studies’ findings in the field of audit quality impacts.

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Investment deviation from the optimal path: does the examination of audit quality services matter? A French study10.1108/JFRA-03-2023-0109Journal of Financial Reporting and Accounting2023-12-25© 2023 Emerald Publishing LimitedAmel KouaibIsabelle LacombeAnis JarbouiJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-12-2510.1108/JFRA-03-2023-0109https://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2023-0109/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Organizational complexity and audit report lag in GCC economies: the moderating role of audit qualityhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2023-0113/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to investigate whether organizational complexity (hereafter firm complexity) increases audit report lag (ARL) in a unique environment of GCC countries. The research study uses a panel data set of 6,084 firm-year observations of nonfinancial firms from GCC economies from 2009 to 2022. First, the study uses an ordinary least square estimator to examine the association of firm complexity with ARL. Second, for robustness purposes, the study applies the propensity score matching technique. This research study finds that the firms’ complexity increases ARL. Supporting the argument that auditors respond to firm complexity with increased effort, the authors find a positive relation of firm complexity with ARL. This relationship is augmented by auditor change, auditors’ tenure, auditor-qualified opinion and adoption of IFRS. In addition, the authors also find that Big-4 and audit firm industry specialization curtail the positive impact of firm complexity on ARL. Firms in the GCC have less time to complete their audit and complex firms are likelier to have bigger ARLs. This study provided evidence regarding the curtailing effect of audit quality in GCC. Our findings suggest policymakers and reformers choose improved audit quality to reduce the possibility of larger ARL. This study enriches the scholarship by presenting a mechanism for reducing the ARL of complex firms through higher audit quality. This study contributes to agency theory by emphasizing audit quality’s important role in emerging markets.Organizational complexity and audit report lag in GCC economies: the moderating role of audit quality
Faisal Khan, Mohamad Ali Bin Abdul-Hamid, Saidatunur Fauzi Saidin, Shatha Hussain
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to investigate whether organizational complexity (hereafter firm complexity) increases audit report lag (ARL) in a unique environment of GCC countries.

The research study uses a panel data set of 6,084 firm-year observations of nonfinancial firms from GCC economies from 2009 to 2022. First, the study uses an ordinary least square estimator to examine the association of firm complexity with ARL. Second, for robustness purposes, the study applies the propensity score matching technique.

This research study finds that the firms’ complexity increases ARL. Supporting the argument that auditors respond to firm complexity with increased effort, the authors find a positive relation of firm complexity with ARL. This relationship is augmented by auditor change, auditors’ tenure, auditor-qualified opinion and adoption of IFRS. In addition, the authors also find that Big-4 and audit firm industry specialization curtail the positive impact of firm complexity on ARL.

Firms in the GCC have less time to complete their audit and complex firms are likelier to have bigger ARLs. This study provided evidence regarding the curtailing effect of audit quality in GCC. Our findings suggest policymakers and reformers choose improved audit quality to reduce the possibility of larger ARL.

This study enriches the scholarship by presenting a mechanism for reducing the ARL of complex firms through higher audit quality. This study contributes to agency theory by emphasizing audit quality’s important role in emerging markets.

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Organizational complexity and audit report lag in GCC economies: the moderating role of audit quality10.1108/JFRA-03-2023-0113Journal of Financial Reporting and Accounting2023-10-13© 2023 Emerald Publishing LimitedFaisal KhanMohamad Ali Bin Abdul-HamidSaidatunur Fauzi SaidinShatha HussainJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-10-1310.1108/JFRA-03-2023-0113https://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2023-0113/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The impact of female directors on earnings management and the moderating effect of board quality: enabler or deterrent?https://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2023-0119/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe authors motivate this research on the gender diversity of the board because of the recent increases in the number of women in top executive teams (Francis et al., 2015), which has probably been the result of the adoption of legislation for gender quotas as well as the establishment of corporate governance recommendations for gender diverse boards in several countries. The purpose of this study is to consider the quality of board directors when examining the effect of female directors on earnings management. The analyses follow the system generalized method of moment to address endogeneity concerns (e.g. a board with higher quality is more likely to have female directors on board and vice versa). Besides the lags of the endogenous variables, the authors use the female industry ratio as an additional instrument (Liu et al., 2014), as female directors might be inspired by other female directors according to industrial sectors (measured by the two-digit industry codes), where competitors are likely to follow gender diversity practices of other firms within the same industrial sector. The authors’ findings show a negative and significant association between board gender diversity and earnings management (EM), suggesting that independent female directors are the drivers of such effect. High-quality boards decrease the incidence of EM but hinder the potential involvement from female directors towards reducing EM. The incumbent effect of high-quality boards on female director’s contribution on EM reverses with less powerful CEOs. The authors contribute to the extant literature by recognizing that the effectiveness of a female director on decreasing EM is a function of the environment in which decision-making takes place (i.e. board quality/powerful CEOs).The impact of female directors on earnings management and the moderating effect of board quality: enabler or deterrent?
Nafisah Yami, Jannine Poletti-Hughes, Khaled Hussainey
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

The authors motivate this research on the gender diversity of the board because of the recent increases in the number of women in top executive teams (Francis et al., 2015), which has probably been the result of the adoption of legislation for gender quotas as well as the establishment of corporate governance recommendations for gender diverse boards in several countries. The purpose of this study is to consider the quality of board directors when examining the effect of female directors on earnings management.

The analyses follow the system generalized method of moment to address endogeneity concerns (e.g. a board with higher quality is more likely to have female directors on board and vice versa). Besides the lags of the endogenous variables, the authors use the female industry ratio as an additional instrument (Liu et al., 2014), as female directors might be inspired by other female directors according to industrial sectors (measured by the two-digit industry codes), where competitors are likely to follow gender diversity practices of other firms within the same industrial sector.

The authors’ findings show a negative and significant association between board gender diversity and earnings management (EM), suggesting that independent female directors are the drivers of such effect. High-quality boards decrease the incidence of EM but hinder the potential involvement from female directors towards reducing EM. The incumbent effect of high-quality boards on female director’s contribution on EM reverses with less powerful CEOs.

The authors contribute to the extant literature by recognizing that the effectiveness of a female director on decreasing EM is a function of the environment in which decision-making takes place (i.e. board quality/powerful CEOs).

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The impact of female directors on earnings management and the moderating effect of board quality: enabler or deterrent?10.1108/JFRA-03-2023-0119Journal of Financial Reporting and Accounting2023-06-21© 2023 Emerald Publishing LimitedNafisah YamiJannine Poletti-HughesKhaled HussaineyJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-06-2110.1108/JFRA-03-2023-0119https://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2023-0119/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The moderating role of CEO overconfidence on debt maturity decisions: evidence from the MENA regionhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2023-0121/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to analyze how cultural variations impact the relationship between long-term debt use and managerial overconfidence. Investigate into how the relationship between growth prospects and the utilization of long-term debt is moderated by managerial overconfidence. In addition, the research explores the moderating effect of managerial overconfidence on cash flow levels. The study used long-term debt as the dependent variable and used generalized method of moments–instrumental variables regression analysis to examine data from 356 firms across 11 Middle East and North Africa (MENA) countries and 5 industries between 2013 and 2021. CEO overconfidence moderately boosts the link between long-term debt maturity and growth potential, particularly for firms with limited internal funding. Cultural factors, such as masculinity and uncertainty avoidance, play a significant role in moderating the relationship between managerial overconfidence and debt maturity choices. To understand the impact of managerial overconfidence on a company’s debt maturity decision, it is essential for boards and shareholders to consider and monitor the CEO’s behavioral traits, particularly for growing companies. Regulators and policymakers must also be wary of the risk of internal control weakening due to overconfident managers, especially in MENA markets. The authors’ contribution to the literature lies in exploring how managerial overconfidence moderates the agency conflict between shareholders and debtholders in MENA region firms, which has received minimal attention in previous studies. This study expands the knowledge of the impact of managerial overconfidence on emerging economies and provides evidence that national culture plays a vital role in determining debt financing decisions.The moderating role of CEO overconfidence on debt maturity decisions: evidence from the MENA region
Osama EL-Ansary, Aya M. Ahmed
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to analyze how cultural variations impact the relationship between long-term debt use and managerial overconfidence. Investigate into how the relationship between growth prospects and the utilization of long-term debt is moderated by managerial overconfidence. In addition, the research explores the moderating effect of managerial overconfidence on cash flow levels.

The study used long-term debt as the dependent variable and used generalized method of moments–instrumental variables regression analysis to examine data from 356 firms across 11 Middle East and North Africa (MENA) countries and 5 industries between 2013 and 2021.

CEO overconfidence moderately boosts the link between long-term debt maturity and growth potential, particularly for firms with limited internal funding. Cultural factors, such as masculinity and uncertainty avoidance, play a significant role in moderating the relationship between managerial overconfidence and debt maturity choices.

To understand the impact of managerial overconfidence on a company’s debt maturity decision, it is essential for boards and shareholders to consider and monitor the CEO’s behavioral traits, particularly for growing companies. Regulators and policymakers must also be wary of the risk of internal control weakening due to overconfident managers, especially in MENA markets.

The authors’ contribution to the literature lies in exploring how managerial overconfidence moderates the agency conflict between shareholders and debtholders in MENA region firms, which has received minimal attention in previous studies. This study expands the knowledge of the impact of managerial overconfidence on emerging economies and provides evidence that national culture plays a vital role in determining debt financing decisions.

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The moderating role of CEO overconfidence on debt maturity decisions: evidence from the MENA region10.1108/JFRA-03-2023-0121Journal of Financial Reporting and Accounting2023-07-04© 2023 Emerald Publishing LimitedOsama EL-AnsaryAya M. AhmedJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-07-0410.1108/JFRA-03-2023-0121https://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2023-0121/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The effect of ownership structure on tax avoidance with audit quality as a moderating variable: evidence from the ailing economicshttps://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2023-0122/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe purpose of this study is to shed light on the relationships between the different types of ownership structure and tax avoidance activities and examine the moderating effect of audit quality. This study used secondary data from the listed companies in Amman Stock Exchange (2009–2020). To obtain additional robust findings, this study used various proxies for measuring tax avoidance (effective tax rate [ETR] and cash flow effective tax rate [CFETR]). Relying on various proxies for tax avoidance, the results reveal that family and managerial ownership lead to exacerbating tax avoidance activities. Although institutional and board ownership have a positive impact on ETR and CFETR, which indicate that these type of ownership have a negative impact on tax avoidance. Audit quality also has a significant role in moderating the ownership structure–tax avoidance relationships. Besides, the results reveal that audit firm size is not merely symbolic words, but it contributes to reducing and restricting tax aggressiveness. This study has policy implications related to the policymakers in creating future tax policies to minimize and avoid tax avoidance activities. Results of this study can be used to improve awareness among the various owners and to reduce the tax avoidance practices in the developing countries. It also determines a good agenda for research in the relationships between ownership identities, audit quality and tax avoidance, which also can be used to encourage and guide future studies. This research extends the existing literature by examining both the direct and indirect influence of ownership structure on tax avoidance in Jordanian firms by including audit quality as a moderating variable. This is a pioneering and unique study examining the joint influence of the different forms of ownership on tax avoidance. To the best of the author’s knowledge, this study is the first of its kind that examines the interaction influences between the various identities of ownership and audit quality on the tax avoidance activities in the Jordanian context.The effect of ownership structure on tax avoidance with audit quality as a moderating variable: evidence from the ailing economics
Hamza Kamel Qawqzeh
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

The purpose of this study is to shed light on the relationships between the different types of ownership structure and tax avoidance activities and examine the moderating effect of audit quality.

This study used secondary data from the listed companies in Amman Stock Exchange (2009–2020). To obtain additional robust findings, this study used various proxies for measuring tax avoidance (effective tax rate [ETR] and cash flow effective tax rate [CFETR]).

Relying on various proxies for tax avoidance, the results reveal that family and managerial ownership lead to exacerbating tax avoidance activities. Although institutional and board ownership have a positive impact on ETR and CFETR, which indicate that these type of ownership have a negative impact on tax avoidance. Audit quality also has a significant role in moderating the ownership structure–tax avoidance relationships. Besides, the results reveal that audit firm size is not merely symbolic words, but it contributes to reducing and restricting tax aggressiveness.

This study has policy implications related to the policymakers in creating future tax policies to minimize and avoid tax avoidance activities. Results of this study can be used to improve awareness among the various owners and to reduce the tax avoidance practices in the developing countries. It also determines a good agenda for research in the relationships between ownership identities, audit quality and tax avoidance, which also can be used to encourage and guide future studies.

This research extends the existing literature by examining both the direct and indirect influence of ownership structure on tax avoidance in Jordanian firms by including audit quality as a moderating variable. This is a pioneering and unique study examining the joint influence of the different forms of ownership on tax avoidance. To the best of the author’s knowledge, this study is the first of its kind that examines the interaction influences between the various identities of ownership and audit quality on the tax avoidance activities in the Jordanian context.

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The effect of ownership structure on tax avoidance with audit quality as a moderating variable: evidence from the ailing economics10.1108/JFRA-03-2023-0122Journal of Financial Reporting and Accounting2023-10-20© 2023 Emerald Publishing LimitedHamza Kamel QawqzehJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-10-2010.1108/JFRA-03-2023-0122https://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2023-0122/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Investigating the effects of COVID-19 pandemic on Kuwait stock return: (A) symmetric time-varying evaluationhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2023-0131/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to explore the long- and short-run effects of daily confirmed cases of COVID-19 (Ct) on daily stock returns (Rt) for Kuwait. This is the first study that was applied to the case of Kuwait. We employed the autoregressive distributed lag (ARDL) model of Pesaran et al. (2001) and the nonlinear autoregressive distributed lag (NARDL) model of Shin et al. (2001) for daily data over the period March 2020 to August 2021. The findings first document the existence of a long-run relationship (cointegration). Second, the findings of the ARDL model show a significant positive long-run effect of daily confirmed cases of COVID-19 (Ct) on daily stock returns (Rt) but a significant negative short-run effect. As for the NARDL model, the findings showed that the increase and decrease of daily confirmed cases of COVID-19 (Ct−1+,Ct−1−) have symmetric long-run effects on daily stock returns but asymmetric short-run effects. Finally, the vector error correction model causality test shows significant long- and short-run unidirectional causality running from daily confirmed cases of COVID-19 (Ct) to daily stock returns (Rt). To the best of the author’s knowledge, this is the first study that was applied to the case of Kuwait.Investigating the effects of COVID-19 pandemic on Kuwait stock return: (A) symmetric time-varying evaluation
Khalid M. Kisswani
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to explore the long- and short-run effects of daily confirmed cases of COVID-19 (Ct) on daily stock returns (Rt) for Kuwait. This is the first study that was applied to the case of Kuwait.

We employed the autoregressive distributed lag (ARDL) model of Pesaran et al. (2001) and the nonlinear autoregressive distributed lag (NARDL) model of Shin et al. (2001) for daily data over the period March 2020 to August 2021.

The findings first document the existence of a long-run relationship (cointegration). Second, the findings of the ARDL model show a significant positive long-run effect of daily confirmed cases of COVID-19 (Ct) on daily stock returns (Rt) but a significant negative short-run effect. As for the NARDL model, the findings showed that the increase and decrease of daily confirmed cases of COVID-19 (Ct1+,Ct1) have symmetric long-run effects on daily stock returns but asymmetric short-run effects. Finally, the vector error correction model causality test shows significant long- and short-run unidirectional causality running from daily confirmed cases of COVID-19 (Ct) to daily stock returns (Rt).

To the best of the author’s knowledge, this is the first study that was applied to the case of Kuwait.

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Investigating the effects of COVID-19 pandemic on Kuwait stock return: (A) symmetric time-varying evaluation10.1108/JFRA-03-2023-0131Journal of Financial Reporting and Accounting2023-06-13© 2023 Emerald Publishing LimitedKhalid M. KisswaniJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-06-1310.1108/JFRA-03-2023-0131https://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2023-0131/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Measuring the integrated reporting quality in Europe: balanced scorecard perspectiveshttps://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2023-0134/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe aim of this study is to evaluate the adoption and quality of integrated reports in the European Union (EU). The sample consists of 147 listed firms from the 18 EU countries during 2013–2020. This study creates a disclosure index – based on the balanced scorecard (BSC) that reflects the information content of integrated reports. The content analysis method is used to measure the integrated reporting quality (IRQ). The findings demonstrate that the IRQ increased across the study’s time frame, going from 49.3% in 2013 to 77% in 2020. Furthermore, financial disclosures still get the most attention in the integrated reporting (IR), followed by learning and growth perspective disclosures. In addition, businesses in the financial and industrial sectors rely more on integrated reports. However, the utility sector has the highest IRQ score. By country, Spain has the highest rate of IR adoption, followed by France. Other countries, such as Austria and Hungary, have only implemented IR by one company each. This study adds to the IR literature a new approach to measure IRQ by linking BSC with the IR framework. Empirically, businesses of any size can use this method to assess the degree of balance between the revealed financial and nonfinancial information in their reports. Empirically, this study helps IR practitioners in determining how widely IR is used in Europe and in updating the database on the IR website. It helps them update and improve the IR framework by identifying the elements that have the least transparency and quality, investigating the causes and enhancing them. To the best of the authors’ knowledge, this study is the first to examine the IRQ in EU countries by linking the BSC with IR elements. This is to split the elements into their own pillars, making it easier to track disclosure and evaluate the corporations’ interest in revealing these perspectives, on their own and collectively.Measuring the integrated reporting quality in Europe: balanced scorecard perspectives
Omar Hassan Ali Nada, Zsuzsanna Győri
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

The aim of this study is to evaluate the adoption and quality of integrated reports in the European Union (EU).

The sample consists of 147 listed firms from the 18 EU countries during 2013–2020. This study creates a disclosure index – based on the balanced scorecard (BSC) that reflects the information content of integrated reports. The content analysis method is used to measure the integrated reporting quality (IRQ).

The findings demonstrate that the IRQ increased across the study’s time frame, going from 49.3% in 2013 to 77% in 2020. Furthermore, financial disclosures still get the most attention in the integrated reporting (IR), followed by learning and growth perspective disclosures. In addition, businesses in the financial and industrial sectors rely more on integrated reports. However, the utility sector has the highest IRQ score. By country, Spain has the highest rate of IR adoption, followed by France. Other countries, such as Austria and Hungary, have only implemented IR by one company each.

This study adds to the IR literature a new approach to measure IRQ by linking BSC with the IR framework. Empirically, businesses of any size can use this method to assess the degree of balance between the revealed financial and nonfinancial information in their reports.

Empirically, this study helps IR practitioners in determining how widely IR is used in Europe and in updating the database on the IR website. It helps them update and improve the IR framework by identifying the elements that have the least transparency and quality, investigating the causes and enhancing them.

To the best of the authors’ knowledge, this study is the first to examine the IRQ in EU countries by linking the BSC with IR elements. This is to split the elements into their own pillars, making it easier to track disclosure and evaluate the corporations’ interest in revealing these perspectives, on their own and collectively.

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Measuring the integrated reporting quality in Europe: balanced scorecard perspectives10.1108/JFRA-03-2023-0134Journal of Financial Reporting and Accounting2023-11-29© 2023 Omar Hassan Ali Nada and Zsuzsanna Győri.Omar Hassan Ali NadaZsuzsanna GyőriJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-11-2910.1108/JFRA-03-2023-0134https://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2023-0134/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Omar Hassan Ali Nada and Zsuzsanna Győri.http://creativecommons.org/licences/by/4.0/legalcode
Maximizing internal control effectiveness: the synergy between forensic accounting and corporate governancehttps://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2023-0140/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to explore the joint role of forensic accounting and corporate governance in enhancing internal control effectiveness. The study used a previously administrated questionnaire as a data collection method and partial least squares structural equation modeling as a data analysis tool. The findings of this paper find a positive relationship between the study’s independent variables (forensic accounting and corporate governance) and dependent variables (internal control effectiveness). One potential limitation of this study is the use of a previously administered questionnaire as the primary data collection method, which may have limited the scope and depth of the data collected. Another limitation may be the focus on only two independent variables (forensic accounting and corporate governance), which may not fully capture all the factors that contribute to internal control effectiveness. Despite these limitations, this study provides important insights into the role of forensic accounting and corporate governance in enhancing internal control effectiveness and highlights the need for further research in this area. This paper underscores the importance of investing in effective internal control systems and highlights the key role that forensic accounting and corporate governance play in enhancing the effectiveness of these systems. Effective internal control systems are important not only for the financial health of organizations but also for their social and ethical responsibilities to stakeholders. The findings of this study suggest that investing in strong forensic accounting and corporate governance practices can help organizations meet these responsibilities and promote trust and transparency. Policymakers and regulators may use these findings to inform their efforts to promote effective internal control systems and enhance public trust in organizations. This paper has important implications for service organizations in Jordan and can be used to inform policymakers and regulators in their efforts to promote strong and effective internal control systems.Maximizing internal control effectiveness: the synergy between forensic accounting and corporate governance
Abdallah Bader Alzoubi
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to explore the joint role of forensic accounting and corporate governance in enhancing internal control effectiveness.

The study used a previously administrated questionnaire as a data collection method and partial least squares structural equation modeling as a data analysis tool.

The findings of this paper find a positive relationship between the study’s independent variables (forensic accounting and corporate governance) and dependent variables (internal control effectiveness).

One potential limitation of this study is the use of a previously administered questionnaire as the primary data collection method, which may have limited the scope and depth of the data collected. Another limitation may be the focus on only two independent variables (forensic accounting and corporate governance), which may not fully capture all the factors that contribute to internal control effectiveness. Despite these limitations, this study provides important insights into the role of forensic accounting and corporate governance in enhancing internal control effectiveness and highlights the need for further research in this area.

This paper underscores the importance of investing in effective internal control systems and highlights the key role that forensic accounting and corporate governance play in enhancing the effectiveness of these systems.

Effective internal control systems are important not only for the financial health of organizations but also for their social and ethical responsibilities to stakeholders. The findings of this study suggest that investing in strong forensic accounting and corporate governance practices can help organizations meet these responsibilities and promote trust and transparency. Policymakers and regulators may use these findings to inform their efforts to promote effective internal control systems and enhance public trust in organizations.

This paper has important implications for service organizations in Jordan and can be used to inform policymakers and regulators in their efforts to promote strong and effective internal control systems.

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Maximizing internal control effectiveness: the synergy between forensic accounting and corporate governance10.1108/JFRA-03-2023-0140Journal of Financial Reporting and Accounting2023-07-28© 2023 Emerald Publishing LimitedAbdallah Bader AlzoubiJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-07-2810.1108/JFRA-03-2023-0140https://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2023-0140/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Does CSR disclosure mediate the board characteristics-cost of equity capital nexus? Evidence from Jordanian services companieshttps://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2023-0143/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to investigate the direct nexus between board characteristics, corporate social responsibility (CSR) disclosure and the cost of equity capital (CEQ). This is done by using agency theory, stakeholder theory and signalling theory, followed by an investigation into the indirect mediation impact of CSR disclosure in the board characteristics-CEQ nexus. It intends to present new experimental evidence from Jordan’s developing economy. The study’s target population was services companies registered on the Amman Stock Exchange (ASE) between 2012 and 2020. As a result, the population and sampling of this study are represented by all services companies for whom complete data are available over the period, with a total of 43 services companies yielding 387 company-year observations. Data for our study were obtained from their annual disclosures and the ASE’s database. The main findings demonstrated that board size, board gender variety and the number of board sessions positively affect CSR disclosure significantly. In addition, three board characteristics (i.e. board size, board independence and board gender variety) significantly negatively affect CEQ. Besides, CSR disclosure significantly negatively affects CEQ and it fully mediates the relationship between two board characteristics (i.e. board size and board gender variety) and CEQ, whereas it partially mediates the nexus between board independence, CEO/Chairman duality and the number of board sessions of board characteristics and CEQ. This study varies from earlier studies, in that it builds a new research model by looking at the mediating role of CSR disclosure in the nexus among board characteristics and the CEQ.Does CSR disclosure mediate the board characteristics-cost of equity capital nexus? Evidence from Jordanian services companies
Malik Muneer Abu Afifa, Isam Saleh, Maen Al-Zaghilat, Nawaf Thuneibat, Nha Minh Nguyen
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to investigate the direct nexus between board characteristics, corporate social responsibility (CSR) disclosure and the cost of equity capital (CEQ). This is done by using agency theory, stakeholder theory and signalling theory, followed by an investigation into the indirect mediation impact of CSR disclosure in the board characteristics-CEQ nexus. It intends to present new experimental evidence from Jordan’s developing economy.

The study’s target population was services companies registered on the Amman Stock Exchange (ASE) between 2012 and 2020. As a result, the population and sampling of this study are represented by all services companies for whom complete data are available over the period, with a total of 43 services companies yielding 387 company-year observations. Data for our study were obtained from their annual disclosures and the ASE’s database.

The main findings demonstrated that board size, board gender variety and the number of board sessions positively affect CSR disclosure significantly. In addition, three board characteristics (i.e. board size, board independence and board gender variety) significantly negatively affect CEQ. Besides, CSR disclosure significantly negatively affects CEQ and it fully mediates the relationship between two board characteristics (i.e. board size and board gender variety) and CEQ, whereas it partially mediates the nexus between board independence, CEO/Chairman duality and the number of board sessions of board characteristics and CEQ.

This study varies from earlier studies, in that it builds a new research model by looking at the mediating role of CSR disclosure in the nexus among board characteristics and the CEQ.

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Does CSR disclosure mediate the board characteristics-cost of equity capital nexus? Evidence from Jordanian services companies10.1108/JFRA-03-2023-0143Journal of Financial Reporting and Accounting2023-11-01© 2023 Emerald Publishing LimitedMalik Muneer Abu AfifaIsam SalehMaen Al-ZaghilatNawaf ThuneibatNha Minh NguyenJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-11-0110.1108/JFRA-03-2023-0143https://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2023-0143/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Value relevance of audit opinions in an emerging market: evidence from Moroccohttps://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2023-0144/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to determine whether audit opinions in Morocco, an emerging market, are value relevant to the stock market, through the investigation of the market reaction to the issuance of modified audit opinions (MAOs). The event study approach is used. The data are derived from the financial reports of listed companies on the Casablanca Stock Exchange over a period of 10 years from 2010 to 2019. This paper does not find evidence that the market reacts to the issuance of MAOs when grouped together. When partitioning the sample by types, there is an evidence of a stock market reaction to qualified audit opinions and the qualified audit opinions with observation paragraph when they are combined with a negative variation of earnings per share. Examination of the impact of different natures of qualifications shows no consistent results and that the market does not distinguish between natures of qualifications. These results may be due to the fact that some investors have information about the audit opinion long before it is made public, due to privileged access to audit opinions, or that investors underestimate audit opinions relative to other financial indicators. This study contributes to the existing literature by investigating an emerging market, not previously tested, after the introduction of several regulatory reforms in Moroccan market aimed at enhancing transparency in financial reporting. It refines the market reaction models used in previous studies by using both ordinary least squares and the Scholes–Williams techniques that correct for the effect of thin trading on the market index. In addition, special attention is given to studying the market reaction to each type of MAOs and to each natures of qualifications.Value relevance of audit opinions in an emerging market: evidence from Morocco
Amine El Badlaoui, Mariam Cherqaoui
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to determine whether audit opinions in Morocco, an emerging market, are value relevant to the stock market, through the investigation of the market reaction to the issuance of modified audit opinions (MAOs).

The event study approach is used. The data are derived from the financial reports of listed companies on the Casablanca Stock Exchange over a period of 10 years from 2010 to 2019.

This paper does not find evidence that the market reacts to the issuance of MAOs when grouped together. When partitioning the sample by types, there is an evidence of a stock market reaction to qualified audit opinions and the qualified audit opinions with observation paragraph when they are combined with a negative variation of earnings per share. Examination of the impact of different natures of qualifications shows no consistent results and that the market does not distinguish between natures of qualifications.

These results may be due to the fact that some investors have information about the audit opinion long before it is made public, due to privileged access to audit opinions, or that investors underestimate audit opinions relative to other financial indicators.

This study contributes to the existing literature by investigating an emerging market, not previously tested, after the introduction of several regulatory reforms in Moroccan market aimed at enhancing transparency in financial reporting. It refines the market reaction models used in previous studies by using both ordinary least squares and the Scholes–Williams techniques that correct for the effect of thin trading on the market index. In addition, special attention is given to studying the market reaction to each type of MAOs and to each natures of qualifications.

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Value relevance of audit opinions in an emerging market: evidence from Morocco10.1108/JFRA-03-2023-0144Journal of Financial Reporting and Accounting2023-07-13© 2023 Emerald Publishing LimitedAmine El BadlaouiMariam CherqaouiJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-07-1310.1108/JFRA-03-2023-0144https://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2023-0144/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Income smoothing through R&D management and credit ratingshttps://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2023-0146/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestPrior studies generally focus on income smoothing through discretionary accruals and document that managers have incentives to smooth earnings due to various reasons. This paper aims to focus on income smoothing through research and development (R&D) management and examine whether and how income smoothing through R&D management affects credit rating agencies’ perception of firm risk. The authors use financial statement data from the CRSP/Compustat Merged data set universe for the period from 1992 to 2019 after excluding financial and utility industries. The authors follow the model for credit ratings used in previous literature to test the hypothesis. Specifically, the authors use an ordered probit model to express credit ratings as a function of income smoothing attributes. The authors find that R&D-based income smoothing improves a firm’s credit rating. However, the positive effect of R&D-based income smoothing on credit ratings is less than that of accruals-based income smoothing. This study also shows that the positive effect of R&D-based income smoothing is more pronounced for firms less subject to opportunistic incentives, further strengthening the notion that managers smooth earnings through R&D management to provide more informative earnings. This study contributes to the income smoothing literature in several ways. First, the authors contribute to the research by showing that managers’ income smoothing activity through R&D management positively affects firms’ credit rating. Second, the authors also document the relative benefits of the two different income smoothing techniques in terms of improving credit agencies’ perception of firms’ creditworthiness.Income smoothing through R&D management and credit ratings
Sang Hyun Park, Sean Jung
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

Prior studies generally focus on income smoothing through discretionary accruals and document that managers have incentives to smooth earnings due to various reasons. This paper aims to focus on income smoothing through research and development (R&D) management and examine whether and how income smoothing through R&D management affects credit rating agencies’ perception of firm risk.

The authors use financial statement data from the CRSP/Compustat Merged data set universe for the period from 1992 to 2019 after excluding financial and utility industries. The authors follow the model for credit ratings used in previous literature to test the hypothesis. Specifically, the authors use an ordered probit model to express credit ratings as a function of income smoothing attributes.

The authors find that R&D-based income smoothing improves a firm’s credit rating. However, the positive effect of R&D-based income smoothing on credit ratings is less than that of accruals-based income smoothing. This study also shows that the positive effect of R&D-based income smoothing is more pronounced for firms less subject to opportunistic incentives, further strengthening the notion that managers smooth earnings through R&D management to provide more informative earnings.

This study contributes to the income smoothing literature in several ways. First, the authors contribute to the research by showing that managers’ income smoothing activity through R&D management positively affects firms’ credit rating. Second, the authors also document the relative benefits of the two different income smoothing techniques in terms of improving credit agencies’ perception of firms’ creditworthiness.

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Income smoothing through R&D management and credit ratings10.1108/JFRA-03-2023-0146Journal of Financial Reporting and Accounting2023-09-12© 2023 Emerald Publishing LimitedSang Hyun ParkSean JungJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-09-1210.1108/JFRA-03-2023-0146https://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2023-0146/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Does XBRL adoption eliminate misclassification of income statement items?https://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2023-0147/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe financial world of today is evolving at a rate that can be challenging to keep up with and comprehend due to developments in information and communication technology. When compared to a conventional disclosure, the eXtensible Business Reporting Language (XBRL), which was named one of the top ten accounting technologies, has a clear advantage in reducing information asymmetry by providing interactive data disclosure. This study aims to examine whether forcing companies to adopt XBRL would cause them to prefer misclassifying income statement items as an alternative to more risky earnings management methods. The study sample includes nonfinancial UAE companies listed on Dubai Financial Market and Abu Dhabi Securities Exchange from 2012 to 2019. Fixed effect and system General Method of Moments regressions were used to analyze the study data. The study found that XBRL reporting resulted in lowering the quality of financial reporting as companies have a higher tendency to misclassify income statement items as earnings management mechanism. The findings of this research can be used by stakeholders and practitioners in the UAE to better understand whether the use of XBRL is linked to the engagement of financial reporting manipulative practices. The findings of this study also inform policymakers and regulators about the consequences of companies formally adopting digital disclosure language in an effort to improve the quality of their reporting. Besides, the results offer guidance to regulators considering imposing XBRL usage regulations. Limited number of studies have tested the association between XBRL mandatory adoption and misclassification of income statement items as an earnings management tool in the Gulf Cooperation Council region.Does XBRL adoption eliminate misclassification of income statement items?
Zakeya Sanad
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

The financial world of today is evolving at a rate that can be challenging to keep up with and comprehend due to developments in information and communication technology. When compared to a conventional disclosure, the eXtensible Business Reporting Language (XBRL), which was named one of the top ten accounting technologies, has a clear advantage in reducing information asymmetry by providing interactive data disclosure. This study aims to examine whether forcing companies to adopt XBRL would cause them to prefer misclassifying income statement items as an alternative to more risky earnings management methods.

The study sample includes nonfinancial UAE companies listed on Dubai Financial Market and Abu Dhabi Securities Exchange from 2012 to 2019. Fixed effect and system General Method of Moments regressions were used to analyze the study data.

The study found that XBRL reporting resulted in lowering the quality of financial reporting as companies have a higher tendency to misclassify income statement items as earnings management mechanism.

The findings of this research can be used by stakeholders and practitioners in the UAE to better understand whether the use of XBRL is linked to the engagement of financial reporting manipulative practices. The findings of this study also inform policymakers and regulators about the consequences of companies formally adopting digital disclosure language in an effort to improve the quality of their reporting. Besides, the results offer guidance to regulators considering imposing XBRL usage regulations.

Limited number of studies have tested the association between XBRL mandatory adoption and misclassification of income statement items as an earnings management tool in the Gulf Cooperation Council region.

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Does XBRL adoption eliminate misclassification of income statement items?10.1108/JFRA-03-2023-0147Journal of Financial Reporting and Accounting2023-07-31© 2023 Emerald Publishing LimitedZakeya SanadJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-07-3110.1108/JFRA-03-2023-0147https://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2023-0147/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Accounting meets metaverse: navigating the intersection between the real and virtual worldshttps://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2023-0157/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe “metaverse” is the new buzzword. With the phenomenal growth of the metaverse comes accounting, taxation and jurisdictional challenges, which business and governments have yet to fully address. This paper aims to highlight and rationalise the lack of regulatory framework and multiplicity of jurisdictions on metaverse transactions. This paper addresses some of the complications with respect to accounting and taxation in virtual environments. This study relies on secondary data and emerging literature to understand the multiplicity of jurisdiction and complexity of the accounting transactions. The concept of the metaverse is rapidly evolving, and this study uses extant literature to provide the foundation for understanding the key challenges relating to accounting and taxation. Concepts of revenue recognition and deferment are challenged by the transactions in the metaverse. There are novel applications, underpinned by emerging technologies and blockchain supporting new crypto assets, such as non-fungible tokens and other decentralised finance (DeFi) tools; however, the caveats of anonymity and jurisdictional issues persist. The paper suggests that the industry must adapt to the unique reporting requirements of these assets and develop new standards for evaluating their value for financial reporting purposes. The paper emphasises the need for a case-based approach in the absence of standardised regulations for the accounting industry in the metaverse. This paper adds original contributions to extant literature of the metaverse and advances ongoing debates into the accounting and taxation issues pertinent to the metaverse and DeFi.Accounting meets metaverse: navigating the intersection between the real and virtual worlds
Durgesh Pandey, Paul Gilmour
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

The “metaverse” is the new buzzword. With the phenomenal growth of the metaverse comes accounting, taxation and jurisdictional challenges, which business and governments have yet to fully address. This paper aims to highlight and rationalise the lack of regulatory framework and multiplicity of jurisdictions on metaverse transactions. This paper addresses some of the complications with respect to accounting and taxation in virtual environments.

This study relies on secondary data and emerging literature to understand the multiplicity of jurisdiction and complexity of the accounting transactions. The concept of the metaverse is rapidly evolving, and this study uses extant literature to provide the foundation for understanding the key challenges relating to accounting and taxation.

Concepts of revenue recognition and deferment are challenged by the transactions in the metaverse. There are novel applications, underpinned by emerging technologies and blockchain supporting new crypto assets, such as non-fungible tokens and other decentralised finance (DeFi) tools; however, the caveats of anonymity and jurisdictional issues persist. The paper suggests that the industry must adapt to the unique reporting requirements of these assets and develop new standards for evaluating their value for financial reporting purposes. The paper emphasises the need for a case-based approach in the absence of standardised regulations for the accounting industry in the metaverse.

This paper adds original contributions to extant literature of the metaverse and advances ongoing debates into the accounting and taxation issues pertinent to the metaverse and DeFi.

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Accounting meets metaverse: navigating the intersection between the real and virtual worlds10.1108/JFRA-03-2023-0157Journal of Financial Reporting and Accounting2023-06-27© 2023 Emerald Publishing LimitedDurgesh PandeyPaul GilmourJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-06-2710.1108/JFRA-03-2023-0157https://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2023-0157/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The impact of critical audit matters on audit report lag and audit fees: evidence from the United Stateshttps://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2023-0158/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to investigate the impact of the implementation of the critical audit matters (CAMs) disclosure requirement and the subsequent relationship between CAM disclosures and audit report lag, as well as audit fees in the USA. This study used difference-in-differences analyses to investigate the impact that the implementation of the requirement for auditors to report CAMs on their audit report has on the audit process. It also used levels regression models to examine the relationship that CAM disclosures have with audit report lag and audit fees. This study found that the implementation of the CAM disclosure requirement in the USA reduced audit report lag while not significantly affecting audit fees. This suggests that the CAM disclosure requirement may increase the cooperation between auditors and managers and improve the efficiency of the audit process. This study’s results are informative for assessing the economic impact of requiring CAM disclosures, which should be of importance to regulators, auditors and accounting researchers. This study used different approaches to investigate two aspects of the CAM disclosure requirement – the effect of the implementation of the disclosure requirement and the subsequent effects related to CAM reporting outcomes. Unlike many previous studies investigating CAM disclosures, which relied on experiments and questionnaires, this study used actual CAM disclosure data in the USA to investigate the impact on audit report lag and audit fees.The impact of critical audit matters on audit report lag and audit fees: evidence from the United States
Nian Lim (Vic) Lee, Mohamed Sami Khalaf, Magdy Farag, Mohamed Gomaa
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to investigate the impact of the implementation of the critical audit matters (CAMs) disclosure requirement and the subsequent relationship between CAM disclosures and audit report lag, as well as audit fees in the USA.

This study used difference-in-differences analyses to investigate the impact that the implementation of the requirement for auditors to report CAMs on their audit report has on the audit process. It also used levels regression models to examine the relationship that CAM disclosures have with audit report lag and audit fees.

This study found that the implementation of the CAM disclosure requirement in the USA reduced audit report lag while not significantly affecting audit fees. This suggests that the CAM disclosure requirement may increase the cooperation between auditors and managers and improve the efficiency of the audit process.

This study’s results are informative for assessing the economic impact of requiring CAM disclosures, which should be of importance to regulators, auditors and accounting researchers.

This study used different approaches to investigate two aspects of the CAM disclosure requirement – the effect of the implementation of the disclosure requirement and the subsequent effects related to CAM reporting outcomes. Unlike many previous studies investigating CAM disclosures, which relied on experiments and questionnaires, this study used actual CAM disclosure data in the USA to investigate the impact on audit report lag and audit fees.

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The impact of critical audit matters on audit report lag and audit fees: evidence from the United States10.1108/JFRA-03-2023-0158Journal of Financial Reporting and Accounting2024-02-13© 2024 Emerald Publishing LimitedNian Lim (Vic) LeeMohamed Sami KhalafMagdy FaragMohamed GomaaJournal of Financial Reporting and Accountingahead-of-printahead-of-print2024-02-1310.1108/JFRA-03-2023-0158https://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2023-0158/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Emerald Publishing Limited
The moderating effect of environmental uncertainty on the relationship between budgetary participation and budget qualityhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2023-0162/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to investigate the influence of budgetary participation on budget quality on top of the moderating role of environmental uncertainty on the said relationship. The objectives of the current study were achieved through a survey conducted in 15 Iraqi states. Each state contains several municipalities. In total, 180 survey forms were disseminated to the heads of the municipalities, where ultimately 155 questionnaires proceeded to the data analysis stage. In this stage, statistical package for social sciences, analysis of moment structure and structural equation modelling were used to solve the research problem and achieve the objectives. Through the results of the statistical analysis, this study concluded the significant and positive effect of budgetary participation on budget quality. In addition, the study confirmed the moderating role of environmental uncertainty in weakening the positive relationship between budgetary participation and budget quality. The findings can be used to encourage municipal institutions and local governments to expand on the factor of employee participation in affecting the process of budget determination, hence mitigating budget failure.The moderating effect of environmental uncertainty on the relationship between budgetary participation and budget quality
Ali Falaah Hassan, Rohaida Basiruddin
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to investigate the influence of budgetary participation on budget quality on top of the moderating role of environmental uncertainty on the said relationship.

The objectives of the current study were achieved through a survey conducted in 15 Iraqi states. Each state contains several municipalities. In total, 180 survey forms were disseminated to the heads of the municipalities, where ultimately 155 questionnaires proceeded to the data analysis stage. In this stage, statistical package for social sciences, analysis of moment structure and structural equation modelling were used to solve the research problem and achieve the objectives.

Through the results of the statistical analysis, this study concluded the significant and positive effect of budgetary participation on budget quality. In addition, the study confirmed the moderating role of environmental uncertainty in weakening the positive relationship between budgetary participation and budget quality.

The findings can be used to encourage municipal institutions and local governments to expand on the factor of employee participation in affecting the process of budget determination, hence mitigating budget failure.

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The moderating effect of environmental uncertainty on the relationship between budgetary participation and budget quality10.1108/JFRA-03-2023-0162Journal of Financial Reporting and Accounting2023-09-18© 2023 Emerald Publishing LimitedAli Falaah HassanRohaida BasiruddinJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-09-1810.1108/JFRA-03-2023-0162https://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2023-0162/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Does the adoption of blockchain technology add intangible benefits to the industrial sector? Evidence from Jordanhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2023-0164/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to examine the feasibility of adopting blockchain technology in Jordan’s industrial sector and its intangible benefits. It also analyzes the influence of factors like technological, process, cultural and leadership readiness on the willingness of enterprises to adopt blockchain. To gain insights into the potential adoption of blockchain technology and its intangible benefits for enterprises in the Jordanian industrial sector, this study gathered perspectives from a broad range of professionals, including financial managers, internal control staff, accounting departments, IT department managers and IS-related personnel. This was achieved through the administration of a comprehensive questionnaire designed to capture their opinions. This study highlights the importance of technological and leadership readiness in adopting blockchain. It also shows that blockchain adoption can yield significant intangible benefits for enterprises. However, the study did not find a significant relationship between process readiness, cultural readiness and the intention to adopt blockchain. The study’s outcomes underscore the importance of prioritizing technological and leadership readiness for enterprises and policymakers intending to adopt blockchain technology. By doing so, they can increase their willingness to adopt this technology and leverage its benefits. This pioneering study investigates the adoption of blockchain technology and its intangible benefits for Jordanian businesses. It also examines the influence of factors like technological, process, cultural and leadership readiness on the decision to adopt blockchain in the industrial sector.Does the adoption of blockchain technology add intangible benefits to the industrial sector? Evidence from Jordan
Zaid Jaradat, Ahmad Al-Hawamleh, Mohannad Obeid Al Shbail, Allam Hamdan
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to examine the feasibility of adopting blockchain technology in Jordan’s industrial sector and its intangible benefits. It also analyzes the influence of factors like technological, process, cultural and leadership readiness on the willingness of enterprises to adopt blockchain.

To gain insights into the potential adoption of blockchain technology and its intangible benefits for enterprises in the Jordanian industrial sector, this study gathered perspectives from a broad range of professionals, including financial managers, internal control staff, accounting departments, IT department managers and IS-related personnel. This was achieved through the administration of a comprehensive questionnaire designed to capture their opinions.

This study highlights the importance of technological and leadership readiness in adopting blockchain. It also shows that blockchain adoption can yield significant intangible benefits for enterprises. However, the study did not find a significant relationship between process readiness, cultural readiness and the intention to adopt blockchain.

The study’s outcomes underscore the importance of prioritizing technological and leadership readiness for enterprises and policymakers intending to adopt blockchain technology. By doing so, they can increase their willingness to adopt this technology and leverage its benefits.

This pioneering study investigates the adoption of blockchain technology and its intangible benefits for Jordanian businesses. It also examines the influence of factors like technological, process, cultural and leadership readiness on the decision to adopt blockchain in the industrial sector.

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Does the adoption of blockchain technology add intangible benefits to the industrial sector? Evidence from Jordan10.1108/JFRA-03-2023-0164Journal of Financial Reporting and Accounting2023-07-20© 2023 Emerald Publishing LimitedZaid JaradatAhmad Al-HawamlehMohannad Obeid Al ShbailAllam HamdanJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-07-2010.1108/JFRA-03-2023-0164https://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2023-0164/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Corporate environmental disclosure in Europe: the effects of the regulatory environmenthttps://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2023-0165/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to assess the impact of regulatory changes on corporate environmental disclosure practices in Europe. More specifically, the authors perform a difference-in-differences analysis to study the impact of the Paris agreement (United Nations Climate Change Conference, COP21) and of the French Law 2015-992 on energy transition for green growth. The sample consists of the listed companies belonging to the Euro Stoxx 50 index, and they are analysed over the 2010–2019 time horizon by means of an expert validated environmental disclosure dictionary and difference-in-differences analysis. The main results show that both regulatory interventions contributed to improving corporate environmental disclosure. The authors also show that firms belonging to the most polluting sectors tend to provide more information on environmental matters, likely in an attempt to divert stakeholders’ attention. By analysing an under-investigated topic, the paper calls for significant efforts by regulators to find the most suitable solutions to induce firms to increase their levels of transparency on the impact of environmental risks and on how these risks are managed.Corporate environmental disclosure in Europe: the effects of the regulatory environment
Salvatore Polizzi, Enzo Scannella
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to assess the impact of regulatory changes on corporate environmental disclosure practices in Europe. More specifically, the authors perform a difference-in-differences analysis to study the impact of the Paris agreement (United Nations Climate Change Conference, COP21) and of the French Law 2015-992 on energy transition for green growth.

The sample consists of the listed companies belonging to the Euro Stoxx 50 index, and they are analysed over the 2010–2019 time horizon by means of an expert validated environmental disclosure dictionary and difference-in-differences analysis.

The main results show that both regulatory interventions contributed to improving corporate environmental disclosure. The authors also show that firms belonging to the most polluting sectors tend to provide more information on environmental matters, likely in an attempt to divert stakeholders’ attention.

By analysing an under-investigated topic, the paper calls for significant efforts by regulators to find the most suitable solutions to induce firms to increase their levels of transparency on the impact of environmental risks and on how these risks are managed.

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Corporate environmental disclosure in Europe: the effects of the regulatory environment10.1108/JFRA-03-2023-0165Journal of Financial Reporting and Accounting2023-08-11© 2023 Emerald Publishing LimitedSalvatore PolizziEnzo ScannellaJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-08-1110.1108/JFRA-03-2023-0165https://www.emerald.com/insight/content/doi/10.1108/JFRA-03-2023-0165/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The influence of foreign direct investment on the Egyptian audit market: what do Big 4 partners’ perceptions tell us?https://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2022-0117/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to examine the effects of the entry of foreign direct investments (FDIs) on the audit markets in developing countries (i.e. Egypt). There is a long-standing debate on the impact of FDIs on developing markets, but little is still known about the effect of FDI on national suppliers, such as audit firms. This paper reports the results of a study that used qualitative research methods. It involves interviews with senior management teams of the Big 4 audit firms, to find out how these firms deal simultaneously with conflicting global and local influences. The interviews were complemented by the publicly available data on the firms’ websites as well as published reports related to the Egyptian economy and current investment regulations. Drawing on the institutional theory, the findings suggest that an increased litigious environment, compliance with developed markets’ regulations, auditor regulatory sanctions and improved local accounting and auditing standards are highly significant consequences of foreign investment inflows. The findings indicate that more emphasis has been given to the quality of audit and auditors’ independence when auditing FDIs. Both audit regulators and audit firms in the domestic market pay higher attention to improving the quality of financial reports when FDIs have entered the market. More inspections and reviews for audit firms have been conducted, and local auditing and accounting standards have been revised to be in compliance with international standards. Our results have important implications for investors, regulatory authorities and governments in relation to the development, implementation and enforcement of international financial reporting and auditing standards. Policymakers and regulators in Egypt have responded to international pressure by revitalizing their local accounting and auditing standards and adopting international financial reporting and auditing standards. The authors identify strategies that have been adopted by audit firms to face the FDIs’ challenges.The influence of foreign direct investment on the Egyptian audit market: what do Big 4 partners’ perceptions tell us?
Mohamed Khaled Eldaly, Ahmed A. Elamer, Magdy Abdel-Kader
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to examine the effects of the entry of foreign direct investments (FDIs) on the audit markets in developing countries (i.e. Egypt). There is a long-standing debate on the impact of FDIs on developing markets, but little is still known about the effect of FDI on national suppliers, such as audit firms.

This paper reports the results of a study that used qualitative research methods. It involves interviews with senior management teams of the Big 4 audit firms, to find out how these firms deal simultaneously with conflicting global and local influences. The interviews were complemented by the publicly available data on the firms’ websites as well as published reports related to the Egyptian economy and current investment regulations.

Drawing on the institutional theory, the findings suggest that an increased litigious environment, compliance with developed markets’ regulations, auditor regulatory sanctions and improved local accounting and auditing standards are highly significant consequences of foreign investment inflows. The findings indicate that more emphasis has been given to the quality of audit and auditors’ independence when auditing FDIs. Both audit regulators and audit firms in the domestic market pay higher attention to improving the quality of financial reports when FDIs have entered the market. More inspections and reviews for audit firms have been conducted, and local auditing and accounting standards have been revised to be in compliance with international standards.

Our results have important implications for investors, regulatory authorities and governments in relation to the development, implementation and enforcement of international financial reporting and auditing standards.

Policymakers and regulators in Egypt have responded to international pressure by revitalizing their local accounting and auditing standards and adopting international financial reporting and auditing standards. The authors identify strategies that have been adopted by audit firms to face the FDIs’ challenges.

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The influence of foreign direct investment on the Egyptian audit market: what do Big 4 partners’ perceptions tell us?10.1108/JFRA-04-2022-0117Journal of Financial Reporting and Accounting2022-06-20© 2022 Emerald Publishing LimitedMohamed Khaled EldalyAhmed A. ElamerMagdy Abdel-KaderJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-06-2010.1108/JFRA-04-2022-0117https://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2022-0117/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
Political patronage, and banks’ profitability in Bahrainhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2022-0118/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to contribute to the political connection literature by investigating the impact of political connection on banks’ profitability in Bahrain. Exploiting the unique natural experiment of the 2017 Qatar blockade crisis, this study uses primary data of political connection. The study uses the difference-in-difference (DID) methodology to investigate the effect of political connections on banks’ profitability. The main finding is that political connections have a positive effect on bank profitability in Bahrain. The paper finds that the ongoing GCC crisis has had a negative effect on the banking sector of Bahrain. During the Qatar blockade crisis, politically connected banks suffered more than their non-connected counterparts. The result suggests that the Qatar blockade crisis has had a notable effect on the banking system throughout the region, including both the boycotting countries as well as Qatar. In the banking sector, politically connected banks are the most harmed by the crisis. Investors can enhance their hedging and investment decisions by exploiting knowledge of how political connections affected bank profitability during the Qatar diplomatic crisis and how that effect can be transmitted from one market to another. In addition, regulators could use insights about the association between political connections and profitability in Bahrain to undertake strategies to increase banks’ profitability and mitigate the transmission effect of a crisis by ensuring adequate regulation and supervision. This paper offers four novel contributions to political connection literature as follows: Firstly, the study fills in an important gap in the literature as it is the first attempt to quantify the impact of political connections on bank performance in Bahrain. To the best of the authors’ knowledge, the role of political factors in Bahrain has not been studied about the banking system. Secondly, the study depends on primary data about political connections collected manually from various sources. Thirdly, this is the first study to investigate the effect of the Qatar blockade on the banking sector. Lastly, the evidence suggests that politically connected banks are more profitable than banks that lack political connections. However, the Qatar blockade crisis resulted in a sharp decrease in bank profitability, suggesting that the crisis significantly harmed the banking sector in Bahrain.Political patronage, and banks’ profitability in Bahrain
Fatma Ehab Ahmed, Ahmed Gamal Mohamed
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to contribute to the political connection literature by investigating the impact of political connection on banks’ profitability in Bahrain.

Exploiting the unique natural experiment of the 2017 Qatar blockade crisis, this study uses primary data of political connection. The study uses the difference-in-difference (DID) methodology to investigate the effect of political connections on banks’ profitability.

The main finding is that political connections have a positive effect on bank profitability in Bahrain. The paper finds that the ongoing GCC crisis has had a negative effect on the banking sector of Bahrain. During the Qatar blockade crisis, politically connected banks suffered more than their non-connected counterparts.

The result suggests that the Qatar blockade crisis has had a notable effect on the banking system throughout the region, including both the boycotting countries as well as Qatar. In the banking sector, politically connected banks are the most harmed by the crisis. Investors can enhance their hedging and investment decisions by exploiting knowledge of how political connections affected bank profitability during the Qatar diplomatic crisis and how that effect can be transmitted from one market to another. In addition, regulators could use insights about the association between political connections and profitability in Bahrain to undertake strategies to increase banks’ profitability and mitigate the transmission effect of a crisis by ensuring adequate regulation and supervision.

This paper offers four novel contributions to political connection literature as follows: Firstly, the study fills in an important gap in the literature as it is the first attempt to quantify the impact of political connections on bank performance in Bahrain. To the best of the authors’ knowledge, the role of political factors in Bahrain has not been studied about the banking system. Secondly, the study depends on primary data about political connections collected manually from various sources. Thirdly, this is the first study to investigate the effect of the Qatar blockade on the banking sector. Lastly, the evidence suggests that politically connected banks are more profitable than banks that lack political connections. However, the Qatar blockade crisis resulted in a sharp decrease in bank profitability, suggesting that the crisis significantly harmed the banking sector in Bahrain.

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Political patronage, and banks’ profitability in Bahrain10.1108/JFRA-04-2022-0118Journal of Financial Reporting and Accounting2023-05-11© 2023 Emerald Publishing LimitedFatma Ehab AhmedAhmed Gamal MohamedJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-05-1110.1108/JFRA-04-2022-0118https://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2022-0118/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The effect of anti-money laundering regulations on earnings management: evidence of Iranhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2022-0119/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe purpose of this study is to examine the impact of anti-money laundering (AML) regulations on accrual earnings management (AEM) and real earnings management (REM) in Iran’s emerging capital market. The panel data regression is used to testing hypotheses. The sample includes 2,020 data and 202 companies listed on the Tehran Stock Exchange (TSE) over a period of ten years from 2012 to 2021. Also, the companies covered in this study include financial and nonfinancial companies. Furthermore, the data related to the research variables were extracted from the annual financial statements and the TSE database. The results show that compliance with AML regulations leads to a reduction in AEM and REM. In other words, companies with higher money laundering (ML) tend to manage their earnings, which is in line with agency theory. This study has implication for policymakers and regulators, auditors and managers. Considering the negative impact of AML regulations on earnings management (EM), Iranian auditing firms need to emphasize on the full implementation of AML regulations in TSE. Also, the results of this research may aid policymakers and regulators to detect financial crimes through accounting signals. To the best of the authors’ knowledge, this is the first study in an Iran capital market to examine the impact of AML regulations on EM in financial and nonfinancial companies. Previous research has not controlled for the effects of financial companies. Prior studies have not examined the effects of financial companies. In addition, this study differentiates itself from previous studies by introducing a new method for measuring the independent ML variable based on auditor opinions. The obtained data can aid international bodies to better understand compliance with ML regulations in Iran and can reduce their concerns in negotiations.The effect of anti-money laundering regulations on earnings management: evidence of Iran
Shima Abdi, Afsaneh Soroushyar
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

The purpose of this study is to examine the impact of anti-money laundering (AML) regulations on accrual earnings management (AEM) and real earnings management (REM) in Iran’s emerging capital market.

The panel data regression is used to testing hypotheses. The sample includes 2,020 data and 202 companies listed on the Tehran Stock Exchange (TSE) over a period of ten years from 2012 to 2021. Also, the companies covered in this study include financial and nonfinancial companies. Furthermore, the data related to the research variables were extracted from the annual financial statements and the TSE database.

The results show that compliance with AML regulations leads to a reduction in AEM and REM. In other words, companies with higher money laundering (ML) tend to manage their earnings, which is in line with agency theory.

This study has implication for policymakers and regulators, auditors and managers. Considering the negative impact of AML regulations on earnings management (EM), Iranian auditing firms need to emphasize on the full implementation of AML regulations in TSE. Also, the results of this research may aid policymakers and regulators to detect financial crimes through accounting signals.

To the best of the authors’ knowledge, this is the first study in an Iran capital market to examine the impact of AML regulations on EM in financial and nonfinancial companies. Previous research has not controlled for the effects of financial companies. Prior studies have not examined the effects of financial companies. In addition, this study differentiates itself from previous studies by introducing a new method for measuring the independent ML variable based on auditor opinions. The obtained data can aid international bodies to better understand compliance with ML regulations in Iran and can reduce their concerns in negotiations.

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The effect of anti-money laundering regulations on earnings management: evidence of Iran10.1108/JFRA-04-2022-0119Journal of Financial Reporting and Accounting2022-11-28© Emerald Publishing LimitedShima AbdiAfsaneh SoroushyarJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-11-2810.1108/JFRA-04-2022-0119https://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2022-0119/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© Emerald Publishing Limited
The effect of compliance with AAOIFI standards on financial performance of Islamic bankshttps://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2022-0121/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis research study aims to examine the effect of the compliance with the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) standards on the performance of Islamic banks. The sample consists of 628 bank-year observations from eight countries that adopt the AAOIFI standards during the period 2009–2020. The findings reveal a significant positive relationship between the overall compliance level with AAOIFI standards and the two performance measures in Islamic banks. The findings are useful for various groups of preparers and users of Islamic banks’ annual reports, such as academics and researchers, accountants, management of Islamic banks and national and international organizations. This research provides new empirical evidence on the effect of compliance with AAOIFI standards (accounting and governance) on Islamic banks performance. In addition, the findings reveal that the examination of compliance level should not be restricted to an overall compliance index that contains all the AAOIFI standards, but should rather take into consideration the different types of these standards (accounting and governance).The effect of compliance with AAOIFI standards on financial performance of Islamic banks
Yosra Mnif, Marwa Tahari
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This research study aims to examine the effect of the compliance with the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) standards on the performance of Islamic banks.

The sample consists of 628 bank-year observations from eight countries that adopt the AAOIFI standards during the period 2009–2020.

The findings reveal a significant positive relationship between the overall compliance level with AAOIFI standards and the two performance measures in Islamic banks.

The findings are useful for various groups of preparers and users of Islamic banks’ annual reports, such as academics and researchers, accountants, management of Islamic banks and national and international organizations.

This research provides new empirical evidence on the effect of compliance with AAOIFI standards (accounting and governance) on Islamic banks performance. In addition, the findings reveal that the examination of compliance level should not be restricted to an overall compliance index that contains all the AAOIFI standards, but should rather take into consideration the different types of these standards (accounting and governance).

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The effect of compliance with AAOIFI standards on financial performance of Islamic banks10.1108/JFRA-04-2022-0121Journal of Financial Reporting and Accounting2023-04-26© 2023 Emerald Publishing LimitedYosra MnifMarwa TahariJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-04-2610.1108/JFRA-04-2022-0121https://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2022-0121/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The impact of board gender diversity on the financing costs of microfinance institutions: a global evidencehttps://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2022-0125/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestConsidering the existing evidence on the impact of female board members on the default risks of an organization, the purpose of this study is to investigate the effect of board gender diversity, alongside institutional characteristics and macroeconomic factors, on the financing costs of microfinance institutions (MFIs). This study collected unbalanced panel data of 1,190 unique MFIs between 2010 and 2018 from the World Bank. The collected data, which covers a total of 95 developing and emerging countries, was thereafter analyzed using the pooled ordinary least squares and random effects model. To overcome endogeneity and omitted variable bias (e.g. time-invariant variables), the authors have also used the generalized method of moments and fixed effects model, respectively. Different proxies of board gender diversity and sub-sample analysis by regions were further undertaken to examine the robustness of the obtained results. The findings of this study revealed that board gender diversity has a statistically significant negative effect on the financing costs of MFIs. This suggests that a gender-diverse board can generate cheaper funding for MFIs by minimizing their default risks through effective monitoring and strategic management. Furthermore, the negative impact of board gender diversity on financing costs appears to be more pronounced when there is a minimum of two female board members in the boardroom of MFIs. The results of this study remain consistent and valid regardless of alternate model specifications (e.g. sub-sample analysis, use of alternative proxies of board gender diversity and application of different estimators) and endogeneity issues. Ultimately, the findings in this study reiterate the importance of promoting and implementing gender diversity in the boardroom to minimize the financing costs of MFIs. This study investigated the relationship between board gender diversity and financing costs of MFIs by using relatively recent and global data. The minimum number of female board members required to significantly reduce the financing costs of MFIs was also identified.The impact of board gender diversity on the financing costs of microfinance institutions: a global evidence
Md Aslam Mia, Tanzina Hossain, Zinnatun Nesa, Md Khaled Saifullah, Rozina Akter, Md Imran Hossain
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

Considering the existing evidence on the impact of female board members on the default risks of an organization, the purpose of this study is to investigate the effect of board gender diversity, alongside institutional characteristics and macroeconomic factors, on the financing costs of microfinance institutions (MFIs).

This study collected unbalanced panel data of 1,190 unique MFIs between 2010 and 2018 from the World Bank. The collected data, which covers a total of 95 developing and emerging countries, was thereafter analyzed using the pooled ordinary least squares and random effects model. To overcome endogeneity and omitted variable bias (e.g. time-invariant variables), the authors have also used the generalized method of moments and fixed effects model, respectively. Different proxies of board gender diversity and sub-sample analysis by regions were further undertaken to examine the robustness of the obtained results.

The findings of this study revealed that board gender diversity has a statistically significant negative effect on the financing costs of MFIs. This suggests that a gender-diverse board can generate cheaper funding for MFIs by minimizing their default risks through effective monitoring and strategic management. Furthermore, the negative impact of board gender diversity on financing costs appears to be more pronounced when there is a minimum of two female board members in the boardroom of MFIs. The results of this study remain consistent and valid regardless of alternate model specifications (e.g. sub-sample analysis, use of alternative proxies of board gender diversity and application of different estimators) and endogeneity issues. Ultimately, the findings in this study reiterate the importance of promoting and implementing gender diversity in the boardroom to minimize the financing costs of MFIs.

This study investigated the relationship between board gender diversity and financing costs of MFIs by using relatively recent and global data. The minimum number of female board members required to significantly reduce the financing costs of MFIs was also identified.

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The impact of board gender diversity on the financing costs of microfinance institutions: a global evidence10.1108/JFRA-04-2022-0125Journal of Financial Reporting and Accounting2022-12-08© 2022 Emerald Publishing LimitedMd Aslam MiaTanzina HossainZinnatun NesaMd Khaled SaifullahRozina AkterMd Imran HossainJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-12-0810.1108/JFRA-04-2022-0125https://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2022-0125/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
Textual analysis of the annual report and corporate performance: evidence from Chinahttps://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2022-0129/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to examine the relationship between the readability of annual reports and corporate performance in Chinese listed firms. This research examined the annual report readability factors of Chinese listed companies by using a textual analysis method using Python to extract the text from the annual reports, convert it into numerical form to facilitate statistical analysis and then merge the results with data from the Chinese stock market to explain the impact on corporate performance and predict future earnings in the Chinese financial markets from 2008 to 2021. Study findings indicate that firms with better financial reporting readability are more profitable, incur lower agency costs and have low earnings in the Chinese stock markets when readability is low (i.e. more complexity and length of annual reports). It was also found that when a listed company has a good performance, it prefers to use a short space to explain its operating and financial status. More generally, the means of the report length are short, and accounting terms are used less frequently; in the case of a poor company, the annual report is particularly long and accounting terms are more frequently used. In the context of the COVID-19 crisis, this study served as a proxy measure of returns prior to the announcement of the COVID-19 pandemic. In addition, an instrumental variable approach is used, which helps results to remain robust and control for fixed effects and potential endogeneity problems. Although this study’s results cannot be generalised globally because of their limited scope, they can still be generalised across non-English speaking countries. Thus, future cross-country research is encouraged to examine the textual analysis of financial reports across those countries. This study conveys two messages to investors and policymakers within the Chinese market. First, investors ought to pay greater attention to the nonfinancial information contained in annual reports to improve the accuracy of their predictions regarding future firm performance. Second, Chinese policymakers are encouraged to instate a policy for the use of plain English in annual reports to make them more readable by international investors. This study contributes to the paucity of research that examines English-written annual reports in non-English speaking countries by examining the readability of annual reports in the Chinese market.Textual analysis of the annual report and corporate performance: evidence from China
Fahd Alduais
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to examine the relationship between the readability of annual reports and corporate performance in Chinese listed firms.

This research examined the annual report readability factors of Chinese listed companies by using a textual analysis method using Python to extract the text from the annual reports, convert it into numerical form to facilitate statistical analysis and then merge the results with data from the Chinese stock market to explain the impact on corporate performance and predict future earnings in the Chinese financial markets from 2008 to 2021.

Study findings indicate that firms with better financial reporting readability are more profitable, incur lower agency costs and have low earnings in the Chinese stock markets when readability is low (i.e. more complexity and length of annual reports). It was also found that when a listed company has a good performance, it prefers to use a short space to explain its operating and financial status. More generally, the means of the report length are short, and accounting terms are used less frequently; in the case of a poor company, the annual report is particularly long and accounting terms are more frequently used. In the context of the COVID-19 crisis, this study served as a proxy measure of returns prior to the announcement of the COVID-19 pandemic. In addition, an instrumental variable approach is used, which helps results to remain robust and control for fixed effects and potential endogeneity problems.

Although this study’s results cannot be generalised globally because of their limited scope, they can still be generalised across non-English speaking countries. Thus, future cross-country research is encouraged to examine the textual analysis of financial reports across those countries.

This study conveys two messages to investors and policymakers within the Chinese market. First, investors ought to pay greater attention to the nonfinancial information contained in annual reports to improve the accuracy of their predictions regarding future firm performance. Second, Chinese policymakers are encouraged to instate a policy for the use of plain English in annual reports to make them more readable by international investors.

This study contributes to the paucity of research that examines English-written annual reports in non-English speaking countries by examining the readability of annual reports in the Chinese market.

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Textual analysis of the annual report and corporate performance: evidence from China10.1108/JFRA-04-2022-0129Journal of Financial Reporting and Accounting2022-07-28© 2022 Emerald Publishing LimitedFahd AlduaisJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-07-2810.1108/JFRA-04-2022-0129https://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2022-0129/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
Corporate governance in Kuwait: joining the dots between regulatory reform, organisational change in boards and audit committees and firm market and accounting performancehttps://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2022-0133/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to examine the link between boards and audit committees and firm performance in Kuwaiti listed firms in the context of recent and extensive corporate governance regulatory reform. Panel data regression analysis with fixed effects and clustered standard errors of firm performance for 61–97 listed industrial and services firms in Kuwait over a seven-year period. The dependent variables are the returns on assets and equity, the debt-to-equity ratio and leverage and Tobin’s Q and the independent variables comprise board of directors and audit committee characteristics, including size, the number of meetings and the numbers of independent and outside board and expert committee members. Firm size, subsidiary status and cash flow serve as control variables. Mixed results with respect to the characteristics of the board of directors. Board size and independent and outsider board members positively relate only to Tobin’s Q and insiders only to debt to equity. For audit committee characteristics, committee size, independence and expertise positively relate to the return on equity and committee size and expertise only to Tobin’s Q. Of the five performance measures considered, board and audit committee characteristics together best determine Tobin’s Q. Data from a single country limits generalisability and control variables necessarily limited in a developing market context. Need for qualitative insights into corporate governance reform as a complement to conventional quantitative analysis. In combining accounting and market information, Tobin’s Q appears best able to recognise the performance benefits of good corporate governance in terms of internal organisational change. The recent corporate governance code and guidelines reforms exert a mixed impact on firm performance, with audit committees, not boards, of most influence. But recent reforms implied most change to boards of directors. One suggestion is that non-market reform may have been unneeded given existing market pressure on listed firms and firms anticipating regulatory change. Kuwait’s corporate governance reforms codified corporate governance practices already in place among many of its firms in pursuit of organisational legitimacy, and while invoking substantial change to audit committees, involved minor change to firm performance, at least in the short term. Some firms may also have delisted in expectation of stronger corporate governance requirements. Regardless, these direct and indirect processes both improved the overall quality of listed firm corporate governance and performance in Kuwait. Seminal analysis of corporate governance reforms in Kuwait, which have rapidly progressed from no corporate governance code and guidelines to an initially voluntary and then compulsory regime. Only known analysis to incorporate both board of directors and audit committee characteristics. Reveals studies of the corporate governance–firm performance relationship may face difficulty in model specification, and empirical significance, given the complexity of corporate governance codes and guidelines, leads in changing firm behaviour and self-selection of firms into and out of regulated markets.Corporate governance in Kuwait: joining the dots between regulatory reform, organisational change in boards and audit committees and firm market and accounting performance
Abdullah Alajmi, Andrew C. Worthington
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to examine the link between boards and audit committees and firm performance in Kuwaiti listed firms in the context of recent and extensive corporate governance regulatory reform.

Panel data regression analysis with fixed effects and clustered standard errors of firm performance for 61–97 listed industrial and services firms in Kuwait over a seven-year period. The dependent variables are the returns on assets and equity, the debt-to-equity ratio and leverage and Tobin’s Q and the independent variables comprise board of directors and audit committee characteristics, including size, the number of meetings and the numbers of independent and outside board and expert committee members. Firm size, subsidiary status and cash flow serve as control variables.

Mixed results with respect to the characteristics of the board of directors. Board size and independent and outsider board members positively relate only to Tobin’s Q and insiders only to debt to equity. For audit committee characteristics, committee size, independence and expertise positively relate to the return on equity and committee size and expertise only to Tobin’s Q. Of the five performance measures considered, board and audit committee characteristics together best determine Tobin’s Q.

Data from a single country limits generalisability and control variables necessarily limited in a developing market context. Need for qualitative insights into corporate governance reform as a complement to conventional quantitative analysis. In combining accounting and market information, Tobin’s Q appears best able to recognise the performance benefits of good corporate governance in terms of internal organisational change.

The recent corporate governance code and guidelines reforms exert a mixed impact on firm performance, with audit committees, not boards, of most influence. But recent reforms implied most change to boards of directors. One suggestion is that non-market reform may have been unneeded given existing market pressure on listed firms and firms anticipating regulatory change.

Kuwait’s corporate governance reforms codified corporate governance practices already in place among many of its firms in pursuit of organisational legitimacy, and while invoking substantial change to audit committees, involved minor change to firm performance, at least in the short term. Some firms may also have delisted in expectation of stronger corporate governance requirements. Regardless, these direct and indirect processes both improved the overall quality of listed firm corporate governance and performance in Kuwait.

Seminal analysis of corporate governance reforms in Kuwait, which have rapidly progressed from no corporate governance code and guidelines to an initially voluntary and then compulsory regime. Only known analysis to incorporate both board of directors and audit committee characteristics. Reveals studies of the corporate governance–firm performance relationship may face difficulty in model specification, and empirical significance, given the complexity of corporate governance codes and guidelines, leads in changing firm behaviour and self-selection of firms into and out of regulated markets.

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Corporate governance in Kuwait: joining the dots between regulatory reform, organisational change in boards and audit committees and firm market and accounting performance10.1108/JFRA-04-2022-0133Journal of Financial Reporting and Accounting2023-03-02© 2023 Emerald Publishing LimitedAbdullah AlajmiAndrew C. WorthingtonJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-03-0210.1108/JFRA-04-2022-0133https://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2022-0133/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Impact of mandatory IFRS adoption on foreign direct investment: the moderating role of conflict of interest regulationhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2022-0145/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to examine the moderating effect of conflict of interest regulation (CIR) on the relationship between mandatory of International Financial Reporting Standards (IFRS) adoption and foreign direct investment (FDI) in the Middle East and North Africa (MENA) region. The study was conducted based on panel data from 15 MENA countries during the period 2008–2020. Collected data were analyzed by using the generalized method of moments estimation technique. This study results show that both mandatory of IFRS adoption and CIR do not have a significant effect on FDI inflows in MENA region; however, their interaction has a positive and significant effect on FDI inflows. This implies that more development of CIR enhances the impact that mandatory of IFRS adoption has on FDI inflows. This study results are very useful to policymakers and regulators in the MENA region. The mandatory of IFRS adoption on its own does not improve significantly FDI inflows. The MENA countries should look inwards into more developed CIR that would support IFRS adoption to attract more FDI. To the best of the author’s knowledge, this is the first research study to investigate the moderating effect of CIR on the relationship between mandatory of IFRS adoption and FDI inflows. In addition, the empirical researches on the effect of mandatory of IFRS adoption as issued by the International Accounting Standards Board (IASB) on FDI inflows for MENA countries are almost absent.Impact of mandatory IFRS adoption on foreign direct investment: the moderating role of conflict of interest regulation
Azzouz Elhamma
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to examine the moderating effect of conflict of interest regulation (CIR) on the relationship between mandatory of International Financial Reporting Standards (IFRS) adoption and foreign direct investment (FDI) in the Middle East and North Africa (MENA) region.

The study was conducted based on panel data from 15 MENA countries during the period 2008–2020. Collected data were analyzed by using the generalized method of moments estimation technique.

This study results show that both mandatory of IFRS adoption and CIR do not have a significant effect on FDI inflows in MENA region; however, their interaction has a positive and significant effect on FDI inflows. This implies that more development of CIR enhances the impact that mandatory of IFRS adoption has on FDI inflows.

This study results are very useful to policymakers and regulators in the MENA region. The mandatory of IFRS adoption on its own does not improve significantly FDI inflows. The MENA countries should look inwards into more developed CIR that would support IFRS adoption to attract more FDI.

To the best of the author’s knowledge, this is the first research study to investigate the moderating effect of CIR on the relationship between mandatory of IFRS adoption and FDI inflows. In addition, the empirical researches on the effect of mandatory of IFRS adoption as issued by the International Accounting Standards Board (IASB) on FDI inflows for MENA countries are almost absent.

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Impact of mandatory IFRS adoption on foreign direct investment: the moderating role of conflict of interest regulation10.1108/JFRA-04-2022-0145Journal of Financial Reporting and Accounting2023-03-02© 2023 Emerald Publishing LimitedAzzouz ElhammaJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-03-0210.1108/JFRA-04-2022-0145https://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2022-0145/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Dividend policy and firm value: evidence of financial firms from Borsa Istanbul under the IFRS adoptionhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2022-0147/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to examine the effect of dividend policy on firm value for financial sector in an emerging country. Furthermore, it examines the moderating effect of IFRS adoption and the abolishment of mandatory dividend payment policy with considering the Lintner model of dividend smoothing. Data were collected from 111 firms listed on Borsa Istanbul in the financial sector in Turkey over 1995–2017. Using an explanatory research design, this study performs various multivariate regression techniques to investigate the proposed relationships. The outcomes demonstrate a positive and significant association between dividend policy and firm value. In addition, the relationship has strengthened after IFRS adoption, indicating that accounting information such as dividend-based ratios prepared under IFRS is more value relevant. The empirical outcomes supported the Lintner model, which is persistent with the signalling hypothesis. Moreover, the findings state that the abolishment of mandatory dividend payment in 2009 strengthened the association between dividend policy and firm value for financial institutions in Turkey. These results provide an insight to the investors and managers that the effect of IFRS adoption and other policy changes could be greater on the association between dividend policy and firm value. The study empirically tests Lintner model of dividend smoothing for financial firms in an emerging economy. This study contributes to the literature through providing vital insights on the relationship between dividend policy and firm value and empirically revisiting the Lintner model for financial sector in a developing economy, specifically Turkey. Furthermore, it addresses the influence of IFRS implementation on the association between dividend policy and firm value. These findings are robust to alternative sampling methods and to controlling for other factors which influence firm value.Dividend policy and firm value: evidence of financial firms from Borsa Istanbul under the IFRS adoption
Hariem Abdullah, Aliya Zhakanova Isiksal, Razha Rasul
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to examine the effect of dividend policy on firm value for financial sector in an emerging country. Furthermore, it examines the moderating effect of IFRS adoption and the abolishment of mandatory dividend payment policy with considering the Lintner model of dividend smoothing.

Data were collected from 111 firms listed on Borsa Istanbul in the financial sector in Turkey over 1995–2017. Using an explanatory research design, this study performs various multivariate regression techniques to investigate the proposed relationships.

The outcomes demonstrate a positive and significant association between dividend policy and firm value. In addition, the relationship has strengthened after IFRS adoption, indicating that accounting information such as dividend-based ratios prepared under IFRS is more value relevant. The empirical outcomes supported the Lintner model, which is persistent with the signalling hypothesis. Moreover, the findings state that the abolishment of mandatory dividend payment in 2009 strengthened the association between dividend policy and firm value for financial institutions in Turkey.

These results provide an insight to the investors and managers that the effect of IFRS adoption and other policy changes could be greater on the association between dividend policy and firm value. The study empirically tests Lintner model of dividend smoothing for financial firms in an emerging economy.

This study contributes to the literature through providing vital insights on the relationship between dividend policy and firm value and empirically revisiting the Lintner model for financial sector in a developing economy, specifically Turkey. Furthermore, it addresses the influence of IFRS implementation on the association between dividend policy and firm value. These findings are robust to alternative sampling methods and to controlling for other factors which influence firm value.

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Dividend policy and firm value: evidence of financial firms from Borsa Istanbul under the IFRS adoption10.1108/JFRA-04-2022-0147Journal of Financial Reporting and Accounting2023-03-07© Emerald Publishing LimitedHariem AbdullahAliya Zhakanova IsiksalRazha RasulJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-03-0710.1108/JFRA-04-2022-0147https://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2022-0147/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© Emerald Publishing Limited
The effect of contractual and behavioral CEO attributes on aggressive tax avoidance: case of German-listed firms in HDAXhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2022-0158/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to examine the effect of contractual factors and noncontractual factors on tax avoidance (TA). The sample comprises 400 firm-year observations of 67 companies listed on the HDAX during the period 2008–2017. The generalized least square panel regression is applied. The study results confirm a significant effect of long-term chief executive officer (CEO) compensation incentives and CEO attributes on TA. Findings exhibit a significant impact of foreign CEO on TA, whereas an insider CEO mitigates TA. The results hold for several robustness tests, with lag effective tax rate as dependent variable and with splitting foreign CEO into European and non-European origin. First, the sample is limited to 400 firm-year observations and to the German context. For shareholders, the study provides first evidence on relationships between the geographical and internal versus external labor market for CEOs and TA. For researchers, the findings underline the importance of integrating behavioral approaches like place attachment theory and the rooting theory in the theory of TA. To the best of the authors’ knowledge, this is the first study to examine the impact of both contractual determinants and behavioral determinants on TA in the German context as an emerged economy with a dualistic corporate governance. This study contributes to the existing literature regarding the scientific debates about the impact of CEOs and CEO attributes on TA. It also analyses the balance between the place attachment theory and the rooting theory in the face of the compensation outcomes of agency theory.The effect of contractual and behavioral CEO attributes on aggressive tax avoidance: case of German-listed firms in HDAX
Souhir Neifar, Silke Huesing
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to examine the effect of contractual factors and noncontractual factors on tax avoidance (TA).

The sample comprises 400 firm-year observations of 67 companies listed on the HDAX during the period 2008–2017. The generalized least square panel regression is applied.

The study results confirm a significant effect of long-term chief executive officer (CEO) compensation incentives and CEO attributes on TA. Findings exhibit a significant impact of foreign CEO on TA, whereas an insider CEO mitigates TA. The results hold for several robustness tests, with lag effective tax rate as dependent variable and with splitting foreign CEO into European and non-European origin.

First, the sample is limited to 400 firm-year observations and to the German context. For shareholders, the study provides first evidence on relationships between the geographical and internal versus external labor market for CEOs and TA. For researchers, the findings underline the importance of integrating behavioral approaches like place attachment theory and the rooting theory in the theory of TA.

To the best of the authors’ knowledge, this is the first study to examine the impact of both contractual determinants and behavioral determinants on TA in the German context as an emerged economy with a dualistic corporate governance. This study contributes to the existing literature regarding the scientific debates about the impact of CEOs and CEO attributes on TA. It also analyses the balance between the place attachment theory and the rooting theory in the face of the compensation outcomes of agency theory.

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The effect of contractual and behavioral CEO attributes on aggressive tax avoidance: case of German-listed firms in HDAX10.1108/JFRA-04-2022-0158Journal of Financial Reporting and Accounting2023-06-02© 2023 Emerald Publishing LimitedSouhir NeifarSilke HuesingJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-06-0210.1108/JFRA-04-2022-0158https://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2022-0158/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Intellectual capital and bank’s performance: a cross-national approachhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2023-0172/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to identify the impact of intellectual capital (IC) on the bank’s performance using a cross-country approach with India and Gulf Cooperation Council (GCC) countries using the Skandia navigator model (SNM). This study uses a mixed-methods research approach by taking financial and non-financial measures to assess the impact of the IC on the bank’s performance using the SNM. The study implies an analysis of the data from the top ten banks in India and twenty banks in GCC countries. The selection was done based on the volume of the bank’s business for three years (2019–2020, 2020–2021 and 2021–2022). The research has three main findings: there is a positive impact of IC on the bank’s performance; amongst the factors of SNM, there is a direct impact of human capital and customer focus on the performance of the selected banks in both India and GCC countries; and the other factors of SNM such as structural capital and process focus, renewal and development focus also affect the selected banks. The outcomes of the research may be useful for policymakers in India and GCC countries, as it identifies IC components that have a significant impact on the bank’s performance. This might enable them to develop policies that foster such factors, which, consequently, will improve the performance of the banks in the selected countries. This study is an attempt to fill the gap in the existing literature on IC and bank’s performance for two different types of countries using the SNM.Intellectual capital and bank’s performance: a cross-national approach
Gopalakrishnan Chinnasamy, Araby Madbouly, S. Vinoth, Preetha Chandran
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to identify the impact of intellectual capital (IC) on the bank’s performance using a cross-country approach with India and Gulf Cooperation Council (GCC) countries using the Skandia navigator model (SNM).

This study uses a mixed-methods research approach by taking financial and non-financial measures to assess the impact of the IC on the bank’s performance using the SNM. The study implies an analysis of the data from the top ten banks in India and twenty banks in GCC countries. The selection was done based on the volume of the bank’s business for three years (2019–2020, 2020–2021 and 2021–2022).

The research has three main findings: there is a positive impact of IC on the bank’s performance; amongst the factors of SNM, there is a direct impact of human capital and customer focus on the performance of the selected banks in both India and GCC countries; and the other factors of SNM such as structural capital and process focus, renewal and development focus also affect the selected banks.

The outcomes of the research may be useful for policymakers in India and GCC countries, as it identifies IC components that have a significant impact on the bank’s performance. This might enable them to develop policies that foster such factors, which, consequently, will improve the performance of the banks in the selected countries.

This study is an attempt to fill the gap in the existing literature on IC and bank’s performance for two different types of countries using the SNM.

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Intellectual capital and bank’s performance: a cross-national approach10.1108/JFRA-04-2023-0172Journal of Financial Reporting and Accounting2023-10-16© 2023 Emerald Publishing LimitedGopalakrishnan ChinnasamyAraby MadboulyS. VinothPreetha ChandranJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-10-1610.1108/JFRA-04-2023-0172https://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2023-0172/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
CEO age, financial reporting quality, and the role of clawback provisionshttps://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2023-0176/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestMotivated by rapidly increasing CEO age in the USA, the purpose of this study is to analyze the effect of CEO age on financial reporting quality and consider the moderating role of clawback provisions. This study uses a data set of 18,492 US firm-year observations from 2003 to 2019. Financial reporting quality is proxied with accruals-based and real activities earnings management measures, and with financial statement irregularities, measured by applying Benford’s law to financial statement line items. A number of sensitivity tests are conducted including the use of an instrumental variable. The results provide evidence that financial statement irregularities are more prevalent when CEOs are older, and they suggest a complex relation between CEO age and real activities earnings management. The results also suggest that the effect of CEO age on financial reporting quality is moderated by the presence of clawback provisions which became mandatory for US-listed firms in October 2022. This study is the first, to the best of the authors’ knowledge, to consider the effect of CEO age on financial statement irregularities and earnings management. This study has important implications for stakeholders evaluating the determinants of financial reporting quality, for boards of directors considering CEO age limitations and for policymakers considering mandating clawback provisions, which recently occurred in the USA.CEO age, financial reporting quality, and the role of clawback provisions
Justin G. Davis, Miguel Garcia-Cestona
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

Motivated by rapidly increasing CEO age in the USA, the purpose of this study is to analyze the effect of CEO age on financial reporting quality and consider the moderating role of clawback provisions.

This study uses a data set of 18,492 US firm-year observations from 2003 to 2019. Financial reporting quality is proxied with accruals-based and real activities earnings management measures, and with financial statement irregularities, measured by applying Benford’s law to financial statement line items. A number of sensitivity tests are conducted including the use of an instrumental variable.

The results provide evidence that financial statement irregularities are more prevalent when CEOs are older, and they suggest a complex relation between CEO age and real activities earnings management. The results also suggest that the effect of CEO age on financial reporting quality is moderated by the presence of clawback provisions which became mandatory for US-listed firms in October 2022.

This study is the first, to the best of the authors’ knowledge, to consider the effect of CEO age on financial statement irregularities and earnings management. This study has important implications for stakeholders evaluating the determinants of financial reporting quality, for boards of directors considering CEO age limitations and for policymakers considering mandating clawback provisions, which recently occurred in the USA.

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CEO age, financial reporting quality, and the role of clawback provisions10.1108/JFRA-04-2023-0176Journal of Financial Reporting and Accounting2023-11-27© 2023 Emerald Publishing LimitedJustin G. DavisMiguel Garcia-CestonaJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-11-2710.1108/JFRA-04-2023-0176https://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2023-0176/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Integrating forensic accounting in education and practices to detect and prevent fraud and misstatement: case study of Jordanian public sectorhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2023-0177/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to examine the degree of consciousness of forensic accounting (FA) in Jordan. This study surveys practitioners and academicians about their views and thoughts toward the expected role of using FA techniques to detecting and preventing fraud practices and shedding more light on advantages and obstacles of using the FA techniques. To collect the data, a questionnaire was constructed and distributed to the study population which consists of accounting academics, students and accounting practitioners. The results of this study show evidence that both students and professionals have a lower level of awareness on the FA concept and its importance. The results also confirm there is a significant correlation between, fraud prevention and detection, advantages of the application of FA, the training courses toward the application of FA and the application of FA in the context of Jordan. It has also been confirmed that there is a number of significant factors hinders this implementation in Jordan. The findings of this study offer many policy implications for regulators and policymakers on the needed relevant information to address and implement FA in education and practice, thereby activating the FA concept in Jordan. The primary motivation of this study is driven by the limited and inconclusive research on the FA as a monitoring tool, notably there is a high possibility of fraud and misstatement practices due to the agency conflict. This study is the first of its kind to discuss this topic in the context of Jordan. The need to integrating the accounting education within accounting profession regarding FA becomes an urgent need to develop the awareness level of practitioners when it comes to practice of FA.Integrating forensic accounting in education and practices to detect and prevent fraud and misstatement: case study of Jordanian public sector
Esraa Esam Alharasis, Hossam Haddad, Mohammad Alhadab, Maha Shehadeh, Elina F. Hasan
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to examine the degree of consciousness of forensic accounting (FA) in Jordan. This study surveys practitioners and academicians about their views and thoughts toward the expected role of using FA techniques to detecting and preventing fraud practices and shedding more light on advantages and obstacles of using the FA techniques.

To collect the data, a questionnaire was constructed and distributed to the study population which consists of accounting academics, students and accounting practitioners.

The results of this study show evidence that both students and professionals have a lower level of awareness on the FA concept and its importance. The results also confirm there is a significant correlation between, fraud prevention and detection, advantages of the application of FA, the training courses toward the application of FA and the application of FA in the context of Jordan. It has also been confirmed that there is a number of significant factors hinders this implementation in Jordan.

The findings of this study offer many policy implications for regulators and policymakers on the needed relevant information to address and implement FA in education and practice, thereby activating the FA concept in Jordan.

The primary motivation of this study is driven by the limited and inconclusive research on the FA as a monitoring tool, notably there is a high possibility of fraud and misstatement practices due to the agency conflict. This study is the first of its kind to discuss this topic in the context of Jordan. The need to integrating the accounting education within accounting profession regarding FA becomes an urgent need to develop the awareness level of practitioners when it comes to practice of FA.

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Integrating forensic accounting in education and practices to detect and prevent fraud and misstatement: case study of Jordanian public sector10.1108/JFRA-04-2023-0177Journal of Financial Reporting and Accounting2023-08-23© 2023 Emerald Publishing LimitedEsraa Esam AlharasisHossam HaddadMohammad AlhadabMaha ShehadehElina F. HasanJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-08-2310.1108/JFRA-04-2023-0177https://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2023-0177/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Factors affecting accounting students’ misuse of chatgpt: an application of the fraud triangle theoryhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2023-0182/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to explore the factors that contribute to student academic dishonesty through an examination of the misuse of AI language models. Using the fraud triangle theory, which posits that opportunity, rationalization and pressure are key factors for fraudulent behavior, this study investigates how these elements interact and contribute to academic dishonesty among students. In this study, data on how accounting students used ChatGPT to cheat was acquired from 279 accounting students in Jordanian public universities over the course of two months, from January 2023 to March 2023, through previously tested and validated questionnaires. The main tool for gathering data was a questionnaire distributed online using Microsoft Forms. The results show that all of the fraud triangle factors are significant determinants of student academic dishonesty and student misuse of ChatGPT. The findings of this research can be used to guide the development of technology-based preventative measures. This study provides valuable insights into the motivations and factors that drive students to engage in academic dishonesty and sheds light on the broader issue of technology-assisted academic dishonesty and its impact on the educational system. This study’s contribution is significant, as it sheds light on a pressing issue in education and provides valuable information for educators and policymakers to address the problem and improve academic standards.Factors affecting accounting students’ misuse of chatgpt: an application of the fraud triangle theory
Hashem Alshurafat, Mohannad Obeid Al Shbail, Allam Hamdan, Ahmad Al-Dmour, Waed Ensour
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to explore the factors that contribute to student academic dishonesty through an examination of the misuse of AI language models. Using the fraud triangle theory, which posits that opportunity, rationalization and pressure are key factors for fraudulent behavior, this study investigates how these elements interact and contribute to academic dishonesty among students.

In this study, data on how accounting students used ChatGPT to cheat was acquired from 279 accounting students in Jordanian public universities over the course of two months, from January 2023 to March 2023, through previously tested and validated questionnaires. The main tool for gathering data was a questionnaire distributed online using Microsoft Forms.

The results show that all of the fraud triangle factors are significant determinants of student academic dishonesty and student misuse of ChatGPT. The findings of this research can be used to guide the development of technology-based preventative measures.

This study provides valuable insights into the motivations and factors that drive students to engage in academic dishonesty and sheds light on the broader issue of technology-assisted academic dishonesty and its impact on the educational system. This study’s contribution is significant, as it sheds light on a pressing issue in education and provides valuable information for educators and policymakers to address the problem and improve academic standards.

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Factors affecting accounting students’ misuse of chatgpt: an application of the fraud triangle theory10.1108/JFRA-04-2023-0182Journal of Financial Reporting and Accounting2023-10-19© 2023 Emerald Publishing LimitedHashem AlshurafatMohannad Obeid Al ShbailAllam HamdanAhmad Al-DmourWaed EnsourJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-10-1910.1108/JFRA-04-2023-0182https://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2023-0182/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Islamic corporate governance quality and value relevance of accounting information in Islamic bankshttps://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2023-0183/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe study aims to investigate the Shari’ah governance quality effectiveness, at the bank and national levels, on the value relevance of Islamic banks’ (IBs’) earning per share and book value per share. Quantitative analyses are conducted using a panel of 40 listed IBs from 12 countries during 2012–2019. Data were retrieved from the Refinitiv Eikon database and banks’ annual reports. The findings suggest that Shari’ah supervisory boards’ attributes negatively influence the value relevance of accounting information while the internal procedures positively impact it. The results also provide evidence of a complementary effect between Shari’ah governance mechanisms at the bank and national levels on the value relevance of accounting information. IBs’ boards and managers need to be more aware of the role of Shari’ah governance and its impact on value relevance. The observed complementarity between Shari’ah governance systems at the bank and national levels may incite regulators to include comprehensive Shari’ah governance regulations in their best practices. Strengthening collaboration between regulators and the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) is also required to create an enabling environment for investors to rely on the AAOIFI accounting standards in their investment decision-making process. Existing studies tend to ignore the effectiveness of Shari’ah governance quality at the bank level on value relevance. There is a similar lack of empirical research on the effectiveness of the centralized Shari’ah governance scheme on accounting issues.Islamic corporate governance quality and value relevance of accounting information in Islamic banks
Kaouther Toumi, Amal Hamrouni
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

The study aims to investigate the Shari’ah governance quality effectiveness, at the bank and national levels, on the value relevance of Islamic banks’ (IBs’) earning per share and book value per share.

Quantitative analyses are conducted using a panel of 40 listed IBs from 12 countries during 2012–2019. Data were retrieved from the Refinitiv Eikon database and banks’ annual reports.

The findings suggest that Shari’ah supervisory boards’ attributes negatively influence the value relevance of accounting information while the internal procedures positively impact it. The results also provide evidence of a complementary effect between Shari’ah governance mechanisms at the bank and national levels on the value relevance of accounting information.

IBs’ boards and managers need to be more aware of the role of Shari’ah governance and its impact on value relevance. The observed complementarity between Shari’ah governance systems at the bank and national levels may incite regulators to include comprehensive Shari’ah governance regulations in their best practices. Strengthening collaboration between regulators and the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) is also required to create an enabling environment for investors to rely on the AAOIFI accounting standards in their investment decision-making process.

Existing studies tend to ignore the effectiveness of Shari’ah governance quality at the bank level on value relevance. There is a similar lack of empirical research on the effectiveness of the centralized Shari’ah governance scheme on accounting issues.

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Islamic corporate governance quality and value relevance of accounting information in Islamic banks10.1108/JFRA-04-2023-0183Journal of Financial Reporting and Accounting2023-07-18© 2023 Emerald Publishing LimitedKaouther ToumiAmal HamrouniJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-07-1810.1108/JFRA-04-2023-0183https://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2023-0183/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Product market competition, investor protection and analysts’ earnings forecastshttps://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2023-0184/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to examine the effects of product market competition (PMC) on analysts’ earnings forecast attributes, particularly forecast accuracy and dispersion. The authors also investigate whether investor protection moderates the relationship between PMC and forecast attributes. The sample covers 49,578 firm-year observations from 38 countries. This study uses an ordinary least squares regression, a Heckman two-stage regression and an instrumental two-stage least squares regression. This study finds that PMC is associated with higher forecast accuracy and lower dispersion. The results also show that investor protection enhances the effect of PMC on forecast accuracy and dispersion. These findings imply that countries with strong investor protection have a better information environment, as exhibited by the stronger relationship between PMC and analysts’ forecast properties. The findings highlight the importance of strong governance mechanisms in both the country and industry environments. Policymakers, including government agencies and financial regulators, can leverage these insights to formulate regulations that promote competition, ensure investor protection and facilitate informed investment decisions. This study advances our understanding of how PMC affects analysts’ earnings forecast attributes. In addition, it pioneers evidence of the moderating role of investor protection in the relationship between PMC and forecast attributes.Product market competition, investor protection and analysts’ earnings forecasts
Khairul Anuar Kamarudin, Wan Adibah Wan Ismail, Larelle Chapple, Thu Phuong Truong
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to examine the effects of product market competition (PMC) on analysts’ earnings forecast attributes, particularly forecast accuracy and dispersion. The authors also investigate whether investor protection moderates the relationship between PMC and forecast attributes.

The sample covers 49,578 firm-year observations from 38 countries. This study uses an ordinary least squares regression, a Heckman two-stage regression and an instrumental two-stage least squares regression.

This study finds that PMC is associated with higher forecast accuracy and lower dispersion. The results also show that investor protection enhances the effect of PMC on forecast accuracy and dispersion. These findings imply that countries with strong investor protection have a better information environment, as exhibited by the stronger relationship between PMC and analysts’ forecast properties.

The findings highlight the importance of strong governance mechanisms in both the country and industry environments. Policymakers, including government agencies and financial regulators, can leverage these insights to formulate regulations that promote competition, ensure investor protection and facilitate informed investment decisions.

This study advances our understanding of how PMC affects analysts’ earnings forecast attributes. In addition, it pioneers evidence of the moderating role of investor protection in the relationship between PMC and forecast attributes.

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Product market competition, investor protection and analysts’ earnings forecasts10.1108/JFRA-04-2023-0184Journal of Financial Reporting and Accounting2023-12-26© 2023 Emerald Publishing LimitedKhairul Anuar KamarudinWan Adibah Wan IsmailLarelle ChappleThu Phuong TruongJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-12-2610.1108/JFRA-04-2023-0184https://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2023-0184/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Audit consortium impact on audit quality assessment: evidence from Egypthttps://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2023-0192/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestAudit consortium of joint and dual audits is one of the most controversial mechanisms aimed at improving audit quality and resolving several related debatable issues. This study aims to empirically investigate the impact of audit consortium on audit quality assessment in Egypt. It specifically examines whether audit opinion modification level is triggered by joint and dual audits existence and whether it is influenced by the relative importance of the auditor pair combination types. A sample of companies listed on the Egyptian Stock Exchange constituting the EGX 30 index is examined over a period of five years, from 2016 to 2020. A quantitative research methodology is used, using content analysis of companies’ audit reports and carrying out longitudinal panel ordinary least squares multiple regression tests. Results show that audit quality is significantly enhanced by conducting joint and dual audits of Egyptian companies’ financial statements. Findings indicate that both joint and dual audits significantly increase auditors’ propensity to modify audit opinions as compared to companies that engage in single audits. However, this increase in audit quality is not supported by the presence of Big 4 joint auditors or affiliated joint auditors, while the impact of Big 4 dual auditors cannot be confirmed. Nevertheless, such a potential increase in audit opinion modification is boosted by the presence of affiliated dual auditors, which appears to translate into higher quality. The study has important implications for researchers, corporates, those charged with governance, financial statement users, auditors, regulators and standard setters, who might be interested in whether an audit consortium and a particular auditor pair combination are associated with superior audit quality. It provides empirical evidence that might contribute to the continuous challenge of promoting the quality and effectiveness of the external audit. This study adds to the relatively limited and challenging literature on the potential contribution of audit consortium, using audit opinion modification level as a direct assessment of audit quality. It extends the scope of prior research by examining the existence of joint and dual audits and the relative importance of joint and dual auditor pair combination types. The study provides key insights from a distinctive and complex emerging audit market.Audit consortium impact on audit quality assessment: evidence from Egypt
Rania AbuRaya
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

Audit consortium of joint and dual audits is one of the most controversial mechanisms aimed at improving audit quality and resolving several related debatable issues. This study aims to empirically investigate the impact of audit consortium on audit quality assessment in Egypt. It specifically examines whether audit opinion modification level is triggered by joint and dual audits existence and whether it is influenced by the relative importance of the auditor pair combination types.

A sample of companies listed on the Egyptian Stock Exchange constituting the EGX 30 index is examined over a period of five years, from 2016 to 2020. A quantitative research methodology is used, using content analysis of companies’ audit reports and carrying out longitudinal panel ordinary least squares multiple regression tests.

Results show that audit quality is significantly enhanced by conducting joint and dual audits of Egyptian companies’ financial statements. Findings indicate that both joint and dual audits significantly increase auditors’ propensity to modify audit opinions as compared to companies that engage in single audits. However, this increase in audit quality is not supported by the presence of Big 4 joint auditors or affiliated joint auditors, while the impact of Big 4 dual auditors cannot be confirmed. Nevertheless, such a potential increase in audit opinion modification is boosted by the presence of affiliated dual auditors, which appears to translate into higher quality.

The study has important implications for researchers, corporates, those charged with governance, financial statement users, auditors, regulators and standard setters, who might be interested in whether an audit consortium and a particular auditor pair combination are associated with superior audit quality. It provides empirical evidence that might contribute to the continuous challenge of promoting the quality and effectiveness of the external audit.

This study adds to the relatively limited and challenging literature on the potential contribution of audit consortium, using audit opinion modification level as a direct assessment of audit quality. It extends the scope of prior research by examining the existence of joint and dual audits and the relative importance of joint and dual auditor pair combination types. The study provides key insights from a distinctive and complex emerging audit market.

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Audit consortium impact on audit quality assessment: evidence from Egypt10.1108/JFRA-04-2023-0192Journal of Financial Reporting and Accounting2023-10-02© 2023 Emerald Publishing LimitedRania AbuRayaJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-10-0210.1108/JFRA-04-2023-0192https://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2023-0192/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Risk governance and risk disclosure quality: an empirical evidencehttps://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2023-0198/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestIn recent time, stakeholders have called on corporate organizations to develop risk governance (RG) model that could strengthen effective risk disclosure quality (RDQ). Based on this premise, the purpose of this study is to examine the influence of RG on RD quality of 120 corporate organizations. RG was measured by board risk committee size, board risk committee independence, board risk committee gender diversity, board risk committee expertise, board risk committee effectiveness, chief risk officer (CRO) presence and enterprise risk management (ERM) framework. This study has used both ordered logistic regression and probit regression to analyze the data set. The number of members on the board risk committee, the proportion of women on that committee, the board expertise, the committee’s effectiveness, the presence of a CRO and the existence of an ERM framework were all found to have an impact on the quality of the risk information disclosed. The study emphasizes the need for strong collaboration between the corporate board and external assurance in enhancing the quality of RD. The findings contribute to growing literature in the area of RG and RD in Nigeria and by extension other sub-Saharan African countries.Risk governance and risk disclosure quality: an empirical evidence
Olayinka Erin, Johnson Ifeanyi Okoh, Nkiru Okika
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

In recent time, stakeholders have called on corporate organizations to develop risk governance (RG) model that could strengthen effective risk disclosure quality (RDQ). Based on this premise, the purpose of this study is to examine the influence of RG on RD quality of 120 corporate organizations.

RG was measured by board risk committee size, board risk committee independence, board risk committee gender diversity, board risk committee expertise, board risk committee effectiveness, chief risk officer (CRO) presence and enterprise risk management (ERM) framework. This study has used both ordered logistic regression and probit regression to analyze the data set.

The number of members on the board risk committee, the proportion of women on that committee, the board expertise, the committee’s effectiveness, the presence of a CRO and the existence of an ERM framework were all found to have an impact on the quality of the risk information disclosed.

The study emphasizes the need for strong collaboration between the corporate board and external assurance in enhancing the quality of RD.

The findings contribute to growing literature in the area of RG and RD in Nigeria and by extension other sub-Saharan African countries.

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Risk governance and risk disclosure quality: an empirical evidence10.1108/JFRA-04-2023-0198Journal of Financial Reporting and Accounting2023-10-09© 2023 Emerald Publishing LimitedOlayinka ErinJohnson Ifeanyi OkohNkiru OkikaJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-10-0910.1108/JFRA-04-2023-0198https://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2023-0198/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The interplay of financial reporting quality and investment efficiency: evidence from the USAhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2023-0199/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to comprehensively examine the relationship between financial reporting quality (FRQ) and investment efficiency (IE). The central thrust of this research endeavor is to empirically analyze the impact of FRQ on diverse facets of investment, including overinvestment, underinvestment and overall IE. Using a sample of 13,902 firm-year observations from publicly listed US companies, this study uses the generalized method of moment (GMM) in conjunction with three distinct measures for FRQ under three different investment settings, considering firm liquidity and industry performance. This study offers interesting insights into the intricate relationship between FRQ and IE. The results indicate a strong positive relation between the two constructs. In particular, the research reveals a negative link between FRQ and underinvestment, and an inverse relationship between FRQ and overinvestment. These findings suggest that FRQ is one of the key drivers of IE and that by enhancing FRQ, businesses can better optimize their investments. This study highlights the significant implication of the effect of FRQ on IE, as it enables businesses to optimize their investments by improving their decision-making processes and better risk assessment of associated projects, resulting in more efficient capital allocation. A higher degree of FRQ increases investors’ confidence in a company’s financial statements, resulting in higher liquidity. It can benefit regulators to set higher standards and promote transparency. The study examines the relationship between FRQ and IE. The study finds a strong positive relation between FRQ and IE, with FRQ being a key driver of IE. The paper’s original contribution lies in its comprehensive examination of the complex relationship between FRQ and IE, using robust analytical techniques by applying GMM and taking into consideration firms liquidity and industry performance.The interplay of financial reporting quality and investment efficiency: evidence from the USA
Nedal Assad, Aziz Jaafar, Panagiotis D. Zervopoulos
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to comprehensively examine the relationship between financial reporting quality (FRQ) and investment efficiency (IE). The central thrust of this research endeavor is to empirically analyze the impact of FRQ on diverse facets of investment, including overinvestment, underinvestment and overall IE.

Using a sample of 13,902 firm-year observations from publicly listed US companies, this study uses the generalized method of moment (GMM) in conjunction with three distinct measures for FRQ under three different investment settings, considering firm liquidity and industry performance.

This study offers interesting insights into the intricate relationship between FRQ and IE. The results indicate a strong positive relation between the two constructs. In particular, the research reveals a negative link between FRQ and underinvestment, and an inverse relationship between FRQ and overinvestment. These findings suggest that FRQ is one of the key drivers of IE and that by enhancing FRQ, businesses can better optimize their investments.

This study highlights the significant implication of the effect of FRQ on IE, as it enables businesses to optimize their investments by improving their decision-making processes and better risk assessment of associated projects, resulting in more efficient capital allocation. A higher degree of FRQ increases investors’ confidence in a company’s financial statements, resulting in higher liquidity. It can benefit regulators to set higher standards and promote transparency.

The study examines the relationship between FRQ and IE. The study finds a strong positive relation between FRQ and IE, with FRQ being a key driver of IE. The paper’s original contribution lies in its comprehensive examination of the complex relationship between FRQ and IE, using robust analytical techniques by applying GMM and taking into consideration firms liquidity and industry performance.

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The interplay of financial reporting quality and investment efficiency: evidence from the USA10.1108/JFRA-04-2023-0199Journal of Financial Reporting and Accounting2023-09-29© 2023 Emerald Publishing LimitedNedal AssadAziz JaafarPanagiotis D. ZervopoulosJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-09-2910.1108/JFRA-04-2023-0199https://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2023-0199/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Forensic accounting, socio-economic factors and value added tax evasion in emerging economies: evidence from Jordanhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2023-0202/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to determine the impact of forensic accounting, probability of detections, tax penalties, government spending, tax justice and tax ethics on value-added tax (VAT) evasion. The study uses partial least squares-structural equation modeling to examine the connection between tax sanction, probability of detection, tax ethics, tax justice, forensic accounting and government spending on VAT evasion based on 248 responses collected from the retail industry in Jordan. The findings also demonstrate that there is a negative correlation between tax sanctions, probability of detection, tax ethics, tax justice, forensic accounting, government spending and VAT evasion efficiency. The results, considering forensic accounting and government expenditure considerations, may emphasize the importance of the tax sanction, probability of detection, tax ethics, adoption of tax justice in the public sector and tax authority. Additionally, the findings are important for regulators and decision-makers in announcing new laws and strategies for VAT evasion. It turns out that the tax authority and public sector can definitely improve their capacity to protect public funds and limit VAT evasion practices within SMEs by adopting increased tax sanctions, probability of detection, tax ethics, tax justice, forensic accounting and government spending. Numerous studies have been conducted at the individual level in the context of income tax on the link between tax punishment, probability of detection, tax ethics, tax justice, forensic accounting and tax evasion. This study expands on the scant evidence of this connection to the retail business in the context of VAT avoidance. Additionally, it advances prior studies by integrating fresh elements, such as forensic accounting and government expenditure, that have never been considered in connection to VAT evasion in the retail sector.Forensic accounting, socio-economic factors and value added tax evasion in emerging economies: evidence from Jordan
Ahmad Farhan Alshira’h, Malek Hamed Alshirah, Abdalwali Lutfi
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to determine the impact of forensic accounting, probability of detections, tax penalties, government spending, tax justice and tax ethics on value-added tax (VAT) evasion.

The study uses partial least squares-structural equation modeling to examine the connection between tax sanction, probability of detection, tax ethics, tax justice, forensic accounting and government spending on VAT evasion based on 248 responses collected from the retail industry in Jordan.

The findings also demonstrate that there is a negative correlation between tax sanctions, probability of detection, tax ethics, tax justice, forensic accounting, government spending and VAT evasion efficiency.

The results, considering forensic accounting and government expenditure considerations, may emphasize the importance of the tax sanction, probability of detection, tax ethics, adoption of tax justice in the public sector and tax authority. Additionally, the findings are important for regulators and decision-makers in announcing new laws and strategies for VAT evasion.

It turns out that the tax authority and public sector can definitely improve their capacity to protect public funds and limit VAT evasion practices within SMEs by adopting increased tax sanctions, probability of detection, tax ethics, tax justice, forensic accounting and government spending.

Numerous studies have been conducted at the individual level in the context of income tax on the link between tax punishment, probability of detection, tax ethics, tax justice, forensic accounting and tax evasion. This study expands on the scant evidence of this connection to the retail business in the context of VAT avoidance. Additionally, it advances prior studies by integrating fresh elements, such as forensic accounting and government expenditure, that have never been considered in connection to VAT evasion in the retail sector.

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Forensic accounting, socio-economic factors and value added tax evasion in emerging economies: evidence from Jordan10.1108/JFRA-04-2023-0202Journal of Financial Reporting and Accounting2024-02-08© 2024 Emerald Publishing LimitedAhmad Farhan Alshira’hMalek Hamed AlshirahAbdalwali LutfiJournal of Financial Reporting and Accountingahead-of-printahead-of-print2024-02-0810.1108/JFRA-04-2023-0202https://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2023-0202/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Emerald Publishing Limited
Audit quality, firm value and audit fees: does audit tenure matter? Egyptian evidencehttps://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2023-0203/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to investigate the impact of audit fees on audit quality, the impact of audit quality on firm value and whether these effects are conditional on audit tenure by bringing evidence from an emerging market. Different regression techniques are used, such as logistic regression, probit regression, ordinary least squares regression and fixed effects regression. The authors used panel data of 80 nonfinancial Egyptian-listed firms over 2016–2020. The authors found a significant positive relationship between audit fees and audit quality and a significant positive relationship between audit quality and firm value. Furthermore, the authors found that the positive relationship between audit fees and audit quality is less pronounced for higher audit tenure firms. Finally, the authors also found that the positive relationship between audit quality and firm value is stronger for lower audit tenure firms. To the best of the authors’ knowledge, this is the first study to bring evidence from an emerging African market about the joint association between audit tenure, audit fees, audit quality and firm value. It provides beneficial insights to regulators regarding the possibility and the benefits of improving audit quality, which is critically needed in contexts with weak governance systems.Audit quality, firm value and audit fees: does audit tenure matter? Egyptian evidence
Saleh Aly Saleh Aly, Ahmed Diab, Samir Ibrahim Abdelazim
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to investigate the impact of audit fees on audit quality, the impact of audit quality on firm value and whether these effects are conditional on audit tenure by bringing evidence from an emerging market.

Different regression techniques are used, such as logistic regression, probit regression, ordinary least squares regression and fixed effects regression. The authors used panel data of 80 nonfinancial Egyptian-listed firms over 2016–2020.

The authors found a significant positive relationship between audit fees and audit quality and a significant positive relationship between audit quality and firm value. Furthermore, the authors found that the positive relationship between audit fees and audit quality is less pronounced for higher audit tenure firms. Finally, the authors also found that the positive relationship between audit quality and firm value is stronger for lower audit tenure firms.

To the best of the authors’ knowledge, this is the first study to bring evidence from an emerging African market about the joint association between audit tenure, audit fees, audit quality and firm value. It provides beneficial insights to regulators regarding the possibility and the benefits of improving audit quality, which is critically needed in contexts with weak governance systems.

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Audit quality, firm value and audit fees: does audit tenure matter? Egyptian evidence10.1108/JFRA-04-2023-0203Journal of Financial Reporting and Accounting2023-12-05© 2023 Emerald Publishing LimitedSaleh Aly Saleh AlyAhmed DiabSamir Ibrahim AbdelazimJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-12-0510.1108/JFRA-04-2023-0203https://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2023-0203/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The importance of perceived fairness regarding tax burden in compliance behavior: a qualitative study using the Delphi method in Moroccohttps://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2023-0213/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to understand the interaction between tax fairness perceptions, equitable tax burden distribution and tax compliance within Morocco’s unique socio-economic context, with the goal of uncovering strategies to enhance tax compliance. Using the Delphi method, this study engaged tax experts in the Moroccan context to explore the impact of taxpayers’ perception of fairness, tax rates and tax burden on compliance. Their responses were gathered and analyzed with the aid of IRaMuTeQ software, which helped the authors identify themes relevant to the research question. The preliminary results indicate a positive correlation between perceptions of tax fairness and compliance behavior, corroborating earlier studies conducted in different contexts. Notably, a substantial majority of Moroccan taxpayers perceive the current tax system as inequitable, deeming tax rates too high and the tax burden unfairly distributed among various taxpayer categories. This perception potentially influences their voluntary tax compliance behavior. The findings have significant policy implications for the Moroccan Government and stakeholders. They suggest that by improving tax fairness, particularly by aligning tax assessment and payment modalities for employees, civil servants and small to medium enterprises, policymakers can encourage higher voluntary tax compliance, thereby potentially enhancing the efficiency of the Moroccan tax system. This study adds to the existing body of knowledge by exploring the dynamics of tax fairness and compliance behavior in Morocco, a context which has been significantly understudied.The importance of perceived fairness regarding tax burden in compliance behavior: a qualitative study using the Delphi method in Morocco
Rida Belahouaoui, El Houssain Attak
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to understand the interaction between tax fairness perceptions, equitable tax burden distribution and tax compliance within Morocco’s unique socio-economic context, with the goal of uncovering strategies to enhance tax compliance.

Using the Delphi method, this study engaged tax experts in the Moroccan context to explore the impact of taxpayers’ perception of fairness, tax rates and tax burden on compliance. Their responses were gathered and analyzed with the aid of IRaMuTeQ software, which helped the authors identify themes relevant to the research question.

The preliminary results indicate a positive correlation between perceptions of tax fairness and compliance behavior, corroborating earlier studies conducted in different contexts. Notably, a substantial majority of Moroccan taxpayers perceive the current tax system as inequitable, deeming tax rates too high and the tax burden unfairly distributed among various taxpayer categories. This perception potentially influences their voluntary tax compliance behavior.

The findings have significant policy implications for the Moroccan Government and stakeholders. They suggest that by improving tax fairness, particularly by aligning tax assessment and payment modalities for employees, civil servants and small to medium enterprises, policymakers can encourage higher voluntary tax compliance, thereby potentially enhancing the efficiency of the Moroccan tax system.

This study adds to the existing body of knowledge by exploring the dynamics of tax fairness and compliance behavior in Morocco, a context which has been significantly understudied.

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The importance of perceived fairness regarding tax burden in compliance behavior: a qualitative study using the Delphi method in Morocco10.1108/JFRA-04-2023-0213Journal of Financial Reporting and Accounting2023-12-06© 2023 Emerald Publishing LimitedRida BelahouaouiEl Houssain AttakJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-12-0610.1108/JFRA-04-2023-0213https://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2023-0213/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The role of digital accounting transformation in the banking industry sector: an integrated modelhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2023-0214/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe digital transformation revolution has brought outstanding changes to business organizations, especially in the digital accounting transformation domain. Consequently, the purpose of this study is to explore the important role of digital accounting transformation in improving business performance in the context of the banking industry. Data were collected through a questionnaire from the Jordanian bank sector with a sample of 190 respondents. Partial least squares structural equation modeling (PLS-SEM) was used to analyze the collected data and test the hypotheses. The results have shown that the adoption of digital accounting, adoption of FinTech innovation and technological competition are the major drivers for improving business performance. All direct paths leading to improving business performance were found to be significant in the hypothesized directions, while technological savvy was found to indirectly affect the relationship between (the adoption of digital accounting and FinTech innovation) and improving business performance. The current study is differentiated from other studies by developing a theoretical research model to incorporate the adoption of digital accounting, adoption of FinTech innovation, technological competition, technological savvy and business performance in the Jordanian context under the digital transformation revolution. For practitioners, the findings provide policymakers with meaningful insight for organizations looking to adopt these digital technologies for improved business performance.The role of digital accounting transformation in the banking industry sector: an integrated model
Manaf Al-Okaily, Ayman Abdalmajeed Alsmadi, Najed Alrawashdeh, Aws Al-Okaily, Yazan Oroud, Anwar S. Al-Gasaymeh
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

The digital transformation revolution has brought outstanding changes to business organizations, especially in the digital accounting transformation domain. Consequently, the purpose of this study is to explore the important role of digital accounting transformation in improving business performance in the context of the banking industry.

Data were collected through a questionnaire from the Jordanian bank sector with a sample of 190 respondents. Partial least squares structural equation modeling (PLS-SEM) was used to analyze the collected data and test the hypotheses.

The results have shown that the adoption of digital accounting, adoption of FinTech innovation and technological competition are the major drivers for improving business performance. All direct paths leading to improving business performance were found to be significant in the hypothesized directions, while technological savvy was found to indirectly affect the relationship between (the adoption of digital accounting and FinTech innovation) and improving business performance.

The current study is differentiated from other studies by developing a theoretical research model to incorporate the adoption of digital accounting, adoption of FinTech innovation, technological competition, technological savvy and business performance in the Jordanian context under the digital transformation revolution. For practitioners, the findings provide policymakers with meaningful insight for organizations looking to adopt these digital technologies for improved business performance.

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The role of digital accounting transformation in the banking industry sector: an integrated model10.1108/JFRA-04-2023-0214Journal of Financial Reporting and Accounting2023-07-31© 2023 Emerald Publishing LimitedManaf Al-OkailyAyman Abdalmajeed AlsmadiNajed AlrawashdehAws Al-OkailyYazan OroudAnwar S. Al-GasaymehJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-07-3110.1108/JFRA-04-2023-0214https://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2023-0214/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The determinants of sustainability reporting: evidence from Saudi petrochemical companieshttps://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2023-0216/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to investigate the determinants of sustainability reporting in the Kingdom of Saudi Arabia (KSA). Twenty unstructured interviews were conducted to understand thoroughly the determinants and motivations of sustainability reporting among Saudi petrochemical shareholding companies. This study finds that cultural aspects, compliance with international best practice, competitiveness, reputation and legitimacy are common motivations for sustainability reporting in KSA. This study has significant implications for industry, especially petrochemical and other highly polluting industries, and for policymakers. There are economic benefits to industry in adopting sustainability reporting, including transparency; and it is suggested that policymakers encourage industries to give more attention to sustainability reporting. This study provides an original contribution to the extant literature on sustainability reporting, and incrementally adds to knowledge on sustainability reporting in KSA, Gulf cooperation council and Middle East North Africa region countries.The determinants of sustainability reporting: evidence from Saudi petrochemical companies
Mohammad Q. Alshhadat
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to investigate the determinants of sustainability reporting in the Kingdom of Saudi Arabia (KSA).

Twenty unstructured interviews were conducted to understand thoroughly the determinants and motivations of sustainability reporting among Saudi petrochemical shareholding companies.

This study finds that cultural aspects, compliance with international best practice, competitiveness, reputation and legitimacy are common motivations for sustainability reporting in KSA.

This study has significant implications for industry, especially petrochemical and other highly polluting industries, and for policymakers. There are economic benefits to industry in adopting sustainability reporting, including transparency; and it is suggested that policymakers encourage industries to give more attention to sustainability reporting.

This study provides an original contribution to the extant literature on sustainability reporting, and incrementally adds to knowledge on sustainability reporting in KSA, Gulf cooperation council and Middle East North Africa region countries.

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The determinants of sustainability reporting: evidence from Saudi petrochemical companies10.1108/JFRA-04-2023-0216Journal of Financial Reporting and Accounting2023-08-24© 2023 Emerald Publishing LimitedMohammad Q. AlshhadatJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-08-2410.1108/JFRA-04-2023-0216https://www.emerald.com/insight/content/doi/10.1108/JFRA-04-2023-0216/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
CEO attributes and foreign shareholdings: evidence from an emerging economyhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-05-2022-0166/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to examine the impact of chief executive officer (CEO) attributes on foreign shareholdings from the perspective of an emerging economy. This study examined Bombay Stock Exchange listed firms from the Indian stock market and applied a balanced panel data approach with fixed effect estimation technique during the period 2010–2019. The study shows that CEOs’ financial education and a higher level of education positively affect foreign shareholdings. The age and experience of CEO have a positive and significant impact on foreign shareholdings. Firms with male CEOs are preferred more by foreign investors. The effect of CEO busyness and CEO duality is negative on foreign shareholdings. Foreign investors prefer to invest in firms with foreign nationality CEOs. Furthermore, the robustness test reveals that the influence of CEO attributes on foreign shareholdings is stronger for new, small and stand-alone firms than for old, large and group-affiliated firms. The study will be beneficial for a diverse audience ranging from firms’ board of directors, regulators and policymakers who are entrusted with the CEO recruitment process. Additionally, firms seeking external financing should disclose CEO information adequately and improve the reporting quality to attract foreign investors, as they consider CEO characteristics as a valuable signal before making investment decisions. In light of the current legislative reforms, this study can be recognized as one of the early studies that explore the relationship between CEO attributes and foreign shareholdings in the context of an emerging economy.CEO attributes and foreign shareholdings: evidence from an emerging economy
Dipanwita Chakraborty, Jitendra Mahakud
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to examine the impact of chief executive officer (CEO) attributes on foreign shareholdings from the perspective of an emerging economy.

This study examined Bombay Stock Exchange listed firms from the Indian stock market and applied a balanced panel data approach with fixed effect estimation technique during the period 2010–2019.

The study shows that CEOs’ financial education and a higher level of education positively affect foreign shareholdings. The age and experience of CEO have a positive and significant impact on foreign shareholdings. Firms with male CEOs are preferred more by foreign investors. The effect of CEO busyness and CEO duality is negative on foreign shareholdings. Foreign investors prefer to invest in firms with foreign nationality CEOs. Furthermore, the robustness test reveals that the influence of CEO attributes on foreign shareholdings is stronger for new, small and stand-alone firms than for old, large and group-affiliated firms.

The study will be beneficial for a diverse audience ranging from firms’ board of directors, regulators and policymakers who are entrusted with the CEO recruitment process. Additionally, firms seeking external financing should disclose CEO information adequately and improve the reporting quality to attract foreign investors, as they consider CEO characteristics as a valuable signal before making investment decisions.

In light of the current legislative reforms, this study can be recognized as one of the early studies that explore the relationship between CEO attributes and foreign shareholdings in the context of an emerging economy.

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CEO attributes and foreign shareholdings: evidence from an emerging economy10.1108/JFRA-05-2022-0166Journal of Financial Reporting and Accounting2023-06-29© 2023 Emerald Publishing LimitedDipanwita ChakrabortyJitendra MahakudJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-06-2910.1108/JFRA-05-2022-0166https://www.emerald.com/insight/content/doi/10.1108/JFRA-05-2022-0166/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Assessing the impact of the Covid-19 pandemic on audit fees: an international evidencehttps://www.emerald.com/insight/content/doi/10.1108/JFRA-05-2022-0169/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to investigate the effect of the health crisis, that is, coronavirus disease 2019 (COVID-19), on audit fees. The authors use a sample of 5,008 international firms over the period 2014 to 2020. They use the ordinary least squares (OLS) regression to investigate the study hypotheses. The results of OLS regression reveal a negative relationship between the COVID-19 pandemic and audit fees. This finding implies that the pandemic is associated with a reduction in audit fees. This study contributes to the literature by providing the first comprehensive empirical evidence on the effect of the COVID-19 pandemic on audit fees. The results have implications for regulators and investors. Despite the existing attempts on COVID-19 and audit fees, to the best of the authors’ knowledge, this study is the first that provides international insights into the economic consequences of COVID-19 on the accounting profession.Assessing the impact of the Covid-19 pandemic on audit fees: an international evidence
Radwan Hussien Alkebsee, Jamel Azibi, Andreas Koutoupis, Theodora Dimitriou
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to investigate the effect of the health crisis, that is, coronavirus disease 2019 (COVID-19), on audit fees.

The authors use a sample of 5,008 international firms over the period 2014 to 2020. They use the ordinary least squares (OLS) regression to investigate the study hypotheses.

The results of OLS regression reveal a negative relationship between the COVID-19 pandemic and audit fees. This finding implies that the pandemic is associated with a reduction in audit fees.

This study contributes to the literature by providing the first comprehensive empirical evidence on the effect of the COVID-19 pandemic on audit fees. The results have implications for regulators and investors.

Despite the existing attempts on COVID-19 and audit fees, to the best of the authors’ knowledge, this study is the first that provides international insights into the economic consequences of COVID-19 on the accounting profession.

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Assessing the impact of the Covid-19 pandemic on audit fees: an international evidence10.1108/JFRA-05-2022-0169Journal of Financial Reporting and Accounting2023-07-28© 2023 Emerald Publishing LimitedRadwan Hussien AlkebseeJamel AzibiAndreas KoutoupisTheodora DimitriouJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-07-2810.1108/JFRA-05-2022-0169https://www.emerald.com/insight/content/doi/10.1108/JFRA-05-2022-0169/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Earnings performance of financial and non-financial IPOs in India: an empirical analysis based on market timinghttps://www.emerald.com/insight/content/doi/10.1108/JFRA-05-2022-0176/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe purpose of this study is to see if market timing predicts the first reporting of earnings performance after the issue, i.e. the issue-year earnings performance. Furthermore, this study examines the behaviour of financial and non-financial issuers’ performance in the light of varied market timings. This study focuses on 785 NSE-listed initial public offerings that took place between April 2010 and December 2021. This study evaluates market timing by using moving averages. Using multiple regression analysis, the research further investigates the impact of market timing on issue-year earnings performance for financial and non-financial issuers on the basis of an interaction (moderation) effect. This study finds that there is a significant presence of market timing in India, which predicts issue-year earnings performance. This study also demonstrates that hot market issuers’ performance is heavily influenced by market timing for non-financial issuers only. However, financial companies are not influenced by market timing. The findings of this study will assist the potential investors, analysts and stakeholders about performance of public issuers in India. Lower earnings performance for hot market non-financial issuers implies that the issuers’ market performance may not be supported by earnings figures. A market performance that is not synchronous with earnings will not last long. The findings of this study hold implications to the regulators as well to keep an eye on issuers’ earnings performance alongside the stock performance. Apart from that, the observations in context of financial and non-financial issuers provide insight about the variation in performance of public issues on the basis of background. To the best of the authors’ knowledge, this is the only study to examine earnings performance in the context of market timing in India. This study holds significance in terms of methodology for anticipating the presence of market timing and the study of interaction effects. Moreover, it is one of the few studies that has focused on comparing financial and non-financial issuers around the world.Earnings performance of financial and non-financial IPOs in India: an empirical analysis based on market timing
Sunaina Dhanda, Shveta Singh
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

The purpose of this study is to see if market timing predicts the first reporting of earnings performance after the issue, i.e. the issue-year earnings performance. Furthermore, this study examines the behaviour of financial and non-financial issuers’ performance in the light of varied market timings.

This study focuses on 785 NSE-listed initial public offerings that took place between April 2010 and December 2021. This study evaluates market timing by using moving averages. Using multiple regression analysis, the research further investigates the impact of market timing on issue-year earnings performance for financial and non-financial issuers on the basis of an interaction (moderation) effect.

This study finds that there is a significant presence of market timing in India, which predicts issue-year earnings performance. This study also demonstrates that hot market issuers’ performance is heavily influenced by market timing for non-financial issuers only. However, financial companies are not influenced by market timing.

The findings of this study will assist the potential investors, analysts and stakeholders about performance of public issuers in India. Lower earnings performance for hot market non-financial issuers implies that the issuers’ market performance may not be supported by earnings figures. A market performance that is not synchronous with earnings will not last long. The findings of this study hold implications to the regulators as well to keep an eye on issuers’ earnings performance alongside the stock performance. Apart from that, the observations in context of financial and non-financial issuers provide insight about the variation in performance of public issues on the basis of background.

To the best of the authors’ knowledge, this is the only study to examine earnings performance in the context of market timing in India. This study holds significance in terms of methodology for anticipating the presence of market timing and the study of interaction effects. Moreover, it is one of the few studies that has focused on comparing financial and non-financial issuers around the world.

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Earnings performance of financial and non-financial IPOs in India: an empirical analysis based on market timing10.1108/JFRA-05-2022-0176Journal of Financial Reporting and Accounting2023-02-09© 2023 Emerald Publishing LimitedSunaina DhandaShveta SinghJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-02-0910.1108/JFRA-05-2022-0176https://www.emerald.com/insight/content/doi/10.1108/JFRA-05-2022-0176/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The moderating effect of external financing on the relationship between integrated reporting and firm value in Egypthttps://www.emerald.com/insight/content/doi/10.1108/JFRA-05-2022-0195/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to investigate the moderating effect of external financing needs on the relationship between the disclosure level of integrated reporting (IR) and firm value using evidence from Egypt. This study uses a panel regression analysis for a matched sample of 50 companies listed on the Egyptian Stock Exchange (EGX), specifically from EGX100. The sample covers four years (2017–2020). The current study uses content analysis to measure IR and Tobin’s Q as a proxy for firm value. The findings reveal a significant positive relationship between the disclosure level of IR and firm value. In addition, the authors find that external financing needs moderate the relationship between IR and firm value. It is concluded that the higher the disclosure level of IR content, the higher the firm’s value, and that this relationship strengthens in firms with high needs for external financing. Several practical implications can be derived from the results of the current study. Policymakers and regulators can impose mandatory requirements for IR in Egypt. It also opens new insights for board members, managers, analysts and auditors in forming financing decisions based on annual reports. The present study has a novel insight from a developing country and significant contributions to the extant literature. The study provides empirical evidence from an emerging economy and an insight into how external financing can be used for firms with different levels of IR. It also provides a comprehensive disclosure index to estimate the level of IR.The moderating effect of external financing on the relationship between integrated reporting and firm value in Egypt
Abdellatif Hussein Abogazia, Hafiza Aishah Hashim, Zalailah Salleh, Abdou Ahmed Ettish
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to investigate the moderating effect of external financing needs on the relationship between the disclosure level of integrated reporting (IR) and firm value using evidence from Egypt.

This study uses a panel regression analysis for a matched sample of 50 companies listed on the Egyptian Stock Exchange (EGX), specifically from EGX100. The sample covers four years (2017–2020). The current study uses content analysis to measure IR and Tobin’s Q as a proxy for firm value.

The findings reveal a significant positive relationship between the disclosure level of IR and firm value. In addition, the authors find that external financing needs moderate the relationship between IR and firm value. It is concluded that the higher the disclosure level of IR content, the higher the firm’s value, and that this relationship strengthens in firms with high needs for external financing.

Several practical implications can be derived from the results of the current study. Policymakers and regulators can impose mandatory requirements for IR in Egypt. It also opens new insights for board members, managers, analysts and auditors in forming financing decisions based on annual reports.

The present study has a novel insight from a developing country and significant contributions to the extant literature. The study provides empirical evidence from an emerging economy and an insight into how external financing can be used for firms with different levels of IR. It also provides a comprehensive disclosure index to estimate the level of IR.

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The moderating effect of external financing on the relationship between integrated reporting and firm value in Egypt10.1108/JFRA-05-2022-0195Journal of Financial Reporting and Accounting2022-11-09© 2022 Emerald Publishing LimitedAbdellatif Hussein AbogaziaHafiza Aishah HashimZalailah SallehAbdou Ahmed EttishJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-11-0910.1108/JFRA-05-2022-0195https://www.emerald.com/insight/content/doi/10.1108/JFRA-05-2022-0195/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
Financial attributes and corporate tax planning of listed manufacturing firms in Nigeria: moderating role of real earnings managementhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-05-2022-0198/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestSome researchers regard discretionary accrual (DA) as one of the factors that drive corporate managers to conduct tax planning (Scott, 2009; Basri and Buchari, 2017). Based on agency theory and positive accounting theory, corporate managers can transform accounting information and manipulate firm earnings to reduce tax liability. There is a lot of research concerning earnings management and tax planning in the developed economy. These studies include Wang and Chen (2012) and Pettersson and Wu (2015). In the emerging economies, it includes Jamei and Khedri (2016), Kurniasih and Sulardi Suranta (2017), Prastiwi (2017), Almashaqbeh et al. (2018), Bayunanda et al. (2018), Rani et al. (2018) and Kałdoński and Jewartowski (2019). It is important to note that none of the research mentioned above has evaluated the impact of real earnings management (REM) on tax planning in Nigeria. While in the developed economy only Kałdoński and Jewartowski (2019) used REM as an explanatory variable, while the majority of studies used DA. Consequently, no study has used REM to moderate the relationship between financial attributes and tax planning. Despite the widespread notion, as well as positive accounting theory, tax planning theory that financial attributes (profitability, leverage, liquidity and firm growth), REM and DA motivate tax planning, previous investigations have produced mixed results (Dwenger and Steiner, 2009; Wang and Chen, 2012; Chen and Zolotoy, 2014; Aghouei and Moradi, 2015; Pettersson and Wu, 2015; Ribeiro, 2015; Chen et al., 2016; Jamei and Khedri, 2016; Ogbeide, 2017; Yuniawati et al., 2017; Chen and Lin, 2017; Firmansyah and Febriyanto, 2018; Prastiwi, 2018; Rani et al., 2018; Kibiya and Aminu, 2019; Kałdoński and Jewartowski, 2019 and Siyanbonla, 2021). This study aims to use REM as a moderator to examine the relationship between financial attributes and tax planning whether it will strengthen or weaken the relationship. The study examines the impact of financial attributes on the corporate tax planning of listed manufacturing firms in Nigeria. It also tests for the moderating effect of REM on the relationship between financial attributes and tax planning. Data for the study was sourced from the annual reports of sampled manufacturing firms. The study used the panel data methodology for analysis. The study used fixed effect estimation to interpret the parsimonious model and random effect was used to interpret the moderated model. The study documented that financial leverage has a positive significant influence on the tax planning of the sampled manufacturing firms. While firm growth has a negative significant impact on the tax planning of listed manufacturing firms in Nigeria. REM has a positive significant impact on tax planning. Also, REM moderate significantly the relationship between financial attributes on one hand and tax planning on the other. The study recommends that firms should go for more debt to take advantage of the tax shield of interest on the debt. Also, firm management should use non-current debt to finance non-current assets and use current debt to finance current assets to avoid the risk of taking over or liquidation. The study also recommends that firm management should engage in intercompany and intracompany transactions by selling their goods to affiliates in countries with low prices and low tax rates. A firm should also overproduce goods to have high production costs and high closing inventory since real earning management significantly reduces tax liabilities by deferring income into a later year. The study documented that financial leverage has a positive and significant influence on the tax planning of the sampled manufacturing firms. While firm growth has a negative but significant impact on the tax planning of listed manufacturing firms in Nigeria. REM has a positive and significant impact on tax planning. Also, REM moderate significantly the relationship between financial attributes on one hand and tax planning on the other. There is a lot of research concerning earnings management and tax planning in the developed economy. These studies include Wang and Chen (2012) and Pettersson and Wu (2015). In the emerging economies, it includes Jamei and Khedri (2016), Kurniasih and Sulardi Suranta (2017), Prastiwi (2017), Almashaqbeh et al. (2018), Bayunanda et al. (2018), Rani et al. (2018) and Kałdoński and Jewartowski (2019). It is important to note that none of the research mentioned above has evaluated the impact of REM on tax planning in Nigeria. While in the developed economy only Kałdoński and Jewartowski (2019) used REM as an explanatory variable, while the majority of studies used DA. Consequently, no study has used REM to moderate the relationship between financial attributes and tax planning.Financial attributes and corporate tax planning of listed manufacturing firms in Nigeria: moderating role of real earnings management
Udisifan Michael Tanko
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

Some researchers regard discretionary accrual (DA) as one of the factors that drive corporate managers to conduct tax planning (Scott, 2009; Basri and Buchari, 2017). Based on agency theory and positive accounting theory, corporate managers can transform accounting information and manipulate firm earnings to reduce tax liability. There is a lot of research concerning earnings management and tax planning in the developed economy. These studies include Wang and Chen (2012) and Pettersson and Wu (2015). In the emerging economies, it includes Jamei and Khedri (2016), Kurniasih and Sulardi Suranta (2017), Prastiwi (2017), Almashaqbeh et al. (2018), Bayunanda et al. (2018), Rani et al. (2018) and Kałdoński and Jewartowski (2019). It is important to note that none of the research mentioned above has evaluated the impact of real earnings management (REM) on tax planning in Nigeria. While in the developed economy only Kałdoński and Jewartowski (2019) used REM as an explanatory variable, while the majority of studies used DA. Consequently, no study has used REM to moderate the relationship between financial attributes and tax planning. Despite the widespread notion, as well as positive accounting theory, tax planning theory that financial attributes (profitability, leverage, liquidity and firm growth), REM and DA motivate tax planning, previous investigations have produced mixed results (Dwenger and Steiner, 2009; Wang and Chen, 2012; Chen and Zolotoy, 2014; Aghouei and Moradi, 2015; Pettersson and Wu, 2015; Ribeiro, 2015; Chen et al., 2016; Jamei and Khedri, 2016; Ogbeide, 2017; Yuniawati et al., 2017; Chen and Lin, 2017; Firmansyah and Febriyanto, 2018; Prastiwi, 2018; Rani et al., 2018; Kibiya and Aminu, 2019; Kałdoński and Jewartowski, 2019 and Siyanbonla, 2021). This study aims to use REM as a moderator to examine the relationship between financial attributes and tax planning whether it will strengthen or weaken the relationship.

The study examines the impact of financial attributes on the corporate tax planning of listed manufacturing firms in Nigeria. It also tests for the moderating effect of REM on the relationship between financial attributes and tax planning. Data for the study was sourced from the annual reports of sampled manufacturing firms. The study used the panel data methodology for analysis. The study used fixed effect estimation to interpret the parsimonious model and random effect was used to interpret the moderated model. The study documented that financial leverage has a positive significant influence on the tax planning of the sampled manufacturing firms. While firm growth has a negative significant impact on the tax planning of listed manufacturing firms in Nigeria. REM has a positive significant impact on tax planning. Also, REM moderate significantly the relationship between financial attributes on one hand and tax planning on the other. The study recommends that firms should go for more debt to take advantage of the tax shield of interest on the debt. Also, firm management should use non-current debt to finance non-current assets and use current debt to finance current assets to avoid the risk of taking over or liquidation. The study also recommends that firm management should engage in intercompany and intracompany transactions by selling their goods to affiliates in countries with low prices and low tax rates. A firm should also overproduce goods to have high production costs and high closing inventory since real earning management significantly reduces tax liabilities by deferring income into a later year.

The study documented that financial leverage has a positive and significant influence on the tax planning of the sampled manufacturing firms. While firm growth has a negative but significant impact on the tax planning of listed manufacturing firms in Nigeria. REM has a positive and significant impact on tax planning. Also, REM moderate significantly the relationship between financial attributes on one hand and tax planning on the other.

There is a lot of research concerning earnings management and tax planning in the developed economy. These studies include Wang and Chen (2012) and Pettersson and Wu (2015). In the emerging economies, it includes Jamei and Khedri (2016), Kurniasih and Sulardi Suranta (2017), Prastiwi (2017), Almashaqbeh et al. (2018), Bayunanda et al. (2018), Rani et al. (2018) and Kałdoński and Jewartowski (2019). It is important to note that none of the research mentioned above has evaluated the impact of REM on tax planning in Nigeria. While in the developed economy only Kałdoński and Jewartowski (2019) used REM as an explanatory variable, while the majority of studies used DA. Consequently, no study has used REM to moderate the relationship between financial attributes and tax planning.

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Financial attributes and corporate tax planning of listed manufacturing firms in Nigeria: moderating role of real earnings management10.1108/JFRA-05-2022-0198Journal of Financial Reporting and Accounting2023-06-01© 2023 Emerald Publishing LimitedUdisifan Michael TankoJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-06-0110.1108/JFRA-05-2022-0198https://www.emerald.com/insight/content/doi/10.1108/JFRA-05-2022-0198/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Further evidence on non-audit fees: using the context of female directors on audit committeeshttps://www.emerald.com/insight/content/doi/10.1108/JFRA-05-2022-0199/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to examine the association between non-audit fees and audit quality by using the context of gender-diverse audit committees. Further, the authors assess whether this link is moderated by industry-specialist auditors. This study used non-financial FTSE-350 firms over the period of seven years. In addition, the authors use ordinary least squares regression to test the research hypotheses. The authors find that female directors on audit committees are negatively related to non-audit fees, suggesting that non-audit fees reduce audit quality. Moreover, the results indicate that industry-specialist auditors positively moderate the link between gender-diverse audit committees and non-audit fees. This suggests that non-audit fees improve audit quality when the auditor is an industry-specialist. The study does not support blanket restrictions on non-audit fees. It recommends regulators to consider industry expertise of auditors when devising non-audit fee restrictions. Moreover, the findings of this study have implications for firms aiming to understand whether non-audit fees could be used for enhancing audit quality. By using the context of female directors on audit committees, the authors conclusively assess the link between non-audit fees and audit quality. Further, this study provides a more robust evidence on whether industry-specialist auditors affect the relationship between non-audit fees and audit quality.Further evidence on non-audit fees: using the context of female directors on audit committees
Kaleemullah Abbasi, Ashraful Alam, Noor Ahmed Brohi , Shahzad Nasim
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to examine the association between non-audit fees and audit quality by using the context of gender-diverse audit committees. Further, the authors assess whether this link is moderated by industry-specialist auditors.

This study used non-financial FTSE-350 firms over the period of seven years. In addition, the authors use ordinary least squares regression to test the research hypotheses.

The authors find that female directors on audit committees are negatively related to non-audit fees, suggesting that non-audit fees reduce audit quality. Moreover, the results indicate that industry-specialist auditors positively moderate the link between gender-diverse audit committees and non-audit fees. This suggests that non-audit fees improve audit quality when the auditor is an industry-specialist.

The study does not support blanket restrictions on non-audit fees. It recommends regulators to consider industry expertise of auditors when devising non-audit fee restrictions. Moreover, the findings of this study have implications for firms aiming to understand whether non-audit fees could be used for enhancing audit quality.

By using the context of female directors on audit committees, the authors conclusively assess the link between non-audit fees and audit quality. Further, this study provides a more robust evidence on whether industry-specialist auditors affect the relationship between non-audit fees and audit quality.

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Further evidence on non-audit fees: using the context of female directors on audit committees10.1108/JFRA-05-2022-0199Journal of Financial Reporting and Accounting2023-12-25© 2023 Emerald Publishing LimitedKaleemullah AbbasiAshraful AlamNoor Ahmed Brohi Shahzad NasimJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-12-2510.1108/JFRA-05-2022-0199https://www.emerald.com/insight/content/doi/10.1108/JFRA-05-2022-0199/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Does FinTech adoption increase the diffusion rate of digital financial inclusion? A study of the banking industry sectorhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-05-2023-0224/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe purpose of this study is to discuss the United Arab Emirates’ (UAE) favorable attitude toward the financial sector’s digital transformation and the development of FinTech due to the rise of financial technology. FinTech blends innovation and technology to provide financial inclusion to stakeholders through various new products and services such metaverse and artificial intelligence. A quantitative research approach was used to empirically validate the suggested research model by using 260 Emirates-based banking authorities and administrators’ data. The findings indicate that FinTech adoption had a substantial impact on the competitiveness and performance of the UAE banking industry during COVID-19 times. The research indicates that adequate FinTech implementation and alignment with technology management directly influence the performance of the UAE’s banking sector in difficult times. This study is critical because the UAE banking sector serves diverse nationalities, and its success is contingent on FinTech and its competitive edge.Does FinTech adoption increase the diffusion rate of digital financial inclusion? A study of the banking industry sector
Myriam Aloulou, Rima Grati, Anas Ali Al-Qudah, Manaf Al-Okaily
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

The purpose of this study is to discuss the United Arab Emirates’ (UAE) favorable attitude toward the financial sector’s digital transformation and the development of FinTech due to the rise of financial technology. FinTech blends innovation and technology to provide financial inclusion to stakeholders through various new products and services such metaverse and artificial intelligence.

A quantitative research approach was used to empirically validate the suggested research model by using 260 Emirates-based banking authorities and administrators’ data.

The findings indicate that FinTech adoption had a substantial impact on the competitiveness and performance of the UAE banking industry during COVID-19 times. The research indicates that adequate FinTech implementation and alignment with technology management directly influence the performance of the UAE’s banking sector in difficult times.

This study is critical because the UAE banking sector serves diverse nationalities, and its success is contingent on FinTech and its competitive edge.

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Does FinTech adoption increase the diffusion rate of digital financial inclusion? A study of the banking industry sector10.1108/JFRA-05-2023-0224Journal of Financial Reporting and Accounting2023-09-27© 2023 Emerald Publishing LimitedMyriam AloulouRima GratiAnas Ali Al-QudahManaf Al-OkailyJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-09-2710.1108/JFRA-05-2023-0224https://www.emerald.com/insight/content/doi/10.1108/JFRA-05-2023-0224/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Determinants of the relationship between related party transactions and firm value: evidence from Saudi Arabiahttps://www.emerald.com/insight/content/doi/10.1108/JFRA-05-2023-0230/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to examine the association between related party transactions and firm value. The study also investigates the impact of several determinants of this relationship as moderating variables. The paper uses multiple regression models. In the period from 2018 to 2021, a total of 134 non-financial companies listed on the Saudi Stock Exchange were included in the sample, which consisted of 451 firm-year observations. This paper finds that related party transactions have a significant negative impact on firm value. Moreover, the negative impact of related party transactions on firm value is increased in the presence of changes in the certain presence of certain moderating variables, such as firm size, leverage and return on assets (ROA). The results of the sensitivity analysis concur with the findings of the basic analysis. There is little evidence in the literature regarding related party transactions and their association with the moderating variables considered in this study. To the best of the authors’ knowledge, there have been no studies conducted in Saudi Arabia to date that examine the effect of firm size, leverage and ROA on the association between firm value and related party transactions. Consequently, this paper contributes to the limited literature by expanding the existing research and analyzing the impact of firm size, leverage and ROA on the association between related party transactions and firm value.Determinants of the relationship between related party transactions and firm value: evidence from Saudi Arabia
Abdulaziz Sulaiman Alsultan
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to examine the association between related party transactions and firm value. The study also investigates the impact of several determinants of this relationship as moderating variables.

The paper uses multiple regression models. In the period from 2018 to 2021, a total of 134 non-financial companies listed on the Saudi Stock Exchange were included in the sample, which consisted of 451 firm-year observations.

This paper finds that related party transactions have a significant negative impact on firm value. Moreover, the negative impact of related party transactions on firm value is increased in the presence of changes in the certain presence of certain moderating variables, such as firm size, leverage and return on assets (ROA). The results of the sensitivity analysis concur with the findings of the basic analysis. There is little evidence in the literature regarding related party transactions and their association with the moderating variables considered in this study.

To the best of the authors’ knowledge, there have been no studies conducted in Saudi Arabia to date that examine the effect of firm size, leverage and ROA on the association between firm value and related party transactions. Consequently, this paper contributes to the limited literature by expanding the existing research and analyzing the impact of firm size, leverage and ROA on the association between related party transactions and firm value.

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Determinants of the relationship between related party transactions and firm value: evidence from Saudi Arabia10.1108/JFRA-05-2023-0230Journal of Financial Reporting and Accounting2023-08-03© 2023 Emerald Publishing LimitedAbdulaziz Sulaiman AlsultanJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-08-0310.1108/JFRA-05-2023-0230https://www.emerald.com/insight/content/doi/10.1108/JFRA-05-2023-0230/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The moderating effects of corporate governance and investment efficiency on the nexus between financial flexibility and firm performancehttps://www.emerald.com/insight/content/doi/10.1108/JFRA-05-2023-0234/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestFinancial flexibility, investment efficiency and effective corporate governance mechanisms have been issues of concern to stakeholders. Yet, little empirical evidence on the combined moderating effects investment efficiency and corporate governance mechanisms on the nexus between financial flexibility and firm performance. This study aims to address this gap and extend the extant literature by examining the moderating effects of corporate governance and investment efficiency on the nexus between financial flexibility and financial performance. The empirical study is based on progression analysis using a sample of 13,865 US listed companies selected from BoardEx (WRDS) for the period (2010–2022) with 89,198 firm-year observations. Findings of this study indicate that financial flexibility improves firm value as well as accounting performance. Furthermore, the results reveal that both investment efficiency and corporate governance moderate the effect of financial flexibility on firm performance. The authors complement and extend the literature on the optimal investment strategies domain by showing that the combined impact of corporate governance mechanisms and investment efficiency strengthens the nexus between financial flexibility and firm performance. Key limitations of this study due to the characteristics of the sample selection: country-specific context and proxies used by this study. Findings of this study have managerial and theoretical implications for firms’ boardrooms, institutional and individual investors, regulators, academics and other stakeholders regarding behavioural aspects of investment decision-making. The authors’ novel contribution to the extant literature is articulated by the conceptual framework underlying this study and by the new evidence regarding exploring the combined effect of corporate governance mechanisms on nexus between financial flexibility and companies’ performance.The moderating effects of corporate governance and investment efficiency on the nexus between financial flexibility and firm performance
Wei Wu, Fadi Alkaraan, Chau Le
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

Financial flexibility, investment efficiency and effective corporate governance mechanisms have been issues of concern to stakeholders. Yet, little empirical evidence on the combined moderating effects investment efficiency and corporate governance mechanisms on the nexus between financial flexibility and firm performance. This study aims to address this gap and extend the extant literature by examining the moderating effects of corporate governance and investment efficiency on the nexus between financial flexibility and financial performance.

The empirical study is based on progression analysis using a sample of 13,865 US listed companies selected from BoardEx (WRDS) for the period (2010–2022) with 89,198 firm-year observations.

Findings of this study indicate that financial flexibility improves firm value as well as accounting performance. Furthermore, the results reveal that both investment efficiency and corporate governance moderate the effect of financial flexibility on firm performance. The authors complement and extend the literature on the optimal investment strategies domain by showing that the combined impact of corporate governance mechanisms and investment efficiency strengthens the nexus between financial flexibility and firm performance.

Key limitations of this study due to the characteristics of the sample selection: country-specific context and proxies used by this study.

Findings of this study have managerial and theoretical implications for firms’ boardrooms, institutional and individual investors, regulators, academics and other stakeholders regarding behavioural aspects of investment decision-making.

The authors’ novel contribution to the extant literature is articulated by the conceptual framework underlying this study and by the new evidence regarding exploring the combined effect of corporate governance mechanisms on nexus between financial flexibility and companies’ performance.

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The moderating effects of corporate governance and investment efficiency on the nexus between financial flexibility and firm performance10.1108/JFRA-05-2023-0234Journal of Financial Reporting and Accounting2023-08-22© 2023 Emerald Publishing LimitedWei WuFadi AlkaraanChau LeJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-08-2210.1108/JFRA-05-2023-0234https://www.emerald.com/insight/content/doi/10.1108/JFRA-05-2023-0234/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The perception of accountants/auditors on the role of corporate governance and information technology in fraud detection and preventionhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-05-2023-0235/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to investigate the perceptions of financial accountants and both internal and external auditors regarding the impact of corporate governance (CG) and information technology (IT) on the detection and prevention of fraud within organizations. Primary data were collected from 250 financial accountants, internal auditors and external auditors through questionnaires. The non-probability snowball sampling technique was used for data collection, with the sample t-test, one-way ANOVA and paired sample t-test applied for analysis. The results indicate that robust CG practices and IT techniques significantly aid in detecting and reducing fraudulent activities by minimizing opportunities, rationalizations, pressures and capabilities of potential employees to commit fraud. Internal controls also play a significant role in reducing instances of fraud. Notably, ethical officers and ethical training were not perceived as significantly effective in preventing and detecting fraud, leading to a perception that fraudulent practices are prevalent and increasing the risk of future fraudulent activities. This study recommends the adoption of strong CG practices to identify potential fraud within an organization. Moreover, IT techniques should be tailored to specific needs for effective utilization. Furthermore, the government should increase awareness regarding data provision by departments, organizations and other related personnel. Future research could use secondary data from various regions to expand the literature in this field. This research uniquely combines three significant factors: CG, IT and forensic accounting in fraud detection and prevention. It contributes to the enhancement of literature about fraud and its preventive and detective measures. The results of this study set the seed for future research, government policymaking and enhanced organizational practices.The perception of accountants/auditors on the role of corporate governance and information technology in fraud detection and prevention
Syed Waleed Ul Hassan, Samra Kiran, Samina Gul, Ibrahim N. Khatatbeh, Bibi Zainab
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to investigate the perceptions of financial accountants and both internal and external auditors regarding the impact of corporate governance (CG) and information technology (IT) on the detection and prevention of fraud within organizations.

Primary data were collected from 250 financial accountants, internal auditors and external auditors through questionnaires. The non-probability snowball sampling technique was used for data collection, with the sample t-test, one-way ANOVA and paired sample t-test applied for analysis.

The results indicate that robust CG practices and IT techniques significantly aid in detecting and reducing fraudulent activities by minimizing opportunities, rationalizations, pressures and capabilities of potential employees to commit fraud. Internal controls also play a significant role in reducing instances of fraud. Notably, ethical officers and ethical training were not perceived as significantly effective in preventing and detecting fraud, leading to a perception that fraudulent practices are prevalent and increasing the risk of future fraudulent activities.

This study recommends the adoption of strong CG practices to identify potential fraud within an organization. Moreover, IT techniques should be tailored to specific needs for effective utilization. Furthermore, the government should increase awareness regarding data provision by departments, organizations and other related personnel. Future research could use secondary data from various regions to expand the literature in this field.

This research uniquely combines three significant factors: CG, IT and forensic accounting in fraud detection and prevention. It contributes to the enhancement of literature about fraud and its preventive and detective measures. The results of this study set the seed for future research, government policymaking and enhanced organizational practices.

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The perception of accountants/auditors on the role of corporate governance and information technology in fraud detection and prevention10.1108/JFRA-05-2023-0235Journal of Financial Reporting and Accounting2023-08-29© 2023 Emerald Publishing LimitedSyed Waleed Ul HassanSamra KiranSamina GulIbrahim N. KhatatbehBibi ZainabJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-08-2910.1108/JFRA-05-2023-0235https://www.emerald.com/insight/content/doi/10.1108/JFRA-05-2023-0235/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Determinants of litigation risk in the Jordanian financial sector: the role of firm-specific indicatorshttps://www.emerald.com/insight/content/doi/10.1108/JFRA-05-2023-0239/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to examine the impact of firm indicators on litigation risk in the Jordanian financial sector from 2017 to 2021, where the relationship between firm indicators and litigation risk in the Jordanian financial sector is a crucial area of research that can help financial institutions understand the factors that increase their probability of litigation risk. The sample for this study comprised 92 publicly traded financial firms listed on the Amman Stock Exchange. The study used a quantitative research approach to analyse the relationship between four firm indicators (profitability, firm size, leverage and age) and their impact on litigation risk in the Jordanian financial sector from 2017 to 2021. Our findings reveal that firm size has a significant positive impact on litigation risk, whereas profitability was found to have no significant impact on litigation risk. Moreover, the authors found that financial leverage substantially positively impacts litigation risk levels. However, the firm age was found to have no significant impact on litigation risk. The results provide valuable insights into factors contributing to litigation risk in the Jordanian financial sector and the findings can inform strategic decisions for financial firms as they seek to manage litigation risk and improve financial performance. The study contributes to the existing literature on litigation risk by examining the impact of multiple firm indicators on litigation risk in the context of the Jordanian financial sector.Determinants of litigation risk in the Jordanian financial sector: the role of firm-specific indicators
Rana Taha, Noor Taha, Husam Ananzeh
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to examine the impact of firm indicators on litigation risk in the Jordanian financial sector from 2017 to 2021, where the relationship between firm indicators and litigation risk in the Jordanian financial sector is a crucial area of research that can help financial institutions understand the factors that increase their probability of litigation risk.

The sample for this study comprised 92 publicly traded financial firms listed on the Amman Stock Exchange. The study used a quantitative research approach to analyse the relationship between four firm indicators (profitability, firm size, leverage and age) and their impact on litigation risk in the Jordanian financial sector from 2017 to 2021.

Our findings reveal that firm size has a significant positive impact on litigation risk, whereas profitability was found to have no significant impact on litigation risk. Moreover, the authors found that financial leverage substantially positively impacts litigation risk levels. However, the firm age was found to have no significant impact on litigation risk.

The results provide valuable insights into factors contributing to litigation risk in the Jordanian financial sector and the findings can inform strategic decisions for financial firms as they seek to manage litigation risk and improve financial performance. The study contributes to the existing literature on litigation risk by examining the impact of multiple firm indicators on litigation risk in the context of the Jordanian financial sector.

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Determinants of litigation risk in the Jordanian financial sector: the role of firm-specific indicators10.1108/JFRA-05-2023-0239Journal of Financial Reporting and Accounting2023-09-15© 2023 Emerald Publishing LimitedRana TahaNoor TahaHusam AnanzehJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-09-1510.1108/JFRA-05-2023-0239https://www.emerald.com/insight/content/doi/10.1108/JFRA-05-2023-0239/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The moderating effect of corporate liquidity on the relationship between financial reporting quality and dividend policy: evidence from Saudi Arabiahttps://www.emerald.com/insight/content/doi/10.1108/JFRA-05-2023-0247/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe purpose of this paper is to examine the impact of financial reporting quality (FRQ) on dividend policy. This paper also examines the moderating role of corporate liquidity on the FRQ–dividend policy relationship. The sample of this paper contains 113 non-financial companies listed on the Saudi Stock Exchange from 2003 to 2019 (1,675 firm-year observations). The authors use OLS regressions to test the hypotheses. The authors find a positive relationship between FRQ and dividend policy. They also find that the positive effect of FRQ on dividend policy is not strengthened by the presence of corporate liquidity. The findings of this study offer implications for stakeholders, including investors and others in Saudi Arabia and other developing countries with comparable business environments. This is because of the significant impact of the dividend policy on a company’s value, as it is a crucial decision that involves distributing substantial amounts of money to shareholders on a regular basis and interacts with other critical decisions within the company. Therefore, the dividend policy has a crucial role in determining the company’s value, which is reflected in its stock prices. To the best of the authors’ knowledge, this is the first study in Saudi Arabia that provides new empirical evidence on the impact of FRQ on dividend policy and the moderating role of corporate liquidity on this relationship.The moderating effect of corporate liquidity on the relationship between financial reporting quality and dividend policy: evidence from Saudi Arabia
Abdulaziz Alsultan, Khaled Hussainey
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

The purpose of this paper is to examine the impact of financial reporting quality (FRQ) on dividend policy. This paper also examines the moderating role of corporate liquidity on the FRQ–dividend policy relationship.

The sample of this paper contains 113 non-financial companies listed on the Saudi Stock Exchange from 2003 to 2019 (1,675 firm-year observations). The authors use OLS regressions to test the hypotheses.

The authors find a positive relationship between FRQ and dividend policy. They also find that the positive effect of FRQ on dividend policy is not strengthened by the presence of corporate liquidity.

The findings of this study offer implications for stakeholders, including investors and others in Saudi Arabia and other developing countries with comparable business environments. This is because of the significant impact of the dividend policy on a company’s value, as it is a crucial decision that involves distributing substantial amounts of money to shareholders on a regular basis and interacts with other critical decisions within the company. Therefore, the dividend policy has a crucial role in determining the company’s value, which is reflected in its stock prices.

To the best of the authors’ knowledge, this is the first study in Saudi Arabia that provides new empirical evidence on the impact of FRQ on dividend policy and the moderating role of corporate liquidity on this relationship.

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The moderating effect of corporate liquidity on the relationship between financial reporting quality and dividend policy: evidence from Saudi Arabia10.1108/JFRA-05-2023-0247Journal of Financial Reporting and Accounting2023-10-05© 2023 Emerald Publishing LimitedAbdulaziz AlsultanKhaled HussaineyJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-10-0510.1108/JFRA-05-2023-0247https://www.emerald.com/insight/content/doi/10.1108/JFRA-05-2023-0247/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Expanding financial inclusion in Indonesia through Takaful: opportunities, challenges and sustainabilityhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-05-2023-0256/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to investigate the relationship between financial inclusion and sustainable economic development in Indonesia by exploring the potential impact of Takaful. Specifically, the study seeks to examine the feasibility of leveraging Takaful as a means to foster financial inclusion and drive economic growth in Indonesia. This study uses a qualitative analysis methodology, specifically using content analysis techniques, to investigate the relationship between financial inclusion and sustainable economic growth in Indonesia, focussing on the role of Takaful. The content analysis enables a systematic study of the data to identify trends and topics pertinent to Takaful and its potential to advance financial inclusion. The study’s results reveal a direct causal link between economic growth and achieving financial inclusion through the use of Takaful. The findings also indicate a positive correlation between the increased presence of Takaful markets and accelerated economic growth. The study examines only the use of Takaful in achieving financial inclusion and sustainable economic growth in Indonesia. Nonetheless, the practical implications of this research are substantial, as they highlight the potential of Takaful to foster financial inclusion and stimulate economic growth in Indonesia. This study contributes to the limited body of research on the relationship between financial inclusion and economic growth in Indonesia, specifically in the context of Takaful. This study’s value lies in its exploration of an under-researched area, providing crucial insights into the potential of Takaful to promote financial inclusion and drive economic growth in Indonesia. The social implications of this study are also noteworthy, as increased financial inclusion and economic growth can positively affect poverty reduction, job creation and overall societal well-being in Indonesia.Expanding financial inclusion in Indonesia through Takaful: opportunities, challenges and sustainability
Salah Alhammadi
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to investigate the relationship between financial inclusion and sustainable economic development in Indonesia by exploring the potential impact of Takaful. Specifically, the study seeks to examine the feasibility of leveraging Takaful as a means to foster financial inclusion and drive economic growth in Indonesia.

This study uses a qualitative analysis methodology, specifically using content analysis techniques, to investigate the relationship between financial inclusion and sustainable economic growth in Indonesia, focussing on the role of Takaful. The content analysis enables a systematic study of the data to identify trends and topics pertinent to Takaful and its potential to advance financial inclusion.

The study’s results reveal a direct causal link between economic growth and achieving financial inclusion through the use of Takaful. The findings also indicate a positive correlation between the increased presence of Takaful markets and accelerated economic growth.

The study examines only the use of Takaful in achieving financial inclusion and sustainable economic growth in Indonesia. Nonetheless, the practical implications of this research are substantial, as they highlight the potential of Takaful to foster financial inclusion and stimulate economic growth in Indonesia.

This study contributes to the limited body of research on the relationship between financial inclusion and economic growth in Indonesia, specifically in the context of Takaful.

This study’s value lies in its exploration of an under-researched area, providing crucial insights into the potential of Takaful to promote financial inclusion and drive economic growth in Indonesia. The social implications of this study are also noteworthy, as increased financial inclusion and economic growth can positively affect poverty reduction, job creation and overall societal well-being in Indonesia.

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Expanding financial inclusion in Indonesia through Takaful: opportunities, challenges and sustainability10.1108/JFRA-05-2023-0256Journal of Financial Reporting and Accounting2023-09-11© 2023 Emerald Publishing LimitedSalah AlhammadiJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-09-1110.1108/JFRA-05-2023-0256https://www.emerald.com/insight/content/doi/10.1108/JFRA-05-2023-0256/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Blockchain technology and its applications in digital accounting systems: insights from Jordanian contexthttps://www.emerald.com/insight/content/doi/10.1108/JFRA-05-2023-0277/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe recent progress of digital accounting has significantly affected businesses’ sustainable production process. Businesses generally use digital accounting applications to automate their operational procedures and increase their corporate efficiencies through improved output quality and sustainability. Consequently, the purpose of this study is to look into the antecedent factors that directly and indirectly influence blockchain technology adoption in the context of digital accounting systems. The data of the current study were obtained from 346 accountants working in information technology companies. Partial least squares structural equation modeling was used to test the research proposal model. The empirical results confirmed that the adoption of blockchain technology is most considerably impacted by perceived usefulness, whereby it was also revealed that perceived ease of use has a direct and indirect effect on blockchain technology adoption. According to the researchers’ knowledge, this study addresses a vital research gap in the literature by suggesting a comprehensive research model that can help garner enhanced usage of blockchain technology and its implications in digital accounting systems in the Jordanian context.Blockchain technology and its applications in digital accounting systems: insights from Jordanian context
Manaf Al-Okaily, Dmaithan Al-Majali, Aws Al-Okaily, Tha’er Majali
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

The recent progress of digital accounting has significantly affected businesses’ sustainable production process. Businesses generally use digital accounting applications to automate their operational procedures and increase their corporate efficiencies through improved output quality and sustainability. Consequently, the purpose of this study is to look into the antecedent factors that directly and indirectly influence blockchain technology adoption in the context of digital accounting systems.

The data of the current study were obtained from 346 accountants working in information technology companies. Partial least squares structural equation modeling was used to test the research proposal model.

The empirical results confirmed that the adoption of blockchain technology is most considerably impacted by perceived usefulness, whereby it was also revealed that perceived ease of use has a direct and indirect effect on blockchain technology adoption.

According to the researchers’ knowledge, this study addresses a vital research gap in the literature by suggesting a comprehensive research model that can help garner enhanced usage of blockchain technology and its implications in digital accounting systems in the Jordanian context.

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Blockchain technology and its applications in digital accounting systems: insights from Jordanian context10.1108/JFRA-05-2023-0277Journal of Financial Reporting and Accounting2023-12-26© 2023 Emerald Publishing LimitedManaf Al-OkailyDmaithan Al-MajaliAws Al-OkailyTha’er MajaliJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-12-2610.1108/JFRA-05-2023-0277https://www.emerald.com/insight/content/doi/10.1108/JFRA-05-2023-0277/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The role of forensic accounting skills in fraud detection and the moderating effect of CAATTs application: evidence from Egypthttps://www.emerald.com/insight/content/doi/10.1108/JFRA-05-2023-0279/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to investigate the role of forensic accounting skills in enhancing auditor’s self-efficacy towards fraud detection in Egypt. Additionally, it explores the moderating effect of computer-assisted audit techniques and tools (CAATTs) application on the relationship between accounting and auditing skills and auditor’s self-efficacy, as well as its role in enhancing fraud detection. A cross-sectional survey was developed and distributed to 117 external auditors working in Egypt. Partial least square structural equation modelling is used to examine the study hypotheses. The results show a significant direct relationship between effective communication skills, psycho-social skills, accounting and auditing skills and an auditor’s self-efficacy. Additionally, the results show a significant direct relationship between auditor’s self-efficacy and fraud detection. It is revealed that CAATTs application moderate the relationship between auditor’s self-efficacy and fraud detection. In contrast, the results do not show a significant relationship between technical and analytical skills and auditor’s self-efficacy. The originality of this research paper lies in its exploration of the role of forensic accounting skills in enhancing auditor’s self-efficacy towards fraud detection in Egypt. It sheds light on the role of improved auditor’s self-efficacy in detecting fraud. Additionally, this study further enhances the understanding of the potential benefits of using technological advancements in the audit process. It provides insights for accounting professionals and regulatory bodies in Egypt, highlighting the importance of leveraging forensic accounting skills and using CAATTs to enhance fraud detection efforts.The role of forensic accounting skills in fraud detection and the moderating effect of CAATTs application: evidence from Egypt
Abdul Rahman Al Natour, Hamzah Al-Mawali, Hala Zaidan, Yasmeen Hany Zaky Said
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to investigate the role of forensic accounting skills in enhancing auditor’s self-efficacy towards fraud detection in Egypt. Additionally, it explores the moderating effect of computer-assisted audit techniques and tools (CAATTs) application on the relationship between accounting and auditing skills and auditor’s self-efficacy, as well as its role in enhancing fraud detection.

A cross-sectional survey was developed and distributed to 117 external auditors working in Egypt. Partial least square structural equation modelling is used to examine the study hypotheses.

The results show a significant direct relationship between effective communication skills, psycho-social skills, accounting and auditing skills and an auditor’s self-efficacy. Additionally, the results show a significant direct relationship between auditor’s self-efficacy and fraud detection. It is revealed that CAATTs application moderate the relationship between auditor’s self-efficacy and fraud detection. In contrast, the results do not show a significant relationship between technical and analytical skills and auditor’s self-efficacy.

The originality of this research paper lies in its exploration of the role of forensic accounting skills in enhancing auditor’s self-efficacy towards fraud detection in Egypt. It sheds light on the role of improved auditor’s self-efficacy in detecting fraud. Additionally, this study further enhances the understanding of the potential benefits of using technological advancements in the audit process. It provides insights for accounting professionals and regulatory bodies in Egypt, highlighting the importance of leveraging forensic accounting skills and using CAATTs to enhance fraud detection efforts.

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The role of forensic accounting skills in fraud detection and the moderating effect of CAATTs application: evidence from Egypt10.1108/JFRA-05-2023-0279Journal of Financial Reporting and Accounting2023-09-12© 2023 Emerald Publishing LimitedAbdul Rahman Al NatourHamzah Al-MawaliHala ZaidanYasmeen Hany Zaky SaidJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-09-1210.1108/JFRA-05-2023-0279https://www.emerald.com/insight/content/doi/10.1108/JFRA-05-2023-0279/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Investor response to financial news in the digital transformation era: the impact of accounting disclosures and herding behavior as indirect effecthttps://www.emerald.com/insight/content/doi/10.1108/JFRA-05-2023-0287/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to examine investors' reactions to bad financial news (IRBFN) based on complex financial accounting disclosures (CFAD) as well as how investors' herding behavior influences investor reactions in United Arab Emirates (UAE) project-based organizations (PBOs). The primary data collection was furnished via online questionnaires, and 310 completed questionnaires were analyzed using structural equation modelling (SEM), moderation analysis, multiple regression simulations and path analysis. The study shows that four out of the five CFAD dimensions observed – investors’ relations (IR), board and management structure, transparency disclosure and other disclosure channels – have a direct influence on investor's reactions to bad financial news, with the exception of “external auditing and audit service”. In addition, investor herding has a moderation impact on the relationship between CFAD and IRBFN. There is a possibility that the broad view of the results may be limited by the size of the research sample. The paper's findings should therefore be authenticated at an intercontinental level with the same conceptual framework in other nations. The purpose of modeling stakeholders' decision-making process is to improve their decisions and to control their reactions that may negatively affect PBOs in the UAE. This research contributes to planned behavior theory and agency theory in the UAE context, both of which are empirically tested.Investor response to financial news in the digital transformation era: the impact of accounting disclosures and herding behavior as indirect effect
Shatha Mustafa Hussain, Amer Alaya
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to examine investors' reactions to bad financial news (IRBFN) based on complex financial accounting disclosures (CFAD) as well as how investors' herding behavior influences investor reactions in United Arab Emirates (UAE) project-based organizations (PBOs).

The primary data collection was furnished via online questionnaires, and 310 completed questionnaires were analyzed using structural equation modelling (SEM), moderation analysis, multiple regression simulations and path analysis.

The study shows that four out of the five CFAD dimensions observed – investors’ relations (IR), board and management structure, transparency disclosure and other disclosure channels – have a direct influence on investor's reactions to bad financial news, with the exception of “external auditing and audit service”. In addition, investor herding has a moderation impact on the relationship between CFAD and IRBFN.

There is a possibility that the broad view of the results may be limited by the size of the research sample. The paper's findings should therefore be authenticated at an intercontinental level with the same conceptual framework in other nations.

The purpose of modeling stakeholders' decision-making process is to improve their decisions and to control their reactions that may negatively affect PBOs in the UAE.

This research contributes to planned behavior theory and agency theory in the UAE context, both of which are empirically tested.

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Investor response to financial news in the digital transformation era: the impact of accounting disclosures and herding behavior as indirect effect10.1108/JFRA-05-2023-0287Journal of Financial Reporting and Accounting2023-11-14© 2023 Emerald Publishing LimitedShatha Mustafa HussainAmer AlayaJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-11-1410.1108/JFRA-05-2023-0287https://www.emerald.com/insight/content/doi/10.1108/JFRA-05-2023-0287/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Are socially responsible firms responsible to accounting? A meta-analysis of the relationship between corporate social responsibility and earnings managementhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-06-2021-0171/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to analyze the relationship between corporate social responsibility (CSR) and quality of accounting report, especially on earnings management (EM). In addition, potential moderators of this relationship are examined. After a comprehensive study of potential mechanisms, the authors obtain plenty of empirical results to open the black box of the link between CSR and EM. Meta-analysis is applied on 51 studies from 35 papers. Further analysis is also carried out to determine the moderating effects, such as the cultural and sample selection differences in these papers. CSR is negatively associated with EM. In addition, this effect is moderated by cultural difference, CSR measurement, and year of sample selection. Two patterns of the hypothesis between CSR and EM are confirmed based on agency cost theory, a theoretical shift of corporate ethics based on organizational moral perspective. Several useful suggestions are also provided for future studies on the empirical model and sample selection. Further research is necessary to clarify the agency cost behind the two theoretical patterns. CSR is not a tool for firms to market but rather a strategy to ensure their consistency with moral principles, indicating that management should pay more attention to the potential damage of the incongruence between CSR and accounting reporting quality. CSR reporting quality remains an important issue for legislature to guarantee continued firm operations. To the best of the authors’ knowledge, this study is the first to analyze the CSR and EM link using a meta-analysis and to consider its underlying mechanism under the global environment. Previous method design and sample selection are reviewed to provide reference for future studies.Are socially responsible firms responsible to accounting? A meta-analysis of the relationship between corporate social responsibility and earnings management
Hao Shi, Haijian Liu, Yixue Wu
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to analyze the relationship between corporate social responsibility (CSR) and quality of accounting report, especially on earnings management (EM). In addition, potential moderators of this relationship are examined.

After a comprehensive study of potential mechanisms, the authors obtain plenty of empirical results to open the black box of the link between CSR and EM. Meta-analysis is applied on 51 studies from 35 papers. Further analysis is also carried out to determine the moderating effects, such as the cultural and sample selection differences in these papers.

CSR is negatively associated with EM. In addition, this effect is moderated by cultural difference, CSR measurement, and year of sample selection.

Two patterns of the hypothesis between CSR and EM are confirmed based on agency cost theory, a theoretical shift of corporate ethics based on organizational moral perspective. Several useful suggestions are also provided for future studies on the empirical model and sample selection. Further research is necessary to clarify the agency cost behind the two theoretical patterns.

CSR is not a tool for firms to market but rather a strategy to ensure their consistency with moral principles, indicating that management should pay more attention to the potential damage of the incongruence between CSR and accounting reporting quality. CSR reporting quality remains an important issue for legislature to guarantee continued firm operations.

To the best of the authors’ knowledge, this study is the first to analyze the CSR and EM link using a meta-analysis and to consider its underlying mechanism under the global environment. Previous method design and sample selection are reviewed to provide reference for future studies.

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Are socially responsible firms responsible to accounting? A meta-analysis of the relationship between corporate social responsibility and earnings management10.1108/JFRA-06-2021-0171Journal of Financial Reporting and Accounting2022-06-10© 2022 Emerald Publishing LimitedHao ShiHaijian LiuYixue WuJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-06-1010.1108/JFRA-06-2021-0171https://www.emerald.com/insight/content/doi/10.1108/JFRA-06-2021-0171/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
Principles-based standards and accountants’ financial reporting judgments: does work experience matter?https://www.emerald.com/insight/content/doi/10.1108/JFRA-06-2022-0213/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe purpose of this study is to examine accountants’ application of principles-based accounting standards to a lawsuit contingency recognition scenario and the potential role that accounting work experience plays in mitigating accountants’ aggressive financial reporting. This study presents a 2 × 2 between-subjects experiment with accounting experience (measured as high vs low) and contingency type (asset vs liability) as independent variables and accountants’ lawsuit contingency conservatism likelihood judgments and US$ recognition recommendations as the dependent variables. Consistent with expectations, findings indicate that more experienced accountants are more likely to recognize liabilities and items that decrease income and less likely to recognize assets and items that increase income than their less experienced counterparts. Accountants also recommended recognizing lower (higher) mean US$ amounts for assets (liabilities), as expected. Supplemental analyses show a significant moderated-mediated effect whereby the interactive effect of contingency type and accounting experience on individuals’ US$ recognition recommendations is partially mediated through the nature of the conservatism judgment. The finding that less experienced accountants report more aggressively than more experienced accountants when applying a principles-based standard supports the call for using judgment frameworks in imprecise standard settings and suggests that firms may want to ensure that accountants with adequate work experience are on hand as U.S. generally accepted accounting principles become more principles-based over time. To the best of the authors’ knowledge, this study is the first to examine the impact of accounting work experience on the application of principles-based accounting standards and the mitigation of aggressive financial reporting. Our supplemental analyses also identify the nature of the conservatism judgment as a mediating mechanism which partially explains more experienced accountants’ US$ asset and liability recognition recommendations.Principles-based standards and accountants’ financial reporting judgments: does work experience matter?
Anna M. Cianci, George T. Tsakumis
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

The purpose of this study is to examine accountants’ application of principles-based accounting standards to a lawsuit contingency recognition scenario and the potential role that accounting work experience plays in mitigating accountants’ aggressive financial reporting.

This study presents a 2 × 2 between-subjects experiment with accounting experience (measured as high vs low) and contingency type (asset vs liability) as independent variables and accountants’ lawsuit contingency conservatism likelihood judgments and US$ recognition recommendations as the dependent variables.

Consistent with expectations, findings indicate that more experienced accountants are more likely to recognize liabilities and items that decrease income and less likely to recognize assets and items that increase income than their less experienced counterparts. Accountants also recommended recognizing lower (higher) mean US$ amounts for assets (liabilities), as expected. Supplemental analyses show a significant moderated-mediated effect whereby the interactive effect of contingency type and accounting experience on individuals’ US$ recognition recommendations is partially mediated through the nature of the conservatism judgment.

The finding that less experienced accountants report more aggressively than more experienced accountants when applying a principles-based standard supports the call for using judgment frameworks in imprecise standard settings and suggests that firms may want to ensure that accountants with adequate work experience are on hand as U.S. generally accepted accounting principles become more principles-based over time.

To the best of the authors’ knowledge, this study is the first to examine the impact of accounting work experience on the application of principles-based accounting standards and the mitigation of aggressive financial reporting. Our supplemental analyses also identify the nature of the conservatism judgment as a mediating mechanism which partially explains more experienced accountants’ US$ asset and liability recognition recommendations.

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Principles-based standards and accountants’ financial reporting judgments: does work experience matter?10.1108/JFRA-06-2022-0213Journal of Financial Reporting and Accounting2023-05-08© 2023 Emerald Publishing LimitedAnna M. CianciGeorge T. TsakumisJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-05-0810.1108/JFRA-06-2022-0213https://www.emerald.com/insight/content/doi/10.1108/JFRA-06-2022-0213/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Does AC effectiveness mediate the relationship between knowledge intensity and firm performance? Evidence from Indiahttps://www.emerald.com/insight/content/doi/10.1108/JFRA-06-2022-0214/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe study aims to investigate the mediation effect of the Audit Committee’s (AC) effectiveness on the relationship between knowledge intensity and firm performance (FP) by considering the disparate effect of each AC characteristic on its effectiveness. The study uses the partial least squares-structural equation model (PLS-SEM) to weigh the AC characteristics for its effectiveness and analyzes the relationships between the variables included in the models. Data was collected from authentic sources for 133 National Stock Exchange (NSE)-listed companies in six industries covering the period 2016 to 2020. The results indicate that eight out of eleven AC characteristics, namely, nonexecutive directors, independence, expertise, AC-charter, multiple directorships, frequency of AC meetings, attendance of AC meetings and board meetings by AC directors, significantly influence the AC effectiveness while mediating the relationship between knowledge intensity and FP. Further, each characteristic of AC has a disparate effect on AC effectiveness depending on the measurement context. Apart from guiding the policymakers, management and stakeholders to effectively use AC characteristics in enhancing FP, this study further contributes to the literature by providing a new way to weight AC characteristics based on their individual contributions; and exploring new path models to analyze the multidimensional effect of various AC characteristics. To the best of the authors’ knowledge, the study is the first to examine the mediation role of AC effectiveness on the relationship between the knowledge intensity of the firms and their performance. It demonstrates improvisation in measuring AC effectiveness using the disparate weights for each AC characteristic, computed based on their relative contribution to AC effectiveness.Does AC effectiveness mediate the relationship between knowledge intensity and firm performance? Evidence from India
Abhisheck Kumar Singhania, Nagari Mohan Panda
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

The study aims to investigate the mediation effect of the Audit Committee’s (AC) effectiveness on the relationship between knowledge intensity and firm performance (FP) by considering the disparate effect of each AC characteristic on its effectiveness.

The study uses the partial least squares-structural equation model (PLS-SEM) to weigh the AC characteristics for its effectiveness and analyzes the relationships between the variables included in the models. Data was collected from authentic sources for 133 National Stock Exchange (NSE)-listed companies in six industries covering the period 2016 to 2020.

The results indicate that eight out of eleven AC characteristics, namely, nonexecutive directors, independence, expertise, AC-charter, multiple directorships, frequency of AC meetings, attendance of AC meetings and board meetings by AC directors, significantly influence the AC effectiveness while mediating the relationship between knowledge intensity and FP. Further, each characteristic of AC has a disparate effect on AC effectiveness depending on the measurement context.

Apart from guiding the policymakers, management and stakeholders to effectively use AC characteristics in enhancing FP, this study further contributes to the literature by providing a new way to weight AC characteristics based on their individual contributions; and exploring new path models to analyze the multidimensional effect of various AC characteristics.

To the best of the authors’ knowledge, the study is the first to examine the mediation role of AC effectiveness on the relationship between the knowledge intensity of the firms and their performance. It demonstrates improvisation in measuring AC effectiveness using the disparate weights for each AC characteristic, computed based on their relative contribution to AC effectiveness.

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Does AC effectiveness mediate the relationship between knowledge intensity and firm performance? Evidence from India10.1108/JFRA-06-2022-0214Journal of Financial Reporting and Accounting2022-10-13© 2022 Emerald Publishing LimitedAbhisheck Kumar SinghaniaNagari Mohan PandaJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-10-1310.1108/JFRA-06-2022-0214https://www.emerald.com/insight/content/doi/10.1108/JFRA-06-2022-0214/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
The female audit committee members expertise and experience: is there a trade-off between accrual-based and real earnings management?https://www.emerald.com/insight/content/doi/10.1108/JFRA-06-2022-0221/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to examine the impact of female AC representation (ACFEMALE) following the adoption of gender quota legislation on the trade-off between accrual-based (AEM) and real earnings management (REM), taking into consideration their demographic attributes. A sample of 89 companies listed in the SBF 120 during the period 2012–2018 has been employed. The authors have obtained the explanatory variables using the principal component analysis method. To provide empirical evidence for the testable hypotheses, the authors have estimated a least squares regression. A differences-in-differences analysis has been estimated to analyze the impact of the gender quota law imposition. The regression results indicate that companies with a higher proportion of ACFEMALE have more tendency to use REM rather than AEM. The authors further denote that the ACFEMALE expertise negatively affects AEM. Moreover, the authors find that the ACFEMALE experience helps reduce both AEM and REM. Results from the DID analysis exhibit that the ACFEMALE effect on the trade-off between REM and AEM occurs for the period that follows the implementation of the French gender quota law. Furthermore, the authors denote that the negative link between the ACFEMALE experience and AEM and REM dissipates for both the pre- and the postgender quota law adoption. This study extends the prior existing research by examining, for the first time, the relationship between female directors’ appointments and the trade-off between accrual-based and REM. As well as, the research provides primary evidence on the channels through which female directors may affect the managerial preference regarding the earnings management techniques AEM or REM.The female audit committee members expertise and experience: is there a trade-off between accrual-based and real earnings management?
Yosra MNIF, Marwa Tahri
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to examine the impact of female AC representation (ACFEMALE) following the adoption of gender quota legislation on the trade-off between accrual-based (AEM) and real earnings management (REM), taking into consideration their demographic attributes.

A sample of 89 companies listed in the SBF 120 during the period 2012–2018 has been employed. The authors have obtained the explanatory variables using the principal component analysis method. To provide empirical evidence for the testable hypotheses, the authors have estimated a least squares regression. A differences-in-differences analysis has been estimated to analyze the impact of the gender quota law imposition.

The regression results indicate that companies with a higher proportion of ACFEMALE have more tendency to use REM rather than AEM. The authors further denote that the ACFEMALE expertise negatively affects AEM. Moreover, the authors find that the ACFEMALE experience helps reduce both AEM and REM. Results from the DID analysis exhibit that the ACFEMALE effect on the trade-off between REM and AEM occurs for the period that follows the implementation of the French gender quota law. Furthermore, the authors denote that the negative link between the ACFEMALE experience and AEM and REM dissipates for both the pre- and the postgender quota law adoption.

This study extends the prior existing research by examining, for the first time, the relationship between female directors’ appointments and the trade-off between accrual-based and REM. As well as, the research provides primary evidence on the channels through which female directors may affect the managerial preference regarding the earnings management techniques AEM or REM.

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The female audit committee members expertise and experience: is there a trade-off between accrual-based and real earnings management?10.1108/JFRA-06-2022-0221Journal of Financial Reporting and Accounting2023-06-15© 2023 Emerald Publishing LimitedYosra MNIFMarwa TahriJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-06-1510.1108/JFRA-06-2022-0221https://www.emerald.com/insight/content/doi/10.1108/JFRA-06-2022-0221/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Politically connected boards: the role of country governance, regulated industry, firm size, and institutional ownershiphttps://www.emerald.com/insight/content/doi/10.1108/JFRA-06-2022-0222/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to investigate whether country governance, regulated industry and firm-level characteristics, namely, ownership structure and firm size, are associated with the likelihood of firms having a politically connected board (PCB). This study also examines whether country governance and concentrated ownership moderates the association between institutional ownership and PCB. This study uses cross-country analysis using 20 countries and hand-collected PCB data from 574 firms and 1,701 firm-year. This study performs logit regression analyses to examine hypotheses. The results document that countries’ accountability, industry type and institutional ownership are associated with the likelihood of firms having a PCB. This study also finds that country governance, especially accountability, moderates the relationship between institutional ownership and PCBs. The results thus indicate the importance of country governance, especially accountability, in determining institutional investors’ political strategies. This study provides several implications. First, firms tend to elect PCBs as a non-financial strategy because it arguably delivers additional resources and improves their performance, especially in countries with lower accountability and regulated industries. Meanwhile, investors and management must also hire PCBs cautiously because PCBs are closely related to agency issues. Agency issues reflect on the finding that institutional investors tend to avoid PCBs. However, the relationship between institutional investors and PCBs is closely related to the country-level context, especially accountability. This study also advises policymakers that country governance, especially accountability, is crucial in regulating the relationship between business and politics. This study uses a relatively large number of new PCB and institutional ownership data collected manually from 20 countries. This study also examines several variables of country governance, such as accountability to PCB decisions that have not been tested before. This study examines the relationship between institutional ownership and PCB ownership decisions that were not examined before and uses a cross-country sample. In addition, to the best of the authors’ knowledge, this study is the first one that examines the role of state governance, especially accountability for the relationship between institutional ownership and PCBs.Politically connected boards: the role of country governance, regulated industry, firm size, and institutional ownership
A.A.G. Krisna Murti, Sidharta Utama, Ancella Anitawati Hermawan, Yulianti Abbas
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to investigate whether country governance, regulated industry and firm-level characteristics, namely, ownership structure and firm size, are associated with the likelihood of firms having a politically connected board (PCB). This study also examines whether country governance and concentrated ownership moderates the association between institutional ownership and PCB.

This study uses cross-country analysis using 20 countries and hand-collected PCB data from 574 firms and 1,701 firm-year. This study performs logit regression analyses to examine hypotheses.

The results document that countries’ accountability, industry type and institutional ownership are associated with the likelihood of firms having a PCB. This study also finds that country governance, especially accountability, moderates the relationship between institutional ownership and PCBs. The results thus indicate the importance of country governance, especially accountability, in determining institutional investors’ political strategies.

This study provides several implications. First, firms tend to elect PCBs as a non-financial strategy because it arguably delivers additional resources and improves their performance, especially in countries with lower accountability and regulated industries. Meanwhile, investors and management must also hire PCBs cautiously because PCBs are closely related to agency issues. Agency issues reflect on the finding that institutional investors tend to avoid PCBs. However, the relationship between institutional investors and PCBs is closely related to the country-level context, especially accountability. This study also advises policymakers that country governance, especially accountability, is crucial in regulating the relationship between business and politics.

This study uses a relatively large number of new PCB and institutional ownership data collected manually from 20 countries. This study also examines several variables of country governance, such as accountability to PCB decisions that have not been tested before. This study examines the relationship between institutional ownership and PCB ownership decisions that were not examined before and uses a cross-country sample. In addition, to the best of the authors’ knowledge, this study is the first one that examines the role of state governance, especially accountability for the relationship between institutional ownership and PCBs.

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Politically connected boards: the role of country governance, regulated industry, firm size, and institutional ownership10.1108/JFRA-06-2022-0222Journal of Financial Reporting and Accounting2022-12-21© 2022 Emerald Publishing LimitedA.A.G. Krisna MurtiSidharta UtamaAncella Anitawati HermawanYulianti AbbasJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-12-2110.1108/JFRA-06-2022-0222https://www.emerald.com/insight/content/doi/10.1108/JFRA-06-2022-0222/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
Firm performance as a mediator of the relationship between CEO narcissism and positive rhetorical tonehttps://www.emerald.com/insight/content/doi/10.1108/JFRA-06-2022-0224/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe purpose of this paper is to examine how chief executive officers’ (CEOs) narcissism impacts firm performance and how this, in turn, affects a CEO’s positive rhetorical tone. The narcissism score is measured by using an analytical composite score for each CEO based on eight factors. The paper uses textual analysis on a sample of 848 CEO letters of US firms over the period 2010–2019. WarpPLS software, version 7.0 was used to conduct structural equation modeling through the partial least squares because a non-linear algorithm exists between CEO narcissism, firm performance and positive tone, and the values of path coefficients moved from non-significant to significant. The results suggest that performance partially mediates the relationship between CEO narcissism and positive tone. This indicates that not all the positivity expressed by narcissistic CEOs is opportunism; some of it is indeed driven by better performance. The reported findings indicate that firm performance explains one-quarter of a CEO’s positive words, whereas some three-quarters of the positivity is driven by a narcissistic CEO (i.e. opportunism). A comparison of letters signed by highly narcissistic and less narcissistic leaders reveals that among those letters signed by highly narcissistic leaders, firm performance plays a significant mediating role between narcissistic tendencies and positive tone. However, among those with less narcissistic score, there is no evidence that performance mediates the tone and narcissism. Interestingly, both highly narcissistic and less narcissistic CEOs use positive words and optimistic expressions even when their firms perform poorly or negatively. The results help shareholders be aware that CEOs may opportunistically use their personal characteristics and language to manipulate them. Data limitations about women CEOs were one of the reasons behind the small proportion of women CEOs in this study, making it low in generalizability. A comprehensive review showed that none of previous studies examined the more ambiguous relationship between a CEO’s narcissist tendency, the firm’s performance, and CEO rhetorical tone. As one set of studies focused on Narcissism → Performance, and the other one on Performance → Tone, this current study completes the picture with Narcissism → Performance → Tone.Firm performance as a mediator of the relationship between CEO narcissism and positive rhetorical tone
Mohamed M. Tailab, Nourhene BenYoussef, Jihad Al-Okaily
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

The purpose of this paper is to examine how chief executive officers’ (CEOs) narcissism impacts firm performance and how this, in turn, affects a CEO’s positive rhetorical tone.

The narcissism score is measured by using an analytical composite score for each CEO based on eight factors. The paper uses textual analysis on a sample of 848 CEO letters of US firms over the period 2010–2019. WarpPLS software, version 7.0 was used to conduct structural equation modeling through the partial least squares because a non-linear algorithm exists between CEO narcissism, firm performance and positive tone, and the values of path coefficients moved from non-significant to significant.

The results suggest that performance partially mediates the relationship between CEO narcissism and positive tone. This indicates that not all the positivity expressed by narcissistic CEOs is opportunism; some of it is indeed driven by better performance. The reported findings indicate that firm performance explains one-quarter of a CEO’s positive words, whereas some three-quarters of the positivity is driven by a narcissistic CEO (i.e. opportunism). A comparison of letters signed by highly narcissistic and less narcissistic leaders reveals that among those letters signed by highly narcissistic leaders, firm performance plays a significant mediating role between narcissistic tendencies and positive tone. However, among those with less narcissistic score, there is no evidence that performance mediates the tone and narcissism. Interestingly, both highly narcissistic and less narcissistic CEOs use positive words and optimistic expressions even when their firms perform poorly or negatively.

The results help shareholders be aware that CEOs may opportunistically use their personal characteristics and language to manipulate them. Data limitations about women CEOs were one of the reasons behind the small proportion of women CEOs in this study, making it low in generalizability.

A comprehensive review showed that none of previous studies examined the more ambiguous relationship between a CEO’s narcissist tendency, the firm’s performance, and CEO rhetorical tone. As one set of studies focused on Narcissism → Performance, and the other one on Performance → Tone, this current study completes the picture with Narcissism → Performance → Tone.

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Firm performance as a mediator of the relationship between CEO narcissism and positive rhetorical tone10.1108/JFRA-06-2022-0224Journal of Financial Reporting and Accounting2023-02-13© 2023 Emerald Publishing LimitedMohamed M. TailabNourhene BenYoussefJihad Al-OkailyJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-02-1310.1108/JFRA-06-2022-0224https://www.emerald.com/insight/content/doi/10.1108/JFRA-06-2022-0224/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Public perceptions of governance and tax evasion: insights from developed and developing economieshttps://www.emerald.com/insight/content/doi/10.1108/JFRA-06-2022-0234/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to explore how the role of the perception of good public governance reduces tax evasion (TE). Besides, this study investigates whether the nexus of public governance and TE differs between developed and developing economies. Apart from the ordinary least squares (OLS) model, this study uses the linear mixed modeling technique. The World Governance Indicators and the multiple causes estimation (MIMIC) method are used to measure public governance. The shadow economy is used as a proxy for TE. The results show that people's perceptions of public governance and the quality of government institutions are core elements that influence tax-evasion behavior. Besides, the rule of law (RoL) and political stability (PS) significantly impact tax-evasion behavior in developing countries. Nevertheless, the RoL, the control of corruption and PS are the most critical tax-evasion determinants among public governance indicators for developed countries. Regulatory quality shows a substantial positive relationship with TE in developed but not developing countries. This paper provides a guide for policymakers on reducing tax-evasion behavior by paying more attention to maintaining the RoL and PS and fighting corruption. Additionally, this study highlights the importance of people's perceptions of the government's pursuit of the above policy-related improvements, which, in turn, affect their tax behavior. To the best of the authors’ knowledge, this study is the first to explore the role of people's perceptions of improvements in public governance and how this can reduce TE behavior in developed and developing economies. Unlike prior studies, this study used the linear mixed model method, which is more advantageous than OLS and produces robust estimators.Public perceptions of governance and tax evasion: insights from developed and developing economies
Khalil Nimer, Ahmed Bani-Mustafa, Anas AlQudah, Mamoon Alameen, Ahmed Hassanein
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to explore how the role of the perception of good public governance reduces tax evasion (TE). Besides, this study investigates whether the nexus of public governance and TE differs between developed and developing economies.

Apart from the ordinary least squares (OLS) model, this study uses the linear mixed modeling technique. The World Governance Indicators and the multiple causes estimation (MIMIC) method are used to measure public governance. The shadow economy is used as a proxy for TE.

The results show that people's perceptions of public governance and the quality of government institutions are core elements that influence tax-evasion behavior. Besides, the rule of law (RoL) and political stability (PS) significantly impact tax-evasion behavior in developing countries. Nevertheless, the RoL, the control of corruption and PS are the most critical tax-evasion determinants among public governance indicators for developed countries. Regulatory quality shows a substantial positive relationship with TE in developed but not developing countries.

This paper provides a guide for policymakers on reducing tax-evasion behavior by paying more attention to maintaining the RoL and PS and fighting corruption. Additionally, this study highlights the importance of people's perceptions of the government's pursuit of the above policy-related improvements, which, in turn, affect their tax behavior.

To the best of the authors’ knowledge, this study is the first to explore the role of people's perceptions of improvements in public governance and how this can reduce TE behavior in developed and developing economies. Unlike prior studies, this study used the linear mixed model method, which is more advantageous than OLS and produces robust estimators.

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Public perceptions of governance and tax evasion: insights from developed and developing economies10.1108/JFRA-06-2022-0234Journal of Financial Reporting and Accounting2022-12-15© 2022 Emerald Publishing LimitedKhalil NimerAhmed Bani-MustafaAnas AlQudahMamoon AlameenAhmed HassaneinJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-12-1510.1108/JFRA-06-2022-0234https://www.emerald.com/insight/content/doi/10.1108/JFRA-06-2022-0234/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
Explaining IFRS reluctance with case study vignetteshttps://www.emerald.com/insight/content/doi/10.1108/JFRA-06-2022-0236/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to analyze why listed Taiwanese firms uniquely rejected the early adoption of International Financial Reporting Standards (IFRS) in 2012. It investigates the underlying decision-making processes behind this policy reluctance to further understand the continuous phenomenon of rare voluntary IFRS adoption. It reports on fieldwork evidence obtained in situ by in-depth interviewing in Mandarin. It uses qualitative methods, complemented by quantitative cost-benefit metrics of IFRS adoption. It presents five diverse illustrative case-study vignettes, using a judgment sample based on expert opinion. While the net-benefits of implementing IFRS varied across firms, this study’s unanimous finding was that no firms (in the sample or population) adopted IFRS early, despite stated intentions to the contrary. The key reasons for shunning early IFRS adoption were found to be frequent changes in regulations, insufficient benefits from adopting IFRS and the undermining of comparability across companies, compounded with scarce preparation time. Further, this study found that the Taiwanese accounting regulator’s reluctance toward IFRS adoption, partly caused by a long-standing US influence, contributed to this anomalous outcome. This study recommends two critical policy changes: more realistic timelines and less frequent regulatory changes. To the best of the authors’ knowledge, this is the first study to investigate the reasons behind the anomaly of no early adoption of IFRS in Taiwan, using new primary data and illustrative case studies. Its novelty lies in extending understanding beyond the existing quantitative literature on accounting standards, using new “thick” qualitative evidence on motives for such choices and decision-making processes, which have been neglected in previous work.Explaining IFRS reluctance with case study vignettes
Yu-Lin Hsu, Gavin C. Reid
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to analyze why listed Taiwanese firms uniquely rejected the early adoption of International Financial Reporting Standards (IFRS) in 2012. It investigates the underlying decision-making processes behind this policy reluctance to further understand the continuous phenomenon of rare voluntary IFRS adoption.

It reports on fieldwork evidence obtained in situ by in-depth interviewing in Mandarin. It uses qualitative methods, complemented by quantitative cost-benefit metrics of IFRS adoption. It presents five diverse illustrative case-study vignettes, using a judgment sample based on expert opinion.

While the net-benefits of implementing IFRS varied across firms, this study’s unanimous finding was that no firms (in the sample or population) adopted IFRS early, despite stated intentions to the contrary. The key reasons for shunning early IFRS adoption were found to be frequent changes in regulations, insufficient benefits from adopting IFRS and the undermining of comparability across companies, compounded with scarce preparation time. Further, this study found that the Taiwanese accounting regulator’s reluctance toward IFRS adoption, partly caused by a long-standing US influence, contributed to this anomalous outcome.

This study recommends two critical policy changes: more realistic timelines and less frequent regulatory changes.

To the best of the authors’ knowledge, this is the first study to investigate the reasons behind the anomaly of no early adoption of IFRS in Taiwan, using new primary data and illustrative case studies. Its novelty lies in extending understanding beyond the existing quantitative literature on accounting standards, using new “thick” qualitative evidence on motives for such choices and decision-making processes, which have been neglected in previous work.

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Explaining IFRS reluctance with case study vignettes10.1108/JFRA-06-2022-0236Journal of Financial Reporting and Accounting2023-03-14© 2023 Emerald Publishing LimitedYu-Lin HsuGavin C. ReidJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-03-1410.1108/JFRA-06-2022-0236https://www.emerald.com/insight/content/doi/10.1108/JFRA-06-2022-0236/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
IFRS 9, earnings management and capital management by European bankshttps://www.emerald.com/insight/content/doi/10.1108/JFRA-06-2022-0237/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe purpose of this paper is to compare earnings management (EM) and capital management (CM) by European banks before and after the adoption of IFRS 9. After IFRS 9, banks have more discretion in recognizing loan-loss provisions than before IFRS 9. Hence, after IFRS 9, banks could use EM and CM to a greater extent. This paper analyzes a sample of European banks and uses regression analysis. First, this paper examines whether EM and CM changed after IFRS 9 was adopted. Next, this study examines whether any changes in EM and CM under IFRS 9 depend on regulatory quality (RQ) in the country where banks are located. This paper has three results. First, after IFRS 9, EM increased relative to before IFRS 9. Second, after IFRS 9, CM increased relative to before IFRS 9. Third, this increase in EM was only for banks in countries with low RQ – in countries with high RQ, this study finds no change in EM after IFRS 9. Altogether, these results suggest that, first, EM and CM increased after IFRS 9 and, second, this increase in EM depended on the RQ of a bank’s country. This paper identifies how the adoption of IFRS 9 affected EM and CM by European banks. The main contribution of this paper is that it examines the impact of the adoption of IFRS 9 on EM and CM by European banks using data from banks’ actual financial statements.IFRS 9, earnings management and capital management by European banks
Mohammadmahdi Norouzpour, Egor Nikulin, Jeff Downing
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

The purpose of this paper is to compare earnings management (EM) and capital management (CM) by European banks before and after the adoption of IFRS 9. After IFRS 9, banks have more discretion in recognizing loan-loss provisions than before IFRS 9. Hence, after IFRS 9, banks could use EM and CM to a greater extent.

This paper analyzes a sample of European banks and uses regression analysis. First, this paper examines whether EM and CM changed after IFRS 9 was adopted. Next, this study examines whether any changes in EM and CM under IFRS 9 depend on regulatory quality (RQ) in the country where banks are located.

This paper has three results. First, after IFRS 9, EM increased relative to before IFRS 9. Second, after IFRS 9, CM increased relative to before IFRS 9. Third, this increase in EM was only for banks in countries with low RQ – in countries with high RQ, this study finds no change in EM after IFRS 9. Altogether, these results suggest that, first, EM and CM increased after IFRS 9 and, second, this increase in EM depended on the RQ of a bank’s country.

This paper identifies how the adoption of IFRS 9 affected EM and CM by European banks. The main contribution of this paper is that it examines the impact of the adoption of IFRS 9 on EM and CM by European banks using data from banks’ actual financial statements.

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IFRS 9, earnings management and capital management by European banks10.1108/JFRA-06-2022-0237Journal of Financial Reporting and Accounting2023-06-05© 2023 Emerald Publishing LimitedMohammadmahdi NorouzpourEgor NikulinJeff DowningJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-06-0510.1108/JFRA-06-2022-0237https://www.emerald.com/insight/content/doi/10.1108/JFRA-06-2022-0237/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The impact of partner perfectionism on audit quality: the mediating role of professional skepticism in the Egyptian contexthttps://www.emerald.com/insight/content/doi/10.1108/JFRA-06-2023-0296/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to investigate the relationship between audit partner perfectionism traits and audit quality in Egypt, emphasizing the mediating role of professional skepticism. A mixed-methods approach was used, combining a questionnaire and scenario-based questions for audit partners with secondary data from audited financial statements. The relationships between study variables were tested using structural equation modeling. Results denote a significant indirect effect between partner perfectionism traits and audit quality through their professional skepticism. Perfectionism has a significant positive impact on partner professional skepticism, and skepticism influences audit quality. This study offers opportunities to enhance financial reporting quality, allowing investors to confidently allocate financial market resources. Audit firms can consider the personality traits of auditors in the selection process, team formation and designing training programs. Regulators can use these findings to consider the role of personality traits and attitudes in audit quality when developing regulations and quality assurance systems in Egypt. To the best of the authors’ knowledge, no studies have examined the effect of partners’ perfectionism traits on professional skepticism and audit quality, especially in Egypt. By examining audit partners, who shape the tone at the top and are accountable for reputation, this study adds a novel dimension to understanding the impact of their qualities on audit outcomes. Moreover, combining survey and secondary data allows us to link these qualities with audit quality, objectively testing our hypotheses.The impact of partner perfectionism on audit quality: the mediating role of professional skepticism in the Egyptian context
Mohamed Zaki Balboula, Eman Elsayed Elfar
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to investigate the relationship between audit partner perfectionism traits and audit quality in Egypt, emphasizing the mediating role of professional skepticism.

A mixed-methods approach was used, combining a questionnaire and scenario-based questions for audit partners with secondary data from audited financial statements. The relationships between study variables were tested using structural equation modeling.

Results denote a significant indirect effect between partner perfectionism traits and audit quality through their professional skepticism. Perfectionism has a significant positive impact on partner professional skepticism, and skepticism influences audit quality.

This study offers opportunities to enhance financial reporting quality, allowing investors to confidently allocate financial market resources. Audit firms can consider the personality traits of auditors in the selection process, team formation and designing training programs. Regulators can use these findings to consider the role of personality traits and attitudes in audit quality when developing regulations and quality assurance systems in Egypt.

To the best of the authors’ knowledge, no studies have examined the effect of partners’ perfectionism traits on professional skepticism and audit quality, especially in Egypt. By examining audit partners, who shape the tone at the top and are accountable for reputation, this study adds a novel dimension to understanding the impact of their qualities on audit outcomes. Moreover, combining survey and secondary data allows us to link these qualities with audit quality, objectively testing our hypotheses.

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The impact of partner perfectionism on audit quality: the mediating role of professional skepticism in the Egyptian context10.1108/JFRA-06-2023-0296Journal of Financial Reporting and Accounting2023-11-10© 2023 Emerald Publishing LimitedMohamed Zaki BalboulaEman Elsayed ElfarJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-11-1010.1108/JFRA-06-2023-0296https://www.emerald.com/insight/content/doi/10.1108/JFRA-06-2023-0296/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Capital market effects of integrated reporting quality: evidence from South African contexthttps://www.emerald.com/insight/content/doi/10.1108/JFRA-06-2023-0314/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe purpose of this study is to examine the interplay between integrated reporting quality (IRQ) and capital markets. More specifically, the authors test the impact of IRQ on stock liquidity, cost of capital and analyst forecast accuracy. The sample consists of listed firms on the Johannesburg Stock Exchange in South Africa, covering the period from 2012 to 2020. The IRQ measure used in this study is based on data from Ernst and Young. To test the proposed hypotheses, the authors conducted a generalized least squares regression analysis. The empirical results evince a positive relationship between IRQ and stock liquidity. However, the authors did not find a significant effect of IRQ on the cost of capital and financial analysts’ forecast accuracy. In robustness tests, it was shown that firms with a higher IRQ score exhibit higher liquidity and improved analyst forecast accuracy. Additional analysis indicates a negative association between IRQ and the cost of capital, as well as a positive association between IRQ and financial analyst forecast accuracy for firms with higher IRQ scores (TOP ten, Excellent, Good). The study stands as one of the initial endeavors to investigate the impact of IRQ on the capital market. It provides valuable insights for managers and policymakers who are interested in enhancing disclosure practices within the financial market. Furthermore, these findings are significant for investors as they make informed investment decisions.Capital market effects of integrated reporting quality: evidence from South African context
Nawar Boujelben, Manal Hadriche, Yosra Makni Fourati
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

The purpose of this study is to examine the interplay between integrated reporting quality (IRQ) and capital markets. More specifically, the authors test the impact of IRQ on stock liquidity, cost of capital and analyst forecast accuracy.

The sample consists of listed firms on the Johannesburg Stock Exchange in South Africa, covering the period from 2012 to 2020. The IRQ measure used in this study is based on data from Ernst and Young. To test the proposed hypotheses, the authors conducted a generalized least squares regression analysis.

The empirical results evince a positive relationship between IRQ and stock liquidity. However, the authors did not find a significant effect of IRQ on the cost of capital and financial analysts’ forecast accuracy. In robustness tests, it was shown that firms with a higher IRQ score exhibit higher liquidity and improved analyst forecast accuracy. Additional analysis indicates a negative association between IRQ and the cost of capital, as well as a positive association between IRQ and financial analyst forecast accuracy for firms with higher IRQ scores (TOP ten, Excellent, Good).

The study stands as one of the initial endeavors to investigate the impact of IRQ on the capital market. It provides valuable insights for managers and policymakers who are interested in enhancing disclosure practices within the financial market. Furthermore, these findings are significant for investors as they make informed investment decisions.

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Capital market effects of integrated reporting quality: evidence from South African context10.1108/JFRA-06-2023-0314Journal of Financial Reporting and Accounting2024-03-15© 2024 Emerald Publishing LimitedNawar BoujelbenManal HadricheYosra Makni FouratiJournal of Financial Reporting and Accountingahead-of-printahead-of-print2024-03-1510.1108/JFRA-06-2023-0314https://www.emerald.com/insight/content/doi/10.1108/JFRA-06-2023-0314/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Emerald Publishing Limited
The combined impact of IFRS mandatory adoption and institutional quality on the IPO companies’ underpricinghttps://www.emerald.com/insight/content/doi/10.1108/JFRA-07-2021-0199/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to examine the impact of the International Financial Reporting Standards (IFRS) mandate and differences in national institutional quality on the underpricing of Initial Public Offering (IPO) companies. Multiple Difference-in-Differences (DiD) ordinary least squares estimations were conducted for 100 corporations listed on the Saudi Arabian stock market using country-level institutional quality data from 2005 to 2017. IFRS requirements and improvements in institutional quality have a combined effect on minimizing IPO underpricing. The analysis of the combined impact of IFRS requirements and differences in transparency revealed that IPO vendors leave $5 on average for IPO investors to cash out post the IFRS mandate, compared to $29 previously. Thus, IFRS serves as a quality certification instrument that alleviates IPO investors’ ex ante uncertainties, even in nations with undeveloped institutions. The findings may be beneficial to researchers and policymakers. The results suggest that institutional quality enhancements and obligatory IFRS implementation highlight IFRS’s synergistic influence on the IPO market. While European harmonization efforts drove the adoption of IFRS in Europe in 2005, Saudi Arabia’s adoption of IFRS is not being driven by such initiatives (Daske et al., 2008; Persakis and Iatridis 2017). In reality, when IFRS was officially imposed in Saudi Arabia in 2008, it, like many other emerging market nations, made considerable reforms to its formal institutions. However, research on the combined impact of IFRS and disparities in institutional quality in emerging IPO markets remains sparse. Emerging markets represent more than half of economies that use IFRS. Therefore, to the best of the authors’ knowledge, this study is the first to conduct an empirical investigation to identify this combined effect in emerging countries using the DiD analytical technique. Equity market legislators remain concerned regarding IPO underpricing, as it has a detrimental influence on economic growth (Bova and Pereira, 2012; Jamaani and Ahmed, 2021; Mehmood et al., 2021). Depending on the degree of information asymmetry in national stock markets, underpricing costs increase the cost of going public for entrepreneurs. Consequently, prospective private firms are discouraged from accessing equity financing through the stock markets. This is likely to impede private sector development plans, causing a negative effect on economic growth. Emerging countries represent over 50% of the IFRS mandating economies. However, there is insufficient research on the combined effect of IFRS requirements and improvements in institutional quality in developing IPO markets. To the best of the authors’ knowledge, this study is the first empirical attempt to identify this combined effect in one of the largest developing countries. The results may aid academics and policymakers in better understanding the interaction between these two variables.The combined impact of IFRS mandatory adoption and institutional quality on the IPO companies’ underpricing
Fouad Jamaani, Manal Alidarous, Esraa Alharasis
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to examine the impact of the International Financial Reporting Standards (IFRS) mandate and differences in national institutional quality on the underpricing of Initial Public Offering (IPO) companies.

Multiple Difference-in-Differences (DiD) ordinary least squares estimations were conducted for 100 corporations listed on the Saudi Arabian stock market using country-level institutional quality data from 2005 to 2017.

IFRS requirements and improvements in institutional quality have a combined effect on minimizing IPO underpricing. The analysis of the combined impact of IFRS requirements and differences in transparency revealed that IPO vendors leave $5 on average for IPO investors to cash out post the IFRS mandate, compared to $29 previously. Thus, IFRS serves as a quality certification instrument that alleviates IPO investors’ ex ante uncertainties, even in nations with undeveloped institutions.

The findings may be beneficial to researchers and policymakers. The results suggest that institutional quality enhancements and obligatory IFRS implementation highlight IFRS’s synergistic influence on the IPO market. While European harmonization efforts drove the adoption of IFRS in Europe in 2005, Saudi Arabia’s adoption of IFRS is not being driven by such initiatives (Daske et al., 2008; Persakis and Iatridis 2017). In reality, when IFRS was officially imposed in Saudi Arabia in 2008, it, like many other emerging market nations, made considerable reforms to its formal institutions. However, research on the combined impact of IFRS and disparities in institutional quality in emerging IPO markets remains sparse. Emerging markets represent more than half of economies that use IFRS. Therefore, to the best of the authors’ knowledge, this study is the first to conduct an empirical investigation to identify this combined effect in emerging countries using the DiD analytical technique. Equity market legislators remain concerned regarding IPO underpricing, as it has a detrimental influence on economic growth (Bova and Pereira, 2012; Jamaani and Ahmed, 2021; Mehmood et al., 2021). Depending on the degree of information asymmetry in national stock markets, underpricing costs increase the cost of going public for entrepreneurs. Consequently, prospective private firms are discouraged from accessing equity financing through the stock markets. This is likely to impede private sector development plans, causing a negative effect on economic growth.

Emerging countries represent over 50% of the IFRS mandating economies. However, there is insufficient research on the combined effect of IFRS requirements and improvements in institutional quality in developing IPO markets. To the best of the authors’ knowledge, this study is the first empirical attempt to identify this combined effect in one of the largest developing countries. The results may aid academics and policymakers in better understanding the interaction between these two variables.

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The combined impact of IFRS mandatory adoption and institutional quality on the IPO companies’ underpricing10.1108/JFRA-07-2021-0199Journal of Financial Reporting and Accounting2022-05-17© 2022 Emerald Publishing LimitedFouad JamaaniManal AlidarousEsraa AlharasisJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-05-1710.1108/JFRA-07-2021-0199https://www.emerald.com/insight/content/doi/10.1108/JFRA-07-2021-0199/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
Community and environment disclosures and IPO long-run share price performancehttps://www.emerald.com/insight/content/doi/10.1108/JFRA-07-2022-0244/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to examine the relationship between the community and environment disclosures and the long-run share price performance of Malaysian initial public offering (IPO) companies. This study used secondary data through the content analysis of the annual reports and DataStream of 115 sampled IPOs listed on Bursa Malaysia from 2007 to 2015. The present study incorporated weighted least squares and quantile least squares to evaluate the relationship between the community and environment disclosures and IPO performance. The results show a positive and significant relationship between the extent and quality of community disclosures and IPO performance; while the extent and quality of environment disclosures have a negative and positive relationship, respectively, with IPO performance. These results suggest that community and environmental activities can be considered an effort to enhance Malaysian IPOs. These results suggest that Malaysian IPO companies should be involved consistently in corporate social responsibility disclosure, i.e. community and environmental activities, as they have a significant impact on the performance of Malaysian IPOs. The findings can facilitate financial institutions and regulatory agencies in driving companies to be more responsible regarding community and environmental disclosures. To the best of the authors’ knowledge, this study provides new insights into the relationship between the community and environment disclosures and the performance of Malaysian IPO companies.Community and environment disclosures and IPO long-run share price performance
Yasir Abdullah Abbas, Nurwati A. Ahmad-Zaluki, Waqas Mehmood
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to examine the relationship between the community and environment disclosures and the long-run share price performance of Malaysian initial public offering (IPO) companies.

This study used secondary data through the content analysis of the annual reports and DataStream of 115 sampled IPOs listed on Bursa Malaysia from 2007 to 2015. The present study incorporated weighted least squares and quantile least squares to evaluate the relationship between the community and environment disclosures and IPO performance.

The results show a positive and significant relationship between the extent and quality of community disclosures and IPO performance; while the extent and quality of environment disclosures have a negative and positive relationship, respectively, with IPO performance. These results suggest that community and environmental activities can be considered an effort to enhance Malaysian IPOs.

These results suggest that Malaysian IPO companies should be involved consistently in corporate social responsibility disclosure, i.e. community and environmental activities, as they have a significant impact on the performance of Malaysian IPOs. The findings can facilitate financial institutions and regulatory agencies in driving companies to be more responsible regarding community and environmental disclosures.

To the best of the authors’ knowledge, this study provides new insights into the relationship between the community and environment disclosures and the performance of Malaysian IPO companies.

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Community and environment disclosures and IPO long-run share price performance10.1108/JFRA-07-2022-0244Journal of Financial Reporting and Accounting2023-03-29© 2023 Emerald Publishing LimitedYasir Abdullah AbbasNurwati A. Ahmad-ZalukiWaqas MehmoodJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-03-2910.1108/JFRA-07-2022-0244https://www.emerald.com/insight/content/doi/10.1108/JFRA-07-2022-0244/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The effect of key audit matters on the audit report lag: evidence from Jordanhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-07-2022-0245/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to explore the potential effect of key audit matters (KAM) on the audit report lag (ARL). In particular, it aims to discover whether the number of KAMs reported by an audit firm in Jordan is related to the length of its ARL. The authors analysed data from the first three years of KAM reporting in Jordan (2017–2019) for 194 public listed Jordanian companies to examine the relation between the number of KAMs and the ARL, taking into account several control variables related to the Jordanian context. This study found that there is no statistically significant relation between the number of KAMs reported by Jordanian audit firms and their ARLs, suggesting that the KAM reporting in Jordan is somewhat superficial, with the selection of what is actually reported as a KAM not directly related to the efforts needed to deal with its concerns. However, this study also found statistically significant positive relations between the ARL and each of audit fees, audit firm size, the issuance of a qualified audit opinion and company leverage and a statistically significant negative relation between the ARL and company profitability. This is one of the very few studies to cover the potential relation between KAM reporting and the ARL. In a developing country context characterised by limited demand for an external audit of high quality, this study finds that auditors may decouple on their reporting of KAMs by not actually making significant efforts to deal with them.The effect of key audit matters on the audit report lag: evidence from Jordan
Modar Abdullatif, Rami Alzebdieh, Saeed Ballour
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to explore the potential effect of key audit matters (KAM) on the audit report lag (ARL). In particular, it aims to discover whether the number of KAMs reported by an audit firm in Jordan is related to the length of its ARL.

The authors analysed data from the first three years of KAM reporting in Jordan (2017–2019) for 194 public listed Jordanian companies to examine the relation between the number of KAMs and the ARL, taking into account several control variables related to the Jordanian context.

This study found that there is no statistically significant relation between the number of KAMs reported by Jordanian audit firms and their ARLs, suggesting that the KAM reporting in Jordan is somewhat superficial, with the selection of what is actually reported as a KAM not directly related to the efforts needed to deal with its concerns. However, this study also found statistically significant positive relations between the ARL and each of audit fees, audit firm size, the issuance of a qualified audit opinion and company leverage and a statistically significant negative relation between the ARL and company profitability.

This is one of the very few studies to cover the potential relation between KAM reporting and the ARL. In a developing country context characterised by limited demand for an external audit of high quality, this study finds that auditors may decouple on their reporting of KAMs by not actually making significant efforts to deal with them.

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The effect of key audit matters on the audit report lag: evidence from Jordan10.1108/JFRA-07-2022-0245Journal of Financial Reporting and Accounting2023-01-20© Emerald Publishing LimitedModar AbdullatifRami AlzebdiehSaeed BallourJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-01-2010.1108/JFRA-07-2022-0245https://www.emerald.com/insight/content/doi/10.1108/JFRA-07-2022-0245/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© Emerald Publishing Limited
Gender diversity and risk-taking: evidence from dual banking systemshttps://www.emerald.com/insight/content/doi/10.1108/JFRA-07-2022-0248/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to examine the relationship between gender diversity and the risk profile of 141 listed banks from 14 emerging countries over the period of 2012–2020. Specifically, this study investigates whether the relationship between gender diversity and banking risk varies between Islamic banks and conventional banks, both before and during the COVID-19 pandemic. The second aim is to investigate whether COVID-19 health crisis moderates the effect of gender diversity on banks’ risk-taking behavior within a dual banking system. This study derives its theoretical foundation from both the token theory and the critical mass theory. Both fixed and random effects are combined to examine the relationship between gender diversity and bank risk-taking in emerging countries. The results show that female presence on the board of directors reduces banks' financial risk. However, the presence of women continues to positively affect the capital adequacy ratio of large banks. The results also show that the presence of at least two female directors significantly reduces banking risk. The findings support the expectations of the token and critical mass theories. In addition, the presence of female board members, per se, does not influence the risk-taking behavior of Islamic banks. Finally, this study demonstrates that the moderating role of the COVID-19 health crisis is only more effective for large banks than for small ones. The analyses demonstrate good reliability and robustness of the findings of this study. The study provides novel insights for policymakers and practitioners on how female directors impact banks’ risk-taking behavior in dual-banking countries. It also contributes to the debate on gender diversity and corporate governance literature, which can help in monitoring bank risk-taking and improving financial stability. This study presents new evidence about the importance of board gender diversity for bank risk-taking in a dual banking system by considering the moderating influence of the COVID-19 pandemic. This study also contributes to the literature on bank risk-taking by applying two measures of gender diversity and a critical mass of women on boards.Gender diversity and risk-taking: evidence from dual banking systems
Hicham Sbai, Slimane Ed-Dafali
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to examine the relationship between gender diversity and the risk profile of 141 listed banks from 14 emerging countries over the period of 2012–2020. Specifically, this study investigates whether the relationship between gender diversity and banking risk varies between Islamic banks and conventional banks, both before and during the COVID-19 pandemic. The second aim is to investigate whether COVID-19 health crisis moderates the effect of gender diversity on banks’ risk-taking behavior within a dual banking system.

This study derives its theoretical foundation from both the token theory and the critical mass theory. Both fixed and random effects are combined to examine the relationship between gender diversity and bank risk-taking in emerging countries.

The results show that female presence on the board of directors reduces banks' financial risk. However, the presence of women continues to positively affect the capital adequacy ratio of large banks. The results also show that the presence of at least two female directors significantly reduces banking risk. The findings support the expectations of the token and critical mass theories. In addition, the presence of female board members, per se, does not influence the risk-taking behavior of Islamic banks. Finally, this study demonstrates that the moderating role of the COVID-19 health crisis is only more effective for large banks than for small ones. The analyses demonstrate good reliability and robustness of the findings of this study.

The study provides novel insights for policymakers and practitioners on how female directors impact banks’ risk-taking behavior in dual-banking countries. It also contributes to the debate on gender diversity and corporate governance literature, which can help in monitoring bank risk-taking and improving financial stability.

This study presents new evidence about the importance of board gender diversity for bank risk-taking in a dual banking system by considering the moderating influence of the COVID-19 pandemic. This study also contributes to the literature on bank risk-taking by applying two measures of gender diversity and a critical mass of women on boards.

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Gender diversity and risk-taking: evidence from dual banking systems10.1108/JFRA-07-2022-0248Journal of Financial Reporting and Accounting2023-04-25© 2023 Emerald Publishing LimitedHicham SbaiSlimane Ed-DafaliJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-04-2510.1108/JFRA-07-2022-0248https://www.emerald.com/insight/content/doi/10.1108/JFRA-07-2022-0248/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
IFRS and the evolution of value relevance: evidence from an African developing countryhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-07-2022-0252/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to assess the evolution of the value relevance of book value, earnings and its components in Mauritius, an African developing country, focusing on value relevance changes after International Financial Reporting Standards (IFRS) adoption and subsequent local reforms. The study relies on a data set of 567 firm-year observations (2001–2018) and the Ohlson valuation model to investigate value relevance after IFRS adoption, the implementation of institutional reforms and enforcement reforms. Firstly, the authors find support for a rise in the combined value relevance of earnings and book value, albeit that book value significantly contributes to changes over time. The findings highlight the combined importance of IFRS adoption with institutional and enforcement reforms to improve value relevance. Secondly, the authors do not find evidence of a shift in value relevance between earnings and book value. Third, the cash flow model reveals a higher level of significance relative to the earnings model. The authors extend the value relevance literature in the context of African developing countries. The present findings underpin the need for a reinforcing of relevant institutional and enforcement frameworks to ensure the benefits of IFRS adoption materialise. The findings also offer a contribution of how developing countries’ experience IFRS post-adoption while adding to the dearth of studies analysing IFRS enforcement practices.IFRS and the evolution of value relevance: evidence from an African developing country
Yuveshna Gowry, Ushad Subadar Agathee, Teerooven Soobaroyen
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to assess the evolution of the value relevance of book value, earnings and its components in Mauritius, an African developing country, focusing on value relevance changes after International Financial Reporting Standards (IFRS) adoption and subsequent local reforms.

The study relies on a data set of 567 firm-year observations (2001–2018) and the Ohlson valuation model to investigate value relevance after IFRS adoption, the implementation of institutional reforms and enforcement reforms.

Firstly, the authors find support for a rise in the combined value relevance of earnings and book value, albeit that book value significantly contributes to changes over time. The findings highlight the combined importance of IFRS adoption with institutional and enforcement reforms to improve value relevance. Secondly, the authors do not find evidence of a shift in value relevance between earnings and book value. Third, the cash flow model reveals a higher level of significance relative to the earnings model.

The authors extend the value relevance literature in the context of African developing countries. The present findings underpin the need for a reinforcing of relevant institutional and enforcement frameworks to ensure the benefits of IFRS adoption materialise. The findings also offer a contribution of how developing countries’ experience IFRS post-adoption while adding to the dearth of studies analysing IFRS enforcement practices.

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IFRS and the evolution of value relevance: evidence from an African developing country10.1108/JFRA-07-2022-0252Journal of Financial Reporting and Accounting2023-04-20© 2023 Emerald Publishing LimitedYuveshna GowryUshad Subadar AgatheeTeerooven SoobaroyenJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-04-2010.1108/JFRA-07-2022-0252https://www.emerald.com/insight/content/doi/10.1108/JFRA-07-2022-0252/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Audit partner tenure and earnings management: evidence from Vietnamhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-07-2022-0258/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to examine the relationship between audit partner tenure and earnings management of companies listed on Vietnamese stock exchanges. This study uses a sample of 1,363 observations from 2016 to 2019. This study manually collects data on audit partner tenure. Using Datastream financial data, this study calculates abnormal accruals using the modified-Jones models (Jones, 1991; Dechow et al., 1995; Kothari et al., 2005), which are used as the proxy for earnings management. This study runs Ordinary Least Squares regressions to test this study’s hypothesis. The results show that audit partner tenure is positively related to abnormal accruals. Cross-sectional analyses indicate that the relationship between audit partner tenure and abnormal accruals is more pronounced for firms that are audited by non-Big Four auditors and for firms that have chief executive officer-chairperson duality, suggesting that weak corporate governance is a channel for the established relationship. The evidence also shows that audit partner tenure is negatively associated with the magnitude of income-decreasing accruals but has no relationship with income-increasing accruals. This study’s findings are robust for several tests, including using the propensity score matching approach. To the best of the authors’ knowledge, this study is the first to provide evidence of the relationship between audit partner tenure and earnings management in Vietnam.Audit partner tenure and earnings management: evidence from Vietnam
Tan Thi Giang Tran, Tri Tri Nguyen, Bich Thi Ngoc Pham, Phuong Thi Thu Tran
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to examine the relationship between audit partner tenure and earnings management of companies listed on Vietnamese stock exchanges.

This study uses a sample of 1,363 observations from 2016 to 2019. This study manually collects data on audit partner tenure. Using Datastream financial data, this study calculates abnormal accruals using the modified-Jones models (Jones, 1991; Dechow et al., 1995; Kothari et al., 2005), which are used as the proxy for earnings management. This study runs Ordinary Least Squares regressions to test this study’s hypothesis.

The results show that audit partner tenure is positively related to abnormal accruals. Cross-sectional analyses indicate that the relationship between audit partner tenure and abnormal accruals is more pronounced for firms that are audited by non-Big Four auditors and for firms that have chief executive officer-chairperson duality, suggesting that weak corporate governance is a channel for the established relationship. The evidence also shows that audit partner tenure is negatively associated with the magnitude of income-decreasing accruals but has no relationship with income-increasing accruals. This study’s findings are robust for several tests, including using the propensity score matching approach.

To the best of the authors’ knowledge, this study is the first to provide evidence of the relationship between audit partner tenure and earnings management in Vietnam.

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Audit partner tenure and earnings management: evidence from Vietnam10.1108/JFRA-07-2022-0258Journal of Financial Reporting and Accounting2023-03-07© 2023 Emerald Publishing LimitedTan Thi Giang TranTri Tri NguyenBich Thi Ngoc PhamPhuong Thi Thu TranJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-03-0710.1108/JFRA-07-2022-0258https://www.emerald.com/insight/content/doi/10.1108/JFRA-07-2022-0258/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
An improved measure of conforming tax avoidancehttps://www.emerald.com/insight/content/doi/10.1108/JFRA-07-2022-0259/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to propose a new conforming tax measure based on the work of Badertscher et al. (2019). This study divides total tax avoidance/management (TM) into nonconforming and conforming portions through a regression. The residual of the regression is treated as the conforming tax measure. In addition, the new conforming tax measure is validated via three approaches. Then, this study examines the moderating effect of nonconforming earnings management (EM) on the relationship between conforming TM and firm performance. The empirical results show that the model has stronger explanatory power than the model proposed by Badertscher et al. (2019). Additionally, the validation results show that the mean value of the conforming tax measure is lower in quasi-private corporations (financially constrained companies) than in matched public corporations (nonfinancially constrained companies), and firms under high market capital pressure are less motivated to engage in conforming tax practices. Furthermore, nonconforming EM positively moderates the conforming tax–ROA association, implying that nonconforming EM can reduce financial reporting costs resulting from conforming tax practices. This study contributes to conforming tax research in the following ways. First, this study proposes a new conforming tax measure by substituting the cash book tax difference (BTD) for the BTD in the model of Badertscher et al. (2019) (“BKRW”). Second, this study demonstrates theoretically why the cash BTD should outperform the BTD in computing the BKRW conforming tax measure and confirm this empirically. Third, this study presents a three-way conceptual schema that divides corporations into two groups along each of three tax-relevant dimensions. The group of firms that use both conforming and nonconforming tax strategies have different characteristics compared to the other group. This study also validates the conforming tax measure across the two-group dichotomies.An improved measure of conforming tax avoidance
Yang Lou, Yicheng Wang, Brian Wright
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to propose a new conforming tax measure based on the work of Badertscher et al. (2019).

This study divides total tax avoidance/management (TM) into nonconforming and conforming portions through a regression. The residual of the regression is treated as the conforming tax measure. In addition, the new conforming tax measure is validated via three approaches. Then, this study examines the moderating effect of nonconforming earnings management (EM) on the relationship between conforming TM and firm performance.

The empirical results show that the model has stronger explanatory power than the model proposed by Badertscher et al. (2019). Additionally, the validation results show that the mean value of the conforming tax measure is lower in quasi-private corporations (financially constrained companies) than in matched public corporations (nonfinancially constrained companies), and firms under high market capital pressure are less motivated to engage in conforming tax practices. Furthermore, nonconforming EM positively moderates the conforming tax–ROA association, implying that nonconforming EM can reduce financial reporting costs resulting from conforming tax practices.

This study contributes to conforming tax research in the following ways. First, this study proposes a new conforming tax measure by substituting the cash book tax difference (BTD) for the BTD in the model of Badertscher et al. (2019) (“BKRW”). Second, this study demonstrates theoretically why the cash BTD should outperform the BTD in computing the BKRW conforming tax measure and confirm this empirically. Third, this study presents a three-way conceptual schema that divides corporations into two groups along each of three tax-relevant dimensions. The group of firms that use both conforming and nonconforming tax strategies have different characteristics compared to the other group. This study also validates the conforming tax measure across the two-group dichotomies.

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An improved measure of conforming tax avoidance10.1108/JFRA-07-2022-0259Journal of Financial Reporting and Accounting2023-05-29© 2023 Emerald Publishing LimitedYang LouYicheng WangBrian WrightJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-05-2910.1108/JFRA-07-2022-0259https://www.emerald.com/insight/content/doi/10.1108/JFRA-07-2022-0259/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Corporate governance, competition and earnings management: evidence from Asian emerging economieshttps://www.emerald.com/insight/content/doi/10.1108/JFRA-07-2022-0270/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to explore the nexus between corporate governance, competition and earnings management (EM) in Asian emerging economies. The authors used a sample of 116 banks from 10 Asian emerging economies from 2010 to 2021. To measure corporate governance, the board size, chief executive officer duality and ownership concentration are used. Competition is captured with Herfindahl-Hirschman Index (HHI) and Lerner index (LI). Although earning management is measured through discretionary accruals. The authors use fixed effect regression for hypothesis testing. However, dynamic panel system generalised method of moments estimation is used to confirm the robustness of the results. The authors find that corporate governance and competition are significantly related to earning management practices of banks in emerging Asian economies. The authors report similar outcomes with both estimation methods verifying the reliability of results. The findings of the study have implications for corporate regulatory authorities, management and investors in the Asian emerging economies. Banks in the Asian emerging economies need to pay more attention to factors such as governance and competition to avoid EM.Corporate governance, competition and earnings management: evidence from Asian emerging economies
Ruba Khalid Shira
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to explore the nexus between corporate governance, competition and earnings management (EM) in Asian emerging economies.

The authors used a sample of 116 banks from 10 Asian emerging economies from 2010 to 2021. To measure corporate governance, the board size, chief executive officer duality and ownership concentration are used. Competition is captured with Herfindahl-Hirschman Index (HHI) and Lerner index (LI). Although earning management is measured through discretionary accruals. The authors use fixed effect regression for hypothesis testing. However, dynamic panel system generalised method of moments estimation is used to confirm the robustness of the results.

The authors find that corporate governance and competition are significantly related to earning management practices of banks in emerging Asian economies. The authors report similar outcomes with both estimation methods verifying the reliability of results.

The findings of the study have implications for corporate regulatory authorities, management and investors in the Asian emerging economies. Banks in the Asian emerging economies need to pay more attention to factors such as governance and competition to avoid EM.

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Corporate governance, competition and earnings management: evidence from Asian emerging economies10.1108/JFRA-07-2022-0270Journal of Financial Reporting and Accounting2022-10-05© 2022 Emerald Publishing LimitedRuba Khalid ShiraJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-10-0510.1108/JFRA-07-2022-0270https://www.emerald.com/insight/content/doi/10.1108/JFRA-07-2022-0270/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
Board gender diversity and earnings management: what difference does gender quota legislation make in emerging market?https://www.emerald.com/insight/content/doi/10.1108/JFRA-07-2023-0359/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to examine the impact of board gender diversity (BOGD) following the adoption of gender quota legislation on earnings management (EM) in an emerging market, Egypt, whose cultural and economic conditions and institutional context are unlike most previously studied countries’ context. The authors use ordinary least squares (OLS) regression to estimate the impact of gender quota legislation on EM using data from listed companies in Egypt from 2015 to 2022. Difference-in-difference (DID) approach estimation was used to validate the robustness of the main results. This paper documents that gender diversity on boards has a significantly negative impact on EM. In addition, this paper provides robust evidence using the DID approach to show that BOGD is significantly negatively linked with EM for the period following gender quota legislation. Furthermore, the results support the critical mass and agency theories. The findings of this study have important implications for Egyptian companies, regulatory bodies and investors in emerging markets. Specifically, these results suggest that when choosing board members, enterprises should pay particular attention to BOGD, and female involvement in all listed firms should be monitored by regulators. This paper provides evidence supporting the positive contribution of women in society by enhancing the economic performance of Egyptian firms and promoting the country’s sustainable development strategy in light of Egypt vision 2030. As per the authors' knowledge, this empirical study is unique in investigating the impact of BOGD quota regulation on EM in Egypt. This paper contributes to BOGD as a major factor in improving financial reporting quality in Egyptian companies.Board gender diversity and earnings management: what difference does gender quota legislation make in emerging market?
Mohsen Anwar Abdelghaffar Saleh, Dejun Wu, Shadi Emad Areef Alhaleh, Nana Adwoa Anokye Effah, Azza Tawab Abdelrahman Sayed
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to examine the impact of board gender diversity (BOGD) following the adoption of gender quota legislation on earnings management (EM) in an emerging market, Egypt, whose cultural and economic conditions and institutional context are unlike most previously studied countries’ context.

The authors use ordinary least squares (OLS) regression to estimate the impact of gender quota legislation on EM using data from listed companies in Egypt from 2015 to 2022. Difference-in-difference (DID) approach estimation was used to validate the robustness of the main results.

This paper documents that gender diversity on boards has a significantly negative impact on EM. In addition, this paper provides robust evidence using the DID approach to show that BOGD is significantly negatively linked with EM for the period following gender quota legislation. Furthermore, the results support the critical mass and agency theories.

The findings of this study have important implications for Egyptian companies, regulatory bodies and investors in emerging markets. Specifically, these results suggest that when choosing board members, enterprises should pay particular attention to BOGD, and female involvement in all listed firms should be monitored by regulators.

This paper provides evidence supporting the positive contribution of women in society by enhancing the economic performance of Egyptian firms and promoting the country’s sustainable development strategy in light of Egypt vision 2030.

As per the authors' knowledge, this empirical study is unique in investigating the impact of BOGD quota regulation on EM in Egypt. This paper contributes to BOGD as a major factor in improving financial reporting quality in Egyptian companies.

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Board gender diversity and earnings management: what difference does gender quota legislation make in emerging market?10.1108/JFRA-07-2023-0359Journal of Financial Reporting and Accounting2023-08-25© 2023 Emerald Publishing LimitedMohsen Anwar Abdelghaffar SalehDejun WuShadi Emad Areef AlhalehNana Adwoa Anokye EffahAzza Tawab Abdelrahman SayedJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-08-2510.1108/JFRA-07-2023-0359https://www.emerald.com/insight/content/doi/10.1108/JFRA-07-2023-0359/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Resilience and adaptation: examining the impact of the defense law on accounting and auditing professions during the COVID-19 pandemic in Jordanhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-07-2023-0385/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to examine the impact of Jordan’s defense law on the accounting and auditing professions during the COVID-19 pandemic. Using a qualitative methodology with a philosophy of interpretivism, semi-structured interviews were conducted with seven audit partners and 14 auditors to explore the consequences of the defense law in Jordan. Thematic analysis was used to identify key themes and findings. The study reveals significant impacts of the defense law on the accounting and auditing professions. Additional disclosures in financial statements were required, increasing the workload for accounting professionals. Auditors faced challenges related to non-compliance risks, fraud risks, management override risks in collecting sufficient evidence. Specific industries, such as restaurants, transportation and tourism, were particularly affected, posing higher audit risks. This study contributes to the international debate on the impact of crisis-related laws on the audit profession. It offers insights into the challenges faced by auditors during crises and underscores the necessity of adapting auditing practices to new regulatory requirements. The study’s originality lies in its examination of the specific consequences of the defense law in Jordan, providing valuable implications for professionals worldwide and emphasizing ongoing discussions on crisis-related regulations in auditing practices. It underscores the need for adaptability, learning and innovation in addressing regulatory changes and managing audit risks in crisis situations. The findings provide valuable insights for professionals worldwide and emphasize ongoing discussions on crisis-related regulations in auditing practices.Resilience and adaptation: examining the impact of the defense law on accounting and auditing professions during the COVID-19 pandemic in Jordan
Hala Zaidan, Omar Mowafi, Melina Al-Hasan, Abdulrahman Al Natour
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to examine the impact of Jordan’s defense law on the accounting and auditing professions during the COVID-19 pandemic.

Using a qualitative methodology with a philosophy of interpretivism, semi-structured interviews were conducted with seven audit partners and 14 auditors to explore the consequences of the defense law in Jordan. Thematic analysis was used to identify key themes and findings.

The study reveals significant impacts of the defense law on the accounting and auditing professions. Additional disclosures in financial statements were required, increasing the workload for accounting professionals. Auditors faced challenges related to non-compliance risks, fraud risks, management override risks in collecting sufficient evidence. Specific industries, such as restaurants, transportation and tourism, were particularly affected, posing higher audit risks.

This study contributes to the international debate on the impact of crisis-related laws on the audit profession. It offers insights into the challenges faced by auditors during crises and underscores the necessity of adapting auditing practices to new regulatory requirements. The study’s originality lies in its examination of the specific consequences of the defense law in Jordan, providing valuable implications for professionals worldwide and emphasizing ongoing discussions on crisis-related regulations in auditing practices. It underscores the need for adaptability, learning and innovation in addressing regulatory changes and managing audit risks in crisis situations. The findings provide valuable insights for professionals worldwide and emphasize ongoing discussions on crisis-related regulations in auditing practices.

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Resilience and adaptation: examining the impact of the defense law on accounting and auditing professions during the COVID-19 pandemic in Jordan10.1108/JFRA-07-2023-0385Journal of Financial Reporting and Accounting2023-11-14© 2023 Emerald Publishing LimitedHala ZaidanOmar MowafiMelina Al-HasanAbdulrahman Al NatourJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-11-1410.1108/JFRA-07-2023-0385https://www.emerald.com/insight/content/doi/10.1108/JFRA-07-2023-0385/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Predicting and assessing bankruptcy risk: the role of accounting conservatism and business strategieshttps://www.emerald.com/insight/content/doi/10.1108/JFRA-07-2023-0388/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to investigate the effect of accounting conservatism and business strategies as mitigating tools for bankruptcy risk. It determines the association among these factors and provides insights into the effectiveness of accounting discretion and business strategies in decision-making. The study uses a sample of 83 nonfinancial listed firms in ASE for the period from 2013 to 2019. Bankruptcy risk is measured using the Altman Z-score (1968). Accounting conservatism is measured using the accrual-based approach, and optimal business strategies are identified through cluster analysis. The results indicate that accounting conservatism has a significant negative effect on bankruptcy risk. Increased application of accounting conservatism practices leads to a decrease in the level of bankruptcy risk. However, the type of business strategy adopted by firms does not have a significant impact on bankruptcy risk, suggesting that firms are not effectively implementing their strategies to mitigate this risk. This study focuses on nonfinancial listed firms in the ASE, limiting the generalizability of the findings to other contexts. The study's findings contribute to the understanding of the role of accounting conservatism in reducing bankruptcy risk but highlight the need for further research on the effectiveness of business strategies in mitigating this risk. This study lies in understanding of the role of accounting discretion in financial evaluations and emphasizes the importance of accounting conservatism as a tool for mitigating bankruptcy risk. The study's insights provide valuable guidance to practitioners, regulators and researchers in this field.Predicting and assessing bankruptcy risk: the role of accounting conservatism and business strategies
Anas Ghazalat, Said AlHallaq
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to investigate the effect of accounting conservatism and business strategies as mitigating tools for bankruptcy risk. It determines the association among these factors and provides insights into the effectiveness of accounting discretion and business strategies in decision-making.

The study uses a sample of 83 nonfinancial listed firms in ASE for the period from 2013 to 2019. Bankruptcy risk is measured using the Altman Z-score (1968). Accounting conservatism is measured using the accrual-based approach, and optimal business strategies are identified through cluster analysis.

The results indicate that accounting conservatism has a significant negative effect on bankruptcy risk. Increased application of accounting conservatism practices leads to a decrease in the level of bankruptcy risk. However, the type of business strategy adopted by firms does not have a significant impact on bankruptcy risk, suggesting that firms are not effectively implementing their strategies to mitigate this risk.

This study focuses on nonfinancial listed firms in the ASE, limiting the generalizability of the findings to other contexts. The study's findings contribute to the understanding of the role of accounting conservatism in reducing bankruptcy risk but highlight the need for further research on the effectiveness of business strategies in mitigating this risk.

This study lies in understanding of the role of accounting discretion in financial evaluations and emphasizes the importance of accounting conservatism as a tool for mitigating bankruptcy risk. The study's insights provide valuable guidance to practitioners, regulators and researchers in this field.

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Predicting and assessing bankruptcy risk: the role of accounting conservatism and business strategies10.1108/JFRA-07-2023-0388Journal of Financial Reporting and Accounting2024-02-12© 2024 Emerald Publishing LimitedAnas GhazalatSaid AlHallaqJournal of Financial Reporting and Accountingahead-of-printahead-of-print2024-02-1210.1108/JFRA-07-2023-0388https://www.emerald.com/insight/content/doi/10.1108/JFRA-07-2023-0388/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Emerald Publishing Limited
Do pressure-sensitive institutional investors moderate CSR decisions towards value creation of Indian firms?https://www.emerald.com/insight/content/doi/10.1108/JFRA-07-2023-0389/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestResearch on the significance of corporate social responsibility (CSR) and value creation is nascent as compared to CSR and financial performance. The concept of value is also evolving because of changing business environments, globalization and the expanded idea of CSR. Nowadays, managers expect a more quick, pragmatic approach to satisfy valid stakeholder claims while simultaneously creating competitive advantage through reputation and investor value. The paper aims to examine the impact of CSR on the market and sustainable value creation through CSR expenditure in India and the moderating role of pressure-sensitive institutional investors (PSII). The study used panel data regression methodology on a sample of 1,845 non-financial Indian firms from 2015 to 2021. CSR creates market and sustainable value for non-financial Indian firms in line with stakeholder theory. The authors find a positive moderating role of governance represented by PSII on CSR and market value creation but not on sustainable value. The study is based on secondary data. CSR, despite being a regulatory obligation, provided long-term benefits that increased their sustainable growth rate. The results highlight the importance given by financial markets to CSR activities. Other types of institutional investors can also be examined in future research. CSR can be embedded in the core operations of the firm, which can help in fostering a culture of sustainability and responsible business practices that benefit firms and society as a whole. Tax incentives can be provided to firms investing in CSR. CSR provides long-term benefits to the firm, which enhances the goodwill and integrity of the firm in the market. The results reveal that besides capital market investors, firms are subject to the scrutiny of consumers, communities and the government as expectations rise and information spreads faster, which can have repercussions. CSR helps in meeting such expectations and the perceived value of the firms. Managers and chief executive officers (CEOs) can pay attention to the type of institutional investors like PSII, which can be formed as a part of the firm’s CSR strategy. The positive impact of CSR on sustainable value expresses a long-term management orientation based on the improvement of stakeholder relations and the associated environmental impacts referring to cohesion and consensus, market opportunities and strengthened reputation and image. A sustainable company involves a conscious and continuing effort in the equilibrium between contrasting stakeholders’ expectations in an attempt to optimize value creation. Tax exemption can be provided for CSR activities. The authors contribute to the scant literature on CSR and value creation, especially sustainable value, as most of the prior studies are not empirical on sustainable value in the Indian context. Managers and CEOs can pay attention to the types of institutional investors like PSII, which can be formed as a part of the firm’s strategy.Do pressure-sensitive institutional investors moderate CSR decisions towards value creation of Indian firms?
Nitika Gaba, Madhumathi R.
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

Research on the significance of corporate social responsibility (CSR) and value creation is nascent as compared to CSR and financial performance. The concept of value is also evolving because of changing business environments, globalization and the expanded idea of CSR. Nowadays, managers expect a more quick, pragmatic approach to satisfy valid stakeholder claims while simultaneously creating competitive advantage through reputation and investor value. The paper aims to examine the impact of CSR on the market and sustainable value creation through CSR expenditure in India and the moderating role of pressure-sensitive institutional investors (PSII).

The study used panel data regression methodology on a sample of 1,845 non-financial Indian firms from 2015 to 2021.

CSR creates market and sustainable value for non-financial Indian firms in line with stakeholder theory. The authors find a positive moderating role of governance represented by PSII on CSR and market value creation but not on sustainable value.

The study is based on secondary data. CSR, despite being a regulatory obligation, provided long-term benefits that increased their sustainable growth rate. The results highlight the importance given by financial markets to CSR activities. Other types of institutional investors can also be examined in future research. CSR can be embedded in the core operations of the firm, which can help in fostering a culture of sustainability and responsible business practices that benefit firms and society as a whole. Tax incentives can be provided to firms investing in CSR.

CSR provides long-term benefits to the firm, which enhances the goodwill and integrity of the firm in the market. The results reveal that besides capital market investors, firms are subject to the scrutiny of consumers, communities and the government as expectations rise and information spreads faster, which can have repercussions. CSR helps in meeting such expectations and the perceived value of the firms. Managers and chief executive officers (CEOs) can pay attention to the type of institutional investors like PSII, which can be formed as a part of the firm’s CSR strategy.

The positive impact of CSR on sustainable value expresses a long-term management orientation based on the improvement of stakeholder relations and the associated environmental impacts referring to cohesion and consensus, market opportunities and strengthened reputation and image. A sustainable company involves a conscious and continuing effort in the equilibrium between contrasting stakeholders’ expectations in an attempt to optimize value creation. Tax exemption can be provided for CSR activities.

The authors contribute to the scant literature on CSR and value creation, especially sustainable value, as most of the prior studies are not empirical on sustainable value in the Indian context. Managers and CEOs can pay attention to the types of institutional investors like PSII, which can be formed as a part of the firm’s strategy.

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Do pressure-sensitive institutional investors moderate CSR decisions towards value creation of Indian firms?10.1108/JFRA-07-2023-0389Journal of Financial Reporting and Accounting2023-12-11© 2023 Emerald Publishing LimitedNitika GabaMadhumathi R.Journal of Financial Reporting and Accountingahead-of-printahead-of-print2023-12-1110.1108/JFRA-07-2023-0389https://www.emerald.com/insight/content/doi/10.1108/JFRA-07-2023-0389/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The double-edged sword of forensic accounting services: litigation risks in Jordan’s industrial sectorhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-07-2023-0414/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to examine the association between forensic accounting services (FAS) and the risk of litigation within the context of industrial firms that are publicly traded on the Amman Stock Exchange by using the resource-based theory. This study uses a data set consisting of 250 firm-year observations from 2017 to 2021, obtained from the annual reports of 50 selected firms. Logistic regression techniques are used to examine the specifics of the investigated relationship. The findings strongly suggest that companies that use FAS are more likely to face increased litigation risks. This observation suggests that these firms are subject to a more thorough level of evaluation or scrutiny, which inherently increases their vulnerability to potential risks. The study incorporated several control variables such as firm age, size, profitability and working capital. However, it is noteworthy that the connection between FAS and litigation risk emerged as particularly prominent. Findings highlight the need for practitioners to tread cautiously with FAS. Although they provide in-depth evaluations, they can also unveil vulnerabilities, leading to increased legal action. Companies should balance the depth of FAS scrutiny against potential legal repercussions, ensuring they harness its benefits without inadvertently raising legal risks. While most studies have emphasized the impact of forensic accounting on fraud, this paper covers a gap in the literature regarding the impact of FAS on litigation risks. The paper also facilitates the understanding of the correlation between firm characteristics and the likelihood of litigation.The double-edged sword of forensic accounting services: litigation risks in Jordan’s industrial sector
Huthaifa Al-Hazaima, Omar Arabiat, Ghassan Maayah
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to examine the association between forensic accounting services (FAS) and the risk of litigation within the context of industrial firms that are publicly traded on the Amman Stock Exchange by using the resource-based theory.

This study uses a data set consisting of 250 firm-year observations from 2017 to 2021, obtained from the annual reports of 50 selected firms. Logistic regression techniques are used to examine the specifics of the investigated relationship.

The findings strongly suggest that companies that use FAS are more likely to face increased litigation risks. This observation suggests that these firms are subject to a more thorough level of evaluation or scrutiny, which inherently increases their vulnerability to potential risks. The study incorporated several control variables such as firm age, size, profitability and working capital. However, it is noteworthy that the connection between FAS and litigation risk emerged as particularly prominent.

Findings highlight the need for practitioners to tread cautiously with FAS. Although they provide in-depth evaluations, they can also unveil vulnerabilities, leading to increased legal action. Companies should balance the depth of FAS scrutiny against potential legal repercussions, ensuring they harness its benefits without inadvertently raising legal risks.

While most studies have emphasized the impact of forensic accounting on fraud, this paper covers a gap in the literature regarding the impact of FAS on litigation risks. The paper also facilitates the understanding of the correlation between firm characteristics and the likelihood of litigation.

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The double-edged sword of forensic accounting services: litigation risks in Jordan’s industrial sector10.1108/JFRA-07-2023-0414Journal of Financial Reporting and Accounting2023-10-20© 2023 Emerald Publishing LimitedHuthaifa Al-HazaimaOmar ArabiatGhassan MaayahJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-10-2010.1108/JFRA-07-2023-0414https://www.emerald.com/insight/content/doi/10.1108/JFRA-07-2023-0414/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Board of directors, COVID-19, and corporate social responsibility monetary performance: direct and interaction effects analysishttps://www.emerald.com/insight/content/doi/10.1108/JFRA-07-2023-0430/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to provide archival evidence on the impact of board characteristics on corporate social responsibility (CSR) monetary performance and how they interact with the COVID-19 pandemic in the context of CSR monetary performance. This study analyzes listed companies in Oman’s capital market from 2016 to 2021, using pooled ordinary least squares and unique CSR performance measures such as budgeting and spending. The study finds that companies with more expertise and frequent meetings are more likely to allocate a larger budget for CSR activities. However, this does not apply to larger boards or to independent directors. During the COVID-19 pandemic, the effect of independent directors on CSR budgeting and spending is more pronounced, and boards with more expertise and meetings show a negative interaction with the pandemic. The interaction of board characteristics with COVID-19 in terms of CSR monetary performance varies depending on company size. Board independence and expertise show a significant reaction to COVID-19 infection and death cases when setting CSR budgeting and spending. The findings of this study are stimulating, but stem from an emerging country with unique cultural and institutional characteristics. Methodological issues were also encountered during the analysis, so readers should exercise caution when applying the results to other settings. This study highlights board involvement in deciding a company’s CSR investment, as it was believed that chief executive officers are considered responsible for CSR activities. Additionally, this research underscores the significance of incorporating the financial aspects of CSR into reporting. This study examines the seldom explored relationship between corporate boards and CSR monetary aspects during regular and irregular times, offering theoretical and practical insights that benefit multiple stakeholders.Board of directors, COVID-19, and corporate social responsibility monetary performance: direct and interaction effects analysis
Saeed Rabea Baatwah, Mohammed Bajaher, Mohammed Asiri
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to provide archival evidence on the impact of board characteristics on corporate social responsibility (CSR) monetary performance and how they interact with the COVID-19 pandemic in the context of CSR monetary performance.

This study analyzes listed companies in Oman’s capital market from 2016 to 2021, using pooled ordinary least squares and unique CSR performance measures such as budgeting and spending.

The study finds that companies with more expertise and frequent meetings are more likely to allocate a larger budget for CSR activities. However, this does not apply to larger boards or to independent directors. During the COVID-19 pandemic, the effect of independent directors on CSR budgeting and spending is more pronounced, and boards with more expertise and meetings show a negative interaction with the pandemic. The interaction of board characteristics with COVID-19 in terms of CSR monetary performance varies depending on company size. Board independence and expertise show a significant reaction to COVID-19 infection and death cases when setting CSR budgeting and spending.

The findings of this study are stimulating, but stem from an emerging country with unique cultural and institutional characteristics. Methodological issues were also encountered during the analysis, so readers should exercise caution when applying the results to other settings.

This study highlights board involvement in deciding a company’s CSR investment, as it was believed that chief executive officers are considered responsible for CSR activities. Additionally, this research underscores the significance of incorporating the financial aspects of CSR into reporting.

This study examines the seldom explored relationship between corporate boards and CSR monetary aspects during regular and irregular times, offering theoretical and practical insights that benefit multiple stakeholders.

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Board of directors, COVID-19, and corporate social responsibility monetary performance: direct and interaction effects analysis10.1108/JFRA-07-2023-0430Journal of Financial Reporting and Accounting2023-12-18© 2023 Emerald Publishing LimitedSaeed Rabea BaatwahMohammed BajaherMohammed AsiriJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-12-1810.1108/JFRA-07-2023-0430https://www.emerald.com/insight/content/doi/10.1108/JFRA-07-2023-0430/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The development of Islamic accounting education in the UAE and its challenges: an institutional perspectivehttps://www.emerald.com/insight/content/doi/10.1108/JFRA-08-2021-0215/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to examine the development of Islamic accounting education and discuss the main challenges facing this specific type of accounting education in the United Arab Emirates (UAE). The paper uses institutional theory to analyze the development of Islamic accounting education in the UAE. The collection of information in this study is based on secondary data available from published sources and websites. This study identifies three types of institutional pressures. First, coercive pressures that were directed by the government, the UAE's Central Bank and other professional bodies [e.g. Accounting and Auditing Organization of Islamic Financial Institutions (AAOIFI)] involved in the Islamic banking industry have contributed to the development of Islamic accounting education in the UAE. Second, mimetic pressures exerted by other countries that have already established Islamic accounting training and programs (e.g. Indonesia, Iran, Kingdom of Saudi Arabia and Pakistan) have incentivized the UAE business schools to implement Islamic accounting training and programs to meet Emirati Islamic banking industry expectations. Third, normative pressures are exerted by Big 4 auditors who have an active position as faculty members, influencing status in AAOIFI and a dominant position in the Islamic banking industry’s audit market. The paper also discusses the main challenges facing Islamic accounting education in this country. This paper contributes to accounting literature in general and accounting education literature in particular in the following two ways. First, this study applies an institutional analysis to Islamic accounting education in the UAE to gain more understanding about the current status of the development of Islamic accounting education in the UAE. Second, by identifying the factors that may constrain the development of Islamic accounting education in the UAE, this study provides recommendations to financial and higher education authorities to undertake proactive actions to position the UAE as a leading center in Islamic accounting education and training.The development of Islamic accounting education in the UAE and its challenges: an institutional perspective
Rihab Grassa, Hichem Khlif, Imen Khelil
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to examine the development of Islamic accounting education and discuss the main challenges facing this specific type of accounting education in the United Arab Emirates (UAE).

The paper uses institutional theory to analyze the development of Islamic accounting education in the UAE. The collection of information in this study is based on secondary data available from published sources and websites.

This study identifies three types of institutional pressures. First, coercive pressures that were directed by the government, the UAE's Central Bank and other professional bodies [e.g. Accounting and Auditing Organization of Islamic Financial Institutions (AAOIFI)] involved in the Islamic banking industry have contributed to the development of Islamic accounting education in the UAE. Second, mimetic pressures exerted by other countries that have already established Islamic accounting training and programs (e.g. Indonesia, Iran, Kingdom of Saudi Arabia and Pakistan) have incentivized the UAE business schools to implement Islamic accounting training and programs to meet Emirati Islamic banking industry expectations. Third, normative pressures are exerted by Big 4 auditors who have an active position as faculty members, influencing status in AAOIFI and a dominant position in the Islamic banking industry’s audit market. The paper also discusses the main challenges facing Islamic accounting education in this country.

This paper contributes to accounting literature in general and accounting education literature in particular in the following two ways. First, this study applies an institutional analysis to Islamic accounting education in the UAE to gain more understanding about the current status of the development of Islamic accounting education in the UAE. Second, by identifying the factors that may constrain the development of Islamic accounting education in the UAE, this study provides recommendations to financial and higher education authorities to undertake proactive actions to position the UAE as a leading center in Islamic accounting education and training.

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The development of Islamic accounting education in the UAE and its challenges: an institutional perspective10.1108/JFRA-08-2021-0215Journal of Financial Reporting and Accounting2022-03-17© 2022 Emerald Publishing LimitedRihab GrassaHichem KhlifImen KhelilJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-03-1710.1108/JFRA-08-2021-0215https://www.emerald.com/insight/content/doi/10.1108/JFRA-08-2021-0215/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
Marking-to-market IAS 37 provisions using options: an empirical demonstrationhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-08-2022-0280/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestInternational Accounting Standards Rule 37 (IAS 37) for Contingent Liabilities and Assets were designed to make analysis of exposures facing a corporate entity easier to understand, but the rules may be insufficiently prescriptive making provisions inadequate predictors of potential outlays. The purpose of this research is to redress this problem. We apply financial option theory to objectively mark-to-market the appropriateness of provisions replacing subjective inputs with market derived calculations. This study applies financial option theory to determine whether provisions are appropriate according to market data. This research supports inferences regarding the probability of a provision being used while evidencing scope for earnings management. In addition to showing how IAS 37 provisions may be calibrated against market data, from the large sample of UK-listed companies, the proposition that over-provisioning is common and related to share price volatility, is supported, supporting the view that IAS 37 rules may facilitate earnings management. The financial and reporting community have struggled in interpreting the appropriateness of IAS 37 provisions. Are they too large or too small? What is the probability they will be used? Using option theory and market data, various subjective judgements may now be validated. This research should have tangible value to analysts, auditors, investors and other stakeholders concerned in the accurate valuation of potential liabilities. Replacing subjective judgement and insufficiently prescriptive guidance, this study shows that financial option theory and share price data may be used to objectively calibrate the size of IAS 37 provisions.Marking-to-market IAS 37 provisions using options: an empirical demonstration
Lawrence Haar, Ali Elharidy, Andros Gregoriou
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

International Accounting Standards Rule 37 (IAS 37) for Contingent Liabilities and Assets were designed to make analysis of exposures facing a corporate entity easier to understand, but the rules may be insufficiently prescriptive making provisions inadequate predictors of potential outlays. The purpose of this research is to redress this problem. We apply financial option theory to objectively mark-to-market the appropriateness of provisions replacing subjective inputs with market derived calculations.

This study applies financial option theory to determine whether provisions are appropriate according to market data. This research supports inferences regarding the probability of a provision being used while evidencing scope for earnings management.

In addition to showing how IAS 37 provisions may be calibrated against market data, from the large sample of UK-listed companies, the proposition that over-provisioning is common and related to share price volatility, is supported, supporting the view that IAS 37 rules may facilitate earnings management.

The financial and reporting community have struggled in interpreting the appropriateness of IAS 37 provisions. Are they too large or too small? What is the probability they will be used? Using option theory and market data, various subjective judgements may now be validated. This research should have tangible value to analysts, auditors, investors and other stakeholders concerned in the accurate valuation of potential liabilities.

Replacing subjective judgement and insufficiently prescriptive guidance, this study shows that financial option theory and share price data may be used to objectively calibrate the size of IAS 37 provisions.

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Marking-to-market IAS 37 provisions using options: an empirical demonstration10.1108/JFRA-08-2022-0280Journal of Financial Reporting and Accounting2022-12-15© 2022 Emerald Publishing LimitedLawrence HaarAli ElharidyAndros GregoriouJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-12-1510.1108/JFRA-08-2022-0280https://www.emerald.com/insight/content/doi/10.1108/JFRA-08-2022-0280/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
IFRS 9 implementation indicating asset opacities: even though predicting earnings’ forecasts and value relevance in Asia-Pacific countrieshttps://www.emerald.com/insight/content/doi/10.1108/JFRA-08-2022-0282/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to investigate the opacity of bank assets because of the International Financial Reporting Standard (IFRS) 9 implementation. It highlights that the Asian-Pacific countries’ banking industries are experiencing economic volatility. In other words, it examines information asymmetries because of the standards requiring a mechanistic treatment. Thus, this focuses on the tragedy of the commons (ToTC) caused by the implementation of the standard. This research selects a sample of banking firms in the Asia-Pacific region from 2010 to 2021. Furthermore, it examines the impacts of IFRS 9’s implementation on earnings forecasts and share-return conveyances. This research first uses the OLS regression for examining the bank assets’ opacities, which may affect future earnings and information conveyancing. Second, it arranges these opacities, earnings and stock returns with the 2-SLS regression to find the staging associations because of hierarchical relevances. This study finds that bank assets’ opacity is caused by a standard’s implementation, which is a ToTC, and this study signifies its first occurrence. Simultaneously, it recognises an information asymmetry because of the implemented procedural calculation mandated by the standard. Furthermore, these opacities affect future earnings and information conveyancing that inherited information asymmetries, which have affected them as the second ToTC. Finally, current and future earnings as a consequent impact of asset opacity are recursively associated with stock return conveyancing as the third ToTC. This study demonstrates hierarchical information about bank asset opacities, starting by recognising and measuring them in financial statements. Then, these recognised and measured asset opacities are associated with current and future earnings, ending on the ordinarily and staged influencing of stock return conveyancing. Moreover, it reveals hierarchical information in the direct-ordinarily and staged associations among bank asset opacities, earnings and return conveyances. Thus, these associations are valid and occur because of the mandates of the standard’s measurement.IFRS 9 implementation indicating asset opacities: even though predicting earnings’ forecasts and value relevance in Asia-Pacific countries
Evy Rahman Utami, Sumiyana Sumiyana, Zuni Barokah, Jogiyanto Hartono Mustakini
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to investigate the opacity of bank assets because of the International Financial Reporting Standard (IFRS) 9 implementation. It highlights that the Asian-Pacific countries’ banking industries are experiencing economic volatility. In other words, it examines information asymmetries because of the standards requiring a mechanistic treatment. Thus, this focuses on the tragedy of the commons (ToTC) caused by the implementation of the standard.

This research selects a sample of banking firms in the Asia-Pacific region from 2010 to 2021. Furthermore, it examines the impacts of IFRS 9’s implementation on earnings forecasts and share-return conveyances. This research first uses the OLS regression for examining the bank assets’ opacities, which may affect future earnings and information conveyancing. Second, it arranges these opacities, earnings and stock returns with the 2-SLS regression to find the staging associations because of hierarchical relevances.

This study finds that bank assets’ opacity is caused by a standard’s implementation, which is a ToTC, and this study signifies its first occurrence. Simultaneously, it recognises an information asymmetry because of the implemented procedural calculation mandated by the standard. Furthermore, these opacities affect future earnings and information conveyancing that inherited information asymmetries, which have affected them as the second ToTC. Finally, current and future earnings as a consequent impact of asset opacity are recursively associated with stock return conveyancing as the third ToTC.

This study demonstrates hierarchical information about bank asset opacities, starting by recognising and measuring them in financial statements. Then, these recognised and measured asset opacities are associated with current and future earnings, ending on the ordinarily and staged influencing of stock return conveyancing. Moreover, it reveals hierarchical information in the direct-ordinarily and staged associations among bank asset opacities, earnings and return conveyances. Thus, these associations are valid and occur because of the mandates of the standard’s measurement.

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IFRS 9 implementation indicating asset opacities: even though predicting earnings’ forecasts and value relevance in Asia-Pacific countries10.1108/JFRA-08-2022-0282Journal of Financial Reporting and Accounting2023-02-13© 2023 Emerald Publishing LimitedEvy Rahman UtamiSumiyana SumiyanaZuni BarokahJogiyanto Hartono MustakiniJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-02-1310.1108/JFRA-08-2022-0282https://www.emerald.com/insight/content/doi/10.1108/JFRA-08-2022-0282/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Do firms that perform well report differently compared to those that perform badly? Impression management in integrated reportinghttps://www.emerald.com/insight/content/doi/10.1108/JFRA-08-2022-0283/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to investigate whether managers use impression management through the presentation of non-financial information in an integrated reporting setting. The authors performed an experiment with experienced professional controllers and part-time students enrolled in the executive master’s degree in finance and control at universities in the Netherlands. In this experiment, we manipulated the financial performance to test if managers present non-financial information differently based on the firm’s financial performance. This study found that impression management is not applied by including or excluding non-financial key performance indicators (KPIs) in the integrated report, but by using more prominent presentation forms for positive non-financial performance and non-prominent ones for negative non-financial performance. However, the use of impression management through the presentation form decreased when the firms’ financial performance was positive. In that instance, this study noted that managers statistically significantly more often decided to present poor non-financial performance in a prominent presentation format in comparison to managers who were not aware of the financial performance. A limitation of this paper is that the authors focused on only two impression management strategies: opportunistic/under-reporting and the presentation form. This analysis shows that the use of impression management mainly seems to occur through the presentation format. Future research could investigate other impression management strategies in an integrated reporting setting. The results of this study are of importance for users of integrated reports, because it will provide more insight into whether firms are truly transparent in their integrated reports. Furthermore, the theoretical implication of this study is relevant to regulatory authorities, because it sheds light on the different forms of impression management used in integrated reporting and the influence of positively or negatively performing KPIs on the decisions of preparers of integrated reports. Therefore, in this study, the authors add to prior literature by investigating the concept of impression management in an integrated reporting setting. More specifically, the authors perform an experiment and focus on different forms of impression management (the presentation format and under-reporting) through non-financial KPIs in an integrated reporting setting and link it to firm financial performance.Do firms that perform well report differently compared to those that perform badly? Impression management in integrated reporting
P.K. Nandram, A.J. Brouwer, H.P.A.J. Langendijk
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to investigate whether managers use impression management through the presentation of non-financial information in an integrated reporting setting.

The authors performed an experiment with experienced professional controllers and part-time students enrolled in the executive master’s degree in finance and control at universities in the Netherlands. In this experiment, we manipulated the financial performance to test if managers present non-financial information differently based on the firm’s financial performance.

This study found that impression management is not applied by including or excluding non-financial key performance indicators (KPIs) in the integrated report, but by using more prominent presentation forms for positive non-financial performance and non-prominent ones for negative non-financial performance. However, the use of impression management through the presentation form decreased when the firms’ financial performance was positive. In that instance, this study noted that managers statistically significantly more often decided to present poor non-financial performance in a prominent presentation format in comparison to managers who were not aware of the financial performance.

A limitation of this paper is that the authors focused on only two impression management strategies: opportunistic/under-reporting and the presentation form. This analysis shows that the use of impression management mainly seems to occur through the presentation format. Future research could investigate other impression management strategies in an integrated reporting setting.

The results of this study are of importance for users of integrated reports, because it will provide more insight into whether firms are truly transparent in their integrated reports. Furthermore, the theoretical implication of this study is relevant to regulatory authorities, because it sheds light on the different forms of impression management used in integrated reporting and the influence of positively or negatively performing KPIs on the decisions of preparers of integrated reports.

Therefore, in this study, the authors add to prior literature by investigating the concept of impression management in an integrated reporting setting. More specifically, the authors perform an experiment and focus on different forms of impression management (the presentation format and under-reporting) through non-financial KPIs in an integrated reporting setting and link it to firm financial performance.

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Do firms that perform well report differently compared to those that perform badly? Impression management in integrated reporting10.1108/JFRA-08-2022-0283Journal of Financial Reporting and Accounting2023-05-22© 2023 P.K. Nandram, A.J. Brouwer and H.P.A.J. Langendijk.P.K. NandramA.J. BrouwerH.P.A.J. LangendijkJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-05-2210.1108/JFRA-08-2022-0283https://www.emerald.com/insight/content/doi/10.1108/JFRA-08-2022-0283/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 P.K. Nandram, A.J. Brouwer and H.P.A.J. Langendijk.http://creativecommons.org/licences/by/4.0/legalcode
Corporate social responsibility and disclosure transparencyhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-08-2022-0309/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to investigate the relation between corporate social responsibility (CSR) and disclosure transparency by examining over 12,000 disclosures of financial statements extending over 20 years. The purpose is to understand how CSR ratings relate to the level of disaggregation in financial statement line items. The study considers additional factors, such as firm size and governance, that can accentuate or moderate this relation. This study applies regression analysis, including interactions, to test the magnitude of the relation between CSR ratings and disclosure transparency. CSR is measured as a composite score that ranks firms on their reputation over numerous indicators compiled by Morgan Stanley Capital International. Disclosure transparency is measured as the level of disaggregation in financial statement line items. The study reveals evidence consistent with the notion that firms which are more CSR conscious are also more transparent with financial statements. Evidence shows that the level of transparency is more sensitive to changes in CSR for firms less CSR conscious. Firm size is found to moderate this relation, whereas enhanced governance accentuates it. There is limited research on the relation between CSR ratings and disclosure transparency. To the best of the authors’ knowledge, this is the first empirical evidence on the relation between CSR ratings and the disaggregation of financial statement line items. Results from this study help us understand the drivers of disclosure transparency, which can aid regulators, investors and other stakeholders in knowing how such drivers impact managerial decisions on the disaggregation of financial statements. Accountants play a central role in producing transparent and disaggregated accounting disclosures, and their role is pivotal in effectively integrating CSR into accounting and reporting models.Corporate social responsibility and disclosure transparency
John J. Wild, Jonathan M. Wild
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to investigate the relation between corporate social responsibility (CSR) and disclosure transparency by examining over 12,000 disclosures of financial statements extending over 20 years. The purpose is to understand how CSR ratings relate to the level of disaggregation in financial statement line items. The study considers additional factors, such as firm size and governance, that can accentuate or moderate this relation.

This study applies regression analysis, including interactions, to test the magnitude of the relation between CSR ratings and disclosure transparency. CSR is measured as a composite score that ranks firms on their reputation over numerous indicators compiled by Morgan Stanley Capital International. Disclosure transparency is measured as the level of disaggregation in financial statement line items.

The study reveals evidence consistent with the notion that firms which are more CSR conscious are also more transparent with financial statements. Evidence shows that the level of transparency is more sensitive to changes in CSR for firms less CSR conscious. Firm size is found to moderate this relation, whereas enhanced governance accentuates it.

There is limited research on the relation between CSR ratings and disclosure transparency. To the best of the authors’ knowledge, this is the first empirical evidence on the relation between CSR ratings and the disaggregation of financial statement line items. Results from this study help us understand the drivers of disclosure transparency, which can aid regulators, investors and other stakeholders in knowing how such drivers impact managerial decisions on the disaggregation of financial statements. Accountants play a central role in producing transparent and disaggregated accounting disclosures, and their role is pivotal in effectively integrating CSR into accounting and reporting models.

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Corporate social responsibility and disclosure transparency10.1108/JFRA-08-2022-0309Journal of Financial Reporting and Accounting2023-08-29© 2023 Emerald Publishing LimitedJohn J. WildJonathan M. WildJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-08-2910.1108/JFRA-08-2022-0309https://www.emerald.com/insight/content/doi/10.1108/JFRA-08-2022-0309/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Independent directors’ attributes and related party transactions in Malaysia: evidence from an individual perspectivehttps://www.emerald.com/insight/content/doi/10.1108/JFRA-08-2022-0316/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to examine the ability of independent directors to discipline related-party transactions (RPTs) among listed companies in Malaysia. Firms typically appoint independent directors individually, not as a group. However, board members are commonly viewed collectively as a group, and evidence of the abilities of individual directors is scarce. The attributes of individual independent directors include accounting literacy, length of service, audit committee membership and active participation in board and audit committee meetings. The unit of analysis is the individual independent director. The final sample consists of 1,552 observations in 2017, and RPTs are categorized as either efficient or conflicting. The study finds that the tenure of individual independent directors and active participation in board meetings affect the firm’s engagement in RPTs. However, the financial literacy, audit committee membership and attendance of independent directors at audit committee meetings do not affect the firm’s engagement in RPTs, either efficient or conflicting. Overall, this result offers limited support for the upper-echelon theory concerning the attributes of individual independent directors and RPTs. This study uses cross-sectional observations for 2017, which predates the COVID-19 pandemic. Thus, this study ignores the impact of restrictions in community mobility during the pandemic on the independent director’s ability to monitor the corporation. This circumstance may have implications for practice and merit further research. The findings provide information for board nominating committees, regulators and policymakers that the capability of individual independent directors to fulfill their responsibilities is limited. The firm’s nominating committee must be very selective in nominating and appointing independent directors with appropriate competencies. Investors should choose companies that have reappointed the same independent directors for an extended period, as they may benefit from the experience in protecting investors’ interests. This paper contributes novel evidence to upper-echelon theory literature on the association between independent directors and RPT types from the perspective of individual independent directors.Independent directors’ attributes and related party transactions in Malaysia: evidence from an individual perspective
Nurshahirah Abd Majid, Mohd Mohid Rahmat, Kamran Ahmed
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to examine the ability of independent directors to discipline related-party transactions (RPTs) among listed companies in Malaysia. Firms typically appoint independent directors individually, not as a group. However, board members are commonly viewed collectively as a group, and evidence of the abilities of individual directors is scarce.

The attributes of individual independent directors include accounting literacy, length of service, audit committee membership and active participation in board and audit committee meetings. The unit of analysis is the individual independent director. The final sample consists of 1,552 observations in 2017, and RPTs are categorized as either efficient or conflicting.

The study finds that the tenure of individual independent directors and active participation in board meetings affect the firm’s engagement in RPTs. However, the financial literacy, audit committee membership and attendance of independent directors at audit committee meetings do not affect the firm’s engagement in RPTs, either efficient or conflicting. Overall, this result offers limited support for the upper-echelon theory concerning the attributes of individual independent directors and RPTs.

This study uses cross-sectional observations for 2017, which predates the COVID-19 pandemic. Thus, this study ignores the impact of restrictions in community mobility during the pandemic on the independent director’s ability to monitor the corporation. This circumstance may have implications for practice and merit further research.

The findings provide information for board nominating committees, regulators and policymakers that the capability of individual independent directors to fulfill their responsibilities is limited. The firm’s nominating committee must be very selective in nominating and appointing independent directors with appropriate competencies. Investors should choose companies that have reappointed the same independent directors for an extended period, as they may benefit from the experience in protecting investors’ interests.

This paper contributes novel evidence to upper-echelon theory literature on the association between independent directors and RPT types from the perspective of individual independent directors.

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Independent directors’ attributes and related party transactions in Malaysia: evidence from an individual perspective10.1108/JFRA-08-2022-0316Journal of Financial Reporting and Accounting2023-07-03© 2023 Emerald Publishing LimitedNurshahirah Abd MajidMohd Mohid RahmatKamran AhmedJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-07-0310.1108/JFRA-08-2022-0316https://www.emerald.com/insight/content/doi/10.1108/JFRA-08-2022-0316/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
IFRS adoption: a systematic review of the underlying theorieshttps://www.emerald.com/insight/content/doi/10.1108/JFRA-08-2022-0317/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to examine the theoretical underpinnings of international financial reporting standards (IFRS)-related studies and offers directions for theoretical and empirical research. Specifically, this study examines the main theories in IFRS adoption research (i.e. adoption, compliance and effects). The sample contains 67 empirical papers that have used theories and was collected from Web of Science database. This study uses a systematic review technique. Generally, the review shows the prevalent and pervasive use of institutional theories of isomorphism across all the three areas of IFRS adoption. Particularly, regarding IFRS adoption stream, this study finds the institutional theory as a dominant theory used to explain IFRS diffusion around the globe. For IFRS compliance, this study finds that the agency and the capital need theories are widely used. For IFRS adoption effects stream, this study finds a few studies using the contingency and neo-institutional theories. Overall, the review provides theoretical lens for IFRS adoption, IFRS compliance and IFRS adoption effects. Given the lack of a well-defined set of theories in the domain of accounting, the findings provide further guidance on theory building within the field. Further, accounting regulators, academics and practitioners may benefit from the findings when explaining various changes in the world of accounting.IFRS adoption: a systematic review of the underlying theories
Joseph Akadeagre Agana, Stephen Zamore, Daniel Domeher
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to examine the theoretical underpinnings of international financial reporting standards (IFRS)-related studies and offers directions for theoretical and empirical research. Specifically, this study examines the main theories in IFRS adoption research (i.e. adoption, compliance and effects).

The sample contains 67 empirical papers that have used theories and was collected from Web of Science database. This study uses a systematic review technique.

Generally, the review shows the prevalent and pervasive use of institutional theories of isomorphism across all the three areas of IFRS adoption. Particularly, regarding IFRS adoption stream, this study finds the institutional theory as a dominant theory used to explain IFRS diffusion around the globe. For IFRS compliance, this study finds that the agency and the capital need theories are widely used. For IFRS adoption effects stream, this study finds a few studies using the contingency and neo-institutional theories. Overall, the review provides theoretical lens for IFRS adoption, IFRS compliance and IFRS adoption effects.

Given the lack of a well-defined set of theories in the domain of accounting, the findings provide further guidance on theory building within the field. Further, accounting regulators, academics and practitioners may benefit from the findings when explaining various changes in the world of accounting.

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IFRS adoption: a systematic review of the underlying theories10.1108/JFRA-08-2022-0317Journal of Financial Reporting and Accounting2023-04-11© 2023 Emerald Publishing LimitedJoseph Akadeagre AganaStephen ZamoreDaniel DomeherJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-04-1110.1108/JFRA-08-2022-0317https://www.emerald.com/insight/content/doi/10.1108/JFRA-08-2022-0317/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Bridging the trust gap in financial reporting: the impact of blockchain technology and smart contractshttps://www.emerald.com/insight/content/doi/10.1108/JFRA-08-2023-0494/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to examine the role of blockchain technology (BCT) in trust in financial reporting (TFR) and the use of smart contracts (USC). It aims to ascertain the mediating role of USC in the relationship between BCT and TFR, thereby contributing to the limited empirical literature in this domain. Based on a sample of the accountants’ familiarity with BCT, a structural equation model was constructed and analyzed using AMOS 24. The model proposes and tests relationships between BCT, USC and TFR. The study highlights BCT’s significant positive influence on TFR, with USC mediating this effect. It provides empirical evidence that supports the transformative potential of BCT and USC in enhancing TFR. These findings have significant implications for practitioners, regulatory bodies and policymakers. By highlighting the effectiveness of BCT and USC in fostering TFR, the study makes one aware of strategies to mitigate financial malpractices. It promotes the adoption of BCT in accounting practices. This study addresses a gap in the literature by investigating the complex interplay of BCT, USC and TFR. It offers a unique perspective by exploring the mediating role of USC, thereby enhancing our understanding of the mechanisms through which BCT can foster TFR.Bridging the trust gap in financial reporting: the impact of blockchain technology and smart contracts
Awni Rawashdeh
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to examine the role of blockchain technology (BCT) in trust in financial reporting (TFR) and the use of smart contracts (USC). It aims to ascertain the mediating role of USC in the relationship between BCT and TFR, thereby contributing to the limited empirical literature in this domain.

Based on a sample of the accountants’ familiarity with BCT, a structural equation model was constructed and analyzed using AMOS 24. The model proposes and tests relationships between BCT, USC and TFR.

The study highlights BCT’s significant positive influence on TFR, with USC mediating this effect. It provides empirical evidence that supports the transformative potential of BCT and USC in enhancing TFR.

These findings have significant implications for practitioners, regulatory bodies and policymakers. By highlighting the effectiveness of BCT and USC in fostering TFR, the study makes one aware of strategies to mitigate financial malpractices. It promotes the adoption of BCT in accounting practices.

This study addresses a gap in the literature by investigating the complex interplay of BCT, USC and TFR. It offers a unique perspective by exploring the mediating role of USC, thereby enhancing our understanding of the mechanisms through which BCT can foster TFR.

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Bridging the trust gap in financial reporting: the impact of blockchain technology and smart contracts10.1108/JFRA-08-2023-0494Journal of Financial Reporting and Accounting2024-02-06© 2024 Emerald Publishing LimitedAwni RawashdehJournal of Financial Reporting and Accountingahead-of-printahead-of-print2024-02-0610.1108/JFRA-08-2023-0494https://www.emerald.com/insight/content/doi/10.1108/JFRA-08-2023-0494/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Emerald Publishing Limited
The effect of financial reporting regimes on audit report lags and audit fees: evidence from firms cross-listed in the USAhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-09-2021-0261/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to investigate whether the two dominant financial reporting regimes, US Generally Accepted Accounting Principles (US GAAP) and International Financial Reporting Standards (IFRS), are associated with audit pricing and audit report lags. In 2007, the US SEC eliminated the requirement for foreign registrants to reconcile their financial statements to US GAAP from IFRS. In this post-reconciliation setting in the USA, the authors use panel ordinary least square regressions to examine a sample of foreign firms cross-listed in the USA reporting under IFRS and US domestic firms reporting under US GAAP during the fiscal year 2007–2019. The authors find that the firms reporting under IFRS have longer audit report lags than firms reporting under US GAAP. In addition, the authors find that firms reporting under IFRS pay higher audit fees than their US GAAP counterparts. The results are robust after controlling for the firm- and country-specific characteristics as well as using propensity-score matching. To the best of the authors’ knowledge, this study is the first to provide empirical evidence that the differences between the two reporting regimes are associated with auditor behavior, possibly through additional audit efforts and audit complexity associated with auditing the principle-based IFRS relative to the rule-based US GAAP.The effect of financial reporting regimes on audit report lags and audit fees: evidence from firms cross-listed in the USA
Yu Zhou, Jiaxin Liu, Dongliang Lei
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to investigate whether the two dominant financial reporting regimes, US Generally Accepted Accounting Principles (US GAAP) and International Financial Reporting Standards (IFRS), are associated with audit pricing and audit report lags.

In 2007, the US SEC eliminated the requirement for foreign registrants to reconcile their financial statements to US GAAP from IFRS. In this post-reconciliation setting in the USA, the authors use panel ordinary least square regressions to examine a sample of foreign firms cross-listed in the USA reporting under IFRS and US domestic firms reporting under US GAAP during the fiscal year 2007–2019.

The authors find that the firms reporting under IFRS have longer audit report lags than firms reporting under US GAAP. In addition, the authors find that firms reporting under IFRS pay higher audit fees than their US GAAP counterparts. The results are robust after controlling for the firm- and country-specific characteristics as well as using propensity-score matching.

To the best of the authors’ knowledge, this study is the first to provide empirical evidence that the differences between the two reporting regimes are associated with auditor behavior, possibly through additional audit efforts and audit complexity associated with auditing the principle-based IFRS relative to the rule-based US GAAP.

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The effect of financial reporting regimes on audit report lags and audit fees: evidence from firms cross-listed in the USA10.1108/JFRA-09-2021-0261Journal of Financial Reporting and Accounting2022-06-06© 2022 Emerald Publishing LimitedYu ZhouJiaxin LiuDongliang LeiJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-06-0610.1108/JFRA-09-2021-0261https://www.emerald.com/insight/content/doi/10.1108/JFRA-09-2021-0261/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
Integrated thinking on integrated reporting practice: evidence from public listed companies in Sri Lankahttps://www.emerald.com/insight/content/doi/10.1108/JFRA-09-2021-0270/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to offer empirical evidence on how integrated thinking affects the integrated reporting (IR) practice and how integrated thinking originates from board and management involvement, cross-functional integration and integral link between capitals and strategies. This study is cross-sectional and uses a mixed-method approach. The empirical data for the quantitative approach were collected from the 129 public companies listed on Colombo Stock Exchange in Sri Lanka. The personale responsible for preparing the annual report are selected as the respondents of this study. This study used partial least square modelling to test the hypotheses. The quantitative approach results are triangulated across a qualitative research approach in semi-structural interviews with ten responsible officers of integrated reporting practices. The central finding of this study is the significant positive relationship between integrated thinking and integrated reporting practice. The qualitative results supported the quantitative findings and show that board and management involvement, cross-functional integration and integral link between capital and strategy enhance the integrated reporting practice. Top management and board management have positive beliefs about the integrated reporting practice; they initiate, encourage, influence, involve and support it. Furthermore, all company departments are involved with the integrated reporting led by the finance department and practice good coordination, communication and collaboration between departments. Moreover, it also evidenced their concern about the linkage between capital and strategy and how they do it in their organisation when practising integrated reporting. The firms which intend to practice or enhance integrated reporting will be benefited from this study. Hence, this research assists in constructing IT through the direct role of the board and senior leadership, breaking down silos to diffuse IR throughout structures and processes, and concentrating on strategies while managing their capitals and relationships over the long term. This study provides the initial quantitative empirical evidence on the impact of integrated thinking on integrated reporting practice. To the best of the authors’ knowledge, this study is the first to operationalise both integrated thinking and integrated reporting based on a questionnaire that developed and tested both constructs as higher-order reflective formative and on the relationship between integrated thinking and integrated reporting. The mixed-method approach to examine the relationship between integrated thinking and integrated reporting provides additional insights into the existing literature.Integrated thinking on integrated reporting practice: evidence from public listed companies in Sri Lanka
N.L.E. Abeywardana, S. M. Ferdous Azam, L.T. Kevin Low
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to offer empirical evidence on how integrated thinking affects the integrated reporting (IR) practice and how integrated thinking originates from board and management involvement, cross-functional integration and integral link between capitals and strategies.

This study is cross-sectional and uses a mixed-method approach. The empirical data for the quantitative approach were collected from the 129 public companies listed on Colombo Stock Exchange in Sri Lanka. The personale responsible for preparing the annual report are selected as the respondents of this study. This study used partial least square modelling to test the hypotheses. The quantitative approach results are triangulated across a qualitative research approach in semi-structural interviews with ten responsible officers of integrated reporting practices.

The central finding of this study is the significant positive relationship between integrated thinking and integrated reporting practice. The qualitative results supported the quantitative findings and show that board and management involvement, cross-functional integration and integral link between capital and strategy enhance the integrated reporting practice. Top management and board management have positive beliefs about the integrated reporting practice; they initiate, encourage, influence, involve and support it. Furthermore, all company departments are involved with the integrated reporting led by the finance department and practice good coordination, communication and collaboration between departments. Moreover, it also evidenced their concern about the linkage between capital and strategy and how they do it in their organisation when practising integrated reporting.

The firms which intend to practice or enhance integrated reporting will be benefited from this study. Hence, this research assists in constructing IT through the direct role of the board and senior leadership, breaking down silos to diffuse IR throughout structures and processes, and concentrating on strategies while managing their capitals and relationships over the long term.

This study provides the initial quantitative empirical evidence on the impact of integrated thinking on integrated reporting practice. To the best of the authors’ knowledge, this study is the first to operationalise both integrated thinking and integrated reporting based on a questionnaire that developed and tested both constructs as higher-order reflective formative and on the relationship between integrated thinking and integrated reporting. The mixed-method approach to examine the relationship between integrated thinking and integrated reporting provides additional insights into the existing literature.

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Integrated thinking on integrated reporting practice: evidence from public listed companies in Sri Lanka10.1108/JFRA-09-2021-0270Journal of Financial Reporting and Accounting2022-07-13© 2022 Emerald Publishing LimitedN.L.E. AbeywardanaS. M. Ferdous AzamL.T. Kevin LowJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-07-1310.1108/JFRA-09-2021-0270https://www.emerald.com/insight/content/doi/10.1108/JFRA-09-2021-0270/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
Does audit firm governance matter to audit quality? Evidence from Turkeyhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-09-2021-0274/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to examine the effect of audit firm governance on audit quality. Audit firm governance is broken down into two categories, namely, board ownership and engagement partner ownership. Audit firms from Borsa Istanbul and their clients who are quoted there as well were used to test the hypotheses. The final sample covers 1,291 observations at the client level between 2013 and 2019. Ordinary least square was conducted to test the hypotheses. Heckman selection model and instrument variable regression with two-stage least square (IVREG with 2SLS) were also used to control the self-selection and endogeneity problems, respectively. To enhance the validity of the main results, alternative audit quality measures were used. The empirical findings show that board ownership and engagement partner ownership have an impact on audit quality. The results indicate that engagement partners with high shares enhance audit quality only in Big4 audit firms. The positive effect of higher board ownership on audit quality is more prominent in non-Big4 firms. The Heckman two-stage procedure and IVREG with 2SLS were conducted, both of which were consistent with the main results. The results regarding alternative audit quality measures are in accordance with the main estimation results. To the best of the author’s knowledge, this is the first study examining the impact of audit firm board ownership on audit quality. In addition, this paper further advances the literature by investigating the effects of ownership at engagement partner levels on audit quality in the context of an emerging market, Turkey.Does audit firm governance matter to audit quality? Evidence from Turkey
Murat Ocak
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to examine the effect of audit firm governance on audit quality. Audit firm governance is broken down into two categories, namely, board ownership and engagement partner ownership.

Audit firms from Borsa Istanbul and their clients who are quoted there as well were used to test the hypotheses. The final sample covers 1,291 observations at the client level between 2013 and 2019. Ordinary least square was conducted to test the hypotheses. Heckman selection model and instrument variable regression with two-stage least square (IVREG with 2SLS) were also used to control the self-selection and endogeneity problems, respectively. To enhance the validity of the main results, alternative audit quality measures were used.

The empirical findings show that board ownership and engagement partner ownership have an impact on audit quality. The results indicate that engagement partners with high shares enhance audit quality only in Big4 audit firms. The positive effect of higher board ownership on audit quality is more prominent in non-Big4 firms. The Heckman two-stage procedure and IVREG with 2SLS were conducted, both of which were consistent with the main results. The results regarding alternative audit quality measures are in accordance with the main estimation results.

To the best of the author’s knowledge, this is the first study examining the impact of audit firm board ownership on audit quality. In addition, this paper further advances the literature by investigating the effects of ownership at engagement partner levels on audit quality in the context of an emerging market, Turkey.

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Does audit firm governance matter to audit quality? Evidence from Turkey10.1108/JFRA-09-2021-0274Journal of Financial Reporting and Accounting2022-03-08© 2022 Emerald Publishing LimitedMurat OcakJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-03-0810.1108/JFRA-09-2021-0274https://www.emerald.com/insight/content/doi/10.1108/JFRA-09-2021-0274/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
The effect of XBRL adoption on corporate tax avoidance: empirical evidence from an emerging countryhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-09-2021-0281/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to study the impact of the adoption of eXtensible Business Reporting Language (XBRL) on corporate tax avoidance. This paper used a quantitative method with panel data regression models using a sample of firms listed on the Indonesia Stock Exchange from 2011 to 2018. The regression results demonstrate that XBRL implementation does not have any impact on corporate tax avoidance. The results indicate that tax avoidance is not reduced following XBRL adoption. This report shows unexpected and unfavourable outcomes of XBRL financial reporting in a developing country. This study employs a sample of firms from one emerging country only. The study proposes several implications for using XBRL in tax reporting, which may help the tax authorities reduce tax avoidance. Regulators need to develop adequate taxonomies with standardized extensions related to tax information in the XBRL format. They include tax tags from financial statements and tax tags from the disclosure section, to gain more comprehensive corporate tax information. This study proposes and tests an explanation for the effect of XBRL adoption on corporate tax avoidance in the context of a developing country.The effect of XBRL adoption on corporate tax avoidance: empirical evidence from an emerging country
Arfah Habib Saragih, Syaiful Ali
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to study the impact of the adoption of eXtensible Business Reporting Language (XBRL) on corporate tax avoidance.

This paper used a quantitative method with panel data regression models using a sample of firms listed on the Indonesia Stock Exchange from 2011 to 2018.

The regression results demonstrate that XBRL implementation does not have any impact on corporate tax avoidance. The results indicate that tax avoidance is not reduced following XBRL adoption. This report shows unexpected and unfavourable outcomes of XBRL financial reporting in a developing country.

This study employs a sample of firms from one emerging country only.

The study proposes several implications for using XBRL in tax reporting, which may help the tax authorities reduce tax avoidance. Regulators need to develop adequate taxonomies with standardized extensions related to tax information in the XBRL format. They include tax tags from financial statements and tax tags from the disclosure section, to gain more comprehensive corporate tax information.

This study proposes and tests an explanation for the effect of XBRL adoption on corporate tax avoidance in the context of a developing country.

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The effect of XBRL adoption on corporate tax avoidance: empirical evidence from an emerging country10.1108/JFRA-09-2021-0281Journal of Financial Reporting and Accounting2022-03-17© 2022 Emerald Publishing LimitedArfah Habib SaragihSyaiful AliJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-03-1710.1108/JFRA-09-2021-0281https://www.emerald.com/insight/content/doi/10.1108/JFRA-09-2021-0281/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
The Machiavellianism of Tunisian accountants and whistleblowing of fraudulent actshttps://www.emerald.com/insight/content/doi/10.1108/JFRA-09-2021-0296/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to examine the influence of accounting professionals’ Machiavellian behavior and ethical judgments on their intention to report fraudulent acts and also to examine the moderating effect of Machiavellianism on the relationship between professionals’ ethical judgments and whistleblowing intention, as well as the mediating effect of personal responsibility, personal costs/benefits and the seriousness of the questionable act on this relationship. The data were collected via a survey sent to 201 Tunisian accounting professionals and analyzed using the structural equation method. The results indicate that ethical judgments support the whistleblowing intentions among Tunisian accountants. However, this relationship is affected by Machiavellian behavior that minimizes whistleblowing. Furthermore, the results show that Machiavellianism is negatively associated with whistleblowing intention and has an indirect effect on whistleblowing through perceived personal benefit and the seriousness of the questionable act. Examining the ethical ideologies that may affect whistleblowing, including Machiavellianism and ethical judgment, in the Tunisian context contributes to the literature on the accounting profession in the Middle East and North Africa. The results of this study could raise awareness among policymakers and regulators in developing countries, particularly in Tunisia, to value whistleblowing as a mechanism for detecting and controlling organizational misconduct and enact regulations that encourage accounting professionals to report fraudulent acts while protecting them.The Machiavellianism of Tunisian accountants and whistleblowing of fraudulent acts
Saida Dammak, Sonia Mbarek, Manel Jmal
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to examine the influence of accounting professionals’ Machiavellian behavior and ethical judgments on their intention to report fraudulent acts and also to examine the moderating effect of Machiavellianism on the relationship between professionals’ ethical judgments and whistleblowing intention, as well as the mediating effect of personal responsibility, personal costs/benefits and the seriousness of the questionable act on this relationship.

The data were collected via a survey sent to 201 Tunisian accounting professionals and analyzed using the structural equation method.

The results indicate that ethical judgments support the whistleblowing intentions among Tunisian accountants. However, this relationship is affected by Machiavellian behavior that minimizes whistleblowing. Furthermore, the results show that Machiavellianism is negatively associated with whistleblowing intention and has an indirect effect on whistleblowing through perceived personal benefit and the seriousness of the questionable act.

Examining the ethical ideologies that may affect whistleblowing, including Machiavellianism and ethical judgment, in the Tunisian context contributes to the literature on the accounting profession in the Middle East and North Africa. The results of this study could raise awareness among policymakers and regulators in developing countries, particularly in Tunisia, to value whistleblowing as a mechanism for detecting and controlling organizational misconduct and enact regulations that encourage accounting professionals to report fraudulent acts while protecting them.

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The Machiavellianism of Tunisian accountants and whistleblowing of fraudulent acts10.1108/JFRA-09-2021-0296Journal of Financial Reporting and Accounting2022-05-03© 2022 Emerald Publishing LimitedSaida DammakSonia MbarekManel JmalJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-05-0310.1108/JFRA-09-2021-0296https://www.emerald.com/insight/content/doi/10.1108/JFRA-09-2021-0296/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
Does the CEO’s financial and accounting expertise affect the financial reporting quality? Evidence from an emerging economyhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-09-2021-0301/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to analyse the role of the financial and accounting expertise of the chief executive officer (CEO) on financial reporting quality (FRQ) in an emerging economy. This study is based on data collected from a large sample of all non-financial companies listed on Vietnamese stock exchanges during the period 2016–2020 with 2,435 observations. FEM-ROBUST standard errors regression model is used to examine the relationship between the financial, accounting expertise of CEOs and FRQ through earnings management by discretionary accruals. The results show that CEOs with financial and accounting expertise have more influence and intervention on earnings management and thus adversely affect FRQ. This behaviour is explained by the fact that CEOs not only have a firm grasp of financial and accounting policies but also know the tricks to interfere with earnings management. Moreover, in the context of emerging economies, CEOs’ awareness and management level are still limited and legal sanctions are not yet strict, so when they have power in their hands, CEOs immediately find ways to build a reputation to enhance the power and earnings for the CEOs themselves. The limitation of this study is first of all that the research data are not complete and rich because the companies are prohibited from disclosing information and the cooperation relationship is not close. Next is the new research in only one emerging market – Vietnam – so the generalizability is not high. To the best of the authors’ knowledge, this is the first study to examine the impact of CEOs’ accounting and finance expertise on FRQ in an emerging economy, contributing to the existing literature regarding the scientific debates about CEOs, CEO characteristics, earnings management and FRQ.Does the CEO’s financial and accounting expertise affect the financial reporting quality? Evidence from an emerging economy
Diem Nhat Phuong Ngo, Cong Van Nguyen
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to analyse the role of the financial and accounting expertise of the chief executive officer (CEO) on financial reporting quality (FRQ) in an emerging economy.

This study is based on data collected from a large sample of all non-financial companies listed on Vietnamese stock exchanges during the period 2016–2020 with 2,435 observations. FEM-ROBUST standard errors regression model is used to examine the relationship between the financial, accounting expertise of CEOs and FRQ through earnings management by discretionary accruals.

The results show that CEOs with financial and accounting expertise have more influence and intervention on earnings management and thus adversely affect FRQ. This behaviour is explained by the fact that CEOs not only have a firm grasp of financial and accounting policies but also know the tricks to interfere with earnings management. Moreover, in the context of emerging economies, CEOs’ awareness and management level are still limited and legal sanctions are not yet strict, so when they have power in their hands, CEOs immediately find ways to build a reputation to enhance the power and earnings for the CEOs themselves.

The limitation of this study is first of all that the research data are not complete and rich because the companies are prohibited from disclosing information and the cooperation relationship is not close. Next is the new research in only one emerging market – Vietnam – so the generalizability is not high.

To the best of the authors’ knowledge, this is the first study to examine the impact of CEOs’ accounting and finance expertise on FRQ in an emerging economy, contributing to the existing literature regarding the scientific debates about CEOs, CEO characteristics, earnings management and FRQ.

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Does the CEO’s financial and accounting expertise affect the financial reporting quality? Evidence from an emerging economy10.1108/JFRA-09-2021-0301Journal of Financial Reporting and Accounting2022-04-13© 2022 Emerald Publishing LimitedDiem Nhat Phuong NgoCong Van NguyenJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-04-1310.1108/JFRA-09-2021-0301https://www.emerald.com/insight/content/doi/10.1108/JFRA-09-2021-0301/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
The relationship between corporate sustainability performance and earnings management: evidence from emerging East Asian economieshttps://www.emerald.com/insight/content/doi/10.1108/JFRA-09-2021-0302/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to investigate the relationship between corporate sustainability performance and earnings management in emerging East Asian economies. The authors base on the triple bottom line approach to measure corporate sustainability performance. In terms of earnings management, two models are applied to detect real activities manipulation and discretionary accruals. The authors use panel data analysis of 410 listed non-financial firms in emerging East Asian economies from 2016 to 2020 that are collected from the Thomson Reuters Eikon database. The authors find a negative influence of corporate sustainability performance on real activities manipulation and discretionary accruals. The findings highlight the long-term perspective of sustainable development strategies in relation to earnings management. The authors conclude that sustainable firms in emerging East Asia are less likely to engage in earnings management. The study would be of interest to investors who need more detailed assessments of financial reporting quality to facilitate their investment decision-making and to policymakers who need more understanding of business practices and reporting behaviors of East Asian firms. The study has shed light on the role of corporate sustainability performance in constraining earnings management and the role of corporate ethics in providing transparent and reliable financial reporting in emerging East Asian economies.The relationship between corporate sustainability performance and earnings management: evidence from emerging East Asian economies
Linh-TX Nguyen
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to investigate the relationship between corporate sustainability performance and earnings management in emerging East Asian economies.

The authors base on the triple bottom line approach to measure corporate sustainability performance. In terms of earnings management, two models are applied to detect real activities manipulation and discretionary accruals. The authors use panel data analysis of 410 listed non-financial firms in emerging East Asian economies from 2016 to 2020 that are collected from the Thomson Reuters Eikon database.

The authors find a negative influence of corporate sustainability performance on real activities manipulation and discretionary accruals. The findings highlight the long-term perspective of sustainable development strategies in relation to earnings management. The authors conclude that sustainable firms in emerging East Asia are less likely to engage in earnings management.

The study would be of interest to investors who need more detailed assessments of financial reporting quality to facilitate their investment decision-making and to policymakers who need more understanding of business practices and reporting behaviors of East Asian firms.

The study has shed light on the role of corporate sustainability performance in constraining earnings management and the role of corporate ethics in providing transparent and reliable financial reporting in emerging East Asian economies.

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The relationship between corporate sustainability performance and earnings management: evidence from emerging East Asian economies10.1108/JFRA-09-2021-0302Journal of Financial Reporting and Accounting2022-03-29© 2022 Emerald Publishing LimitedLinh-TX NguyenJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-03-2910.1108/JFRA-09-2021-0302https://www.emerald.com/insight/content/doi/10.1108/JFRA-09-2021-0302/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
The impact of earnings quality on corporate cash holdings: evidence from an emerging economyhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-09-2022-0321/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to inspect the impact of earnings quality on corporate cash holdings of Jordanian companies listed on the Amman Stock Exchange. This study examines a large sample of (98) Jordanian companies listed on the Amman Stock Exchange during the period that ranges from 2009 to 2019. Earnings quality was computed using two different methods; firstly, through the absolute abnormal discretionary accruals (as an inverse measure of earnings quality), which were estimated using the Dechow et al.’s (1995) cross-sectional version of the Modified Jones model and the Kothari et al. (2005) model; and secondly, through earnings persistence as a direct measure of earnings quality. The empirical results of this study reveal that poor accounting quality (high levels of abnormal discretionary accruals) is associated with higher levels of cash holdings, implying that as the quality of earnings decreases, the harmful effects of information asymmetry and adverse selection costs will increase, leading, therefore, Jordanian companies to increase their corporate cash holdings levels to act as a buffer against any cash shortages. Further, the authors document that higher accounting quality (more persistent earnings) is associated with lower levels of cash holdings. In addition, this study found that earnings quality negatively and significantly affects the cash holdings of profitable companies in Jordan. Thus, earnings quality appeared to be a significant determinant of cash holdings for profit-making companies but not for companies enduring losses. This study contributes to the limited evidence that investigates the relationship between earnings quality and corporate cash holdings. Where the majority of previous studies have focused on developed economies, to the best of the authors’ knowledge, this study is the first in Jordan to comprehensively explore the relationship between earnings quality, computed by the absolute abnormal discretionary accruals and earnings persistence, and corporate cash holdings. Also, it is the first to explore the nature of the earnings quality-cash holding nexus in loss-making companies compared with their profit-making counterparts to the best of the authors’ knowledge. The results of this study have important policy implications for managers, creditors, investors and academics in Jordan and other emerging economies that share similar characteristics.The impact of earnings quality on corporate cash holdings: evidence from an emerging economy
Lara Al-Haddad, Shadi Al-Ghoul
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to inspect the impact of earnings quality on corporate cash holdings of Jordanian companies listed on the Amman Stock Exchange.

This study examines a large sample of (98) Jordanian companies listed on the Amman Stock Exchange during the period that ranges from 2009 to 2019. Earnings quality was computed using two different methods; firstly, through the absolute abnormal discretionary accruals (as an inverse measure of earnings quality), which were estimated using the Dechow et al.’s (1995) cross-sectional version of the Modified Jones model and the Kothari et al. (2005) model; and secondly, through earnings persistence as a direct measure of earnings quality.

The empirical results of this study reveal that poor accounting quality (high levels of abnormal discretionary accruals) is associated with higher levels of cash holdings, implying that as the quality of earnings decreases, the harmful effects of information asymmetry and adverse selection costs will increase, leading, therefore, Jordanian companies to increase their corporate cash holdings levels to act as a buffer against any cash shortages. Further, the authors document that higher accounting quality (more persistent earnings) is associated with lower levels of cash holdings. In addition, this study found that earnings quality negatively and significantly affects the cash holdings of profitable companies in Jordan. Thus, earnings quality appeared to be a significant determinant of cash holdings for profit-making companies but not for companies enduring losses.

This study contributes to the limited evidence that investigates the relationship between earnings quality and corporate cash holdings. Where the majority of previous studies have focused on developed economies, to the best of the authors’ knowledge, this study is the first in Jordan to comprehensively explore the relationship between earnings quality, computed by the absolute abnormal discretionary accruals and earnings persistence, and corporate cash holdings. Also, it is the first to explore the nature of the earnings quality-cash holding nexus in loss-making companies compared with their profit-making counterparts to the best of the authors’ knowledge. The results of this study have important policy implications for managers, creditors, investors and academics in Jordan and other emerging economies that share similar characteristics.

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The impact of earnings quality on corporate cash holdings: evidence from an emerging economy10.1108/JFRA-09-2022-0321Journal of Financial Reporting and Accounting2023-05-26© 2023 Emerald Publishing LimitedLara Al-HaddadShadi Al-GhoulJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-05-2610.1108/JFRA-09-2022-0321https://www.emerald.com/insight/content/doi/10.1108/JFRA-09-2022-0321/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The informativeness of dividend ratios and their economic predictive value towards equity premiumhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-09-2022-0327/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to examine and compare the dividend ratios’ statistical and economic ability to predict the equity premium in the UK and US markets and two US sub-indices (S&P 500 Growth and S&P 500 Value). In this paper, the authors use the linear regression models to examine the dividend ratios’ statistical ability to predict the equity premium. The in-sample and out-of-sample approaches, including Diebold and Mariano (1995) statistics, and Goyal and Welch’s (2003) graphical approach, are used. Also, the mean-variance analysis is used to test the economic significance. The paper findings indicate that the dividend ratios have in-sample and out-of-sample predictive abilities in both UK and US markets and both US sub-indices. However, the results show that the dividend ratios have a less impressive predictive ability in the US market compared to the UK market and less in the US value index than the US growth index. This could indicate that there is no relation between the number of companies that distribute dividends in each index and the informativeness of dividends ratios. Furthermore, the tests show the dividend ratios’ predictive ability departure during particular periods and in some indices. Results and implications of this research are exclusively applied to the US and UK markets. These results can also be applied with caution to other markets, taking into consideration the distinctive characteristics of these markets. Results revealed in this paper imply that the investors in any of the indices may experience economic gain by adopting a dynamic trading strategy using the information content of the dividend ratios prediction models instead of the benchmark model, which is the prevailing simple moving average model. This paper adds value through testing the prediction models’ economic significance in two well-developed markets, in addition to exploring the relationship between the number of companies distributing cash dividends and the dividends ratio prediction ability. Unlike most of the previous studies in which dividend ratios’ prediction ability is attributed to the number of companies that distribute dividends in the market, this paper denied this interpretation by studying two S&P 500 sub-indices. To the best of the authors’ knowledge, this is the first study to test the prediction models’ ability for these sub-indices.The informativeness of dividend ratios and their economic predictive value towards equity premium
Ali A. Awad, Radhi Al-Hamadeen, Malek Alsharairi
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to examine and compare the dividend ratios’ statistical and economic ability to predict the equity premium in the UK and US markets and two US sub-indices (S&P 500 Growth and S&P 500 Value).

In this paper, the authors use the linear regression models to examine the dividend ratios’ statistical ability to predict the equity premium. The in-sample and out-of-sample approaches, including Diebold and Mariano (1995) statistics, and Goyal and Welch’s (2003) graphical approach, are used. Also, the mean-variance analysis is used to test the economic significance.

The paper findings indicate that the dividend ratios have in-sample and out-of-sample predictive abilities in both UK and US markets and both US sub-indices. However, the results show that the dividend ratios have a less impressive predictive ability in the US market compared to the UK market and less in the US value index than the US growth index. This could indicate that there is no relation between the number of companies that distribute dividends in each index and the informativeness of dividends ratios. Furthermore, the tests show the dividend ratios’ predictive ability departure during particular periods and in some indices.

Results and implications of this research are exclusively applied to the US and UK markets. These results can also be applied with caution to other markets, taking into consideration the distinctive characteristics of these markets.

Results revealed in this paper imply that the investors in any of the indices may experience economic gain by adopting a dynamic trading strategy using the information content of the dividend ratios prediction models instead of the benchmark model, which is the prevailing simple moving average model.

This paper adds value through testing the prediction models’ economic significance in two well-developed markets, in addition to exploring the relationship between the number of companies distributing cash dividends and the dividends ratio prediction ability. Unlike most of the previous studies in which dividend ratios’ prediction ability is attributed to the number of companies that distribute dividends in the market, this paper denied this interpretation by studying two S&P 500 sub-indices. To the best of the authors’ knowledge, this is the first study to test the prediction models’ ability for these sub-indices.

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The informativeness of dividend ratios and their economic predictive value towards equity premium10.1108/JFRA-09-2022-0327Journal of Financial Reporting and Accounting2023-03-24© 2023 Emerald Publishing LimitedAli A. AwadRadhi Al-HamadeenMalek AlsharairiJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-03-2410.1108/JFRA-09-2022-0327https://www.emerald.com/insight/content/doi/10.1108/JFRA-09-2022-0327/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The appearance of anti-corruption reporting in a developed market: UK evidencehttps://www.emerald.com/insight/content/doi/10.1108/JFRA-09-2022-0329/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to examine anti-corruption disclosure (ACD) following government legislation, specifically the UK Bribery Act, 2010, through focusing on the UK extractive industry. This study uses content analysis for data analysis with an ACD checklist developed to capture ACD in annual reports during the period 2003–2019. The study found an increase in ACD following 2010, with companies answering ACD questions and addressing categories that they previously ignored. Most of the previous studies have examined voluntary ACD; this study contributes to the literature by applying an index developed from government regulation to investigate the difference that regulation can make to disclosure. Hence, this study provides evidence of how, from an institutional perspective, legislation plays an important role in facilitating and endorsing anti-corruption reporting.The appearance of anti-corruption reporting in a developed market: UK evidence
Musa Hasan Ghazwani, Mark Whittington, Ahmed Diab
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to examine anti-corruption disclosure (ACD) following government legislation, specifically the UK Bribery Act, 2010, through focusing on the UK extractive industry.

This study uses content analysis for data analysis with an ACD checklist developed to capture ACD in annual reports during the period 2003–2019.

The study found an increase in ACD following 2010, with companies answering ACD questions and addressing categories that they previously ignored.

Most of the previous studies have examined voluntary ACD; this study contributes to the literature by applying an index developed from government regulation to investigate the difference that regulation can make to disclosure. Hence, this study provides evidence of how, from an institutional perspective, legislation plays an important role in facilitating and endorsing anti-corruption reporting.

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The appearance of anti-corruption reporting in a developed market: UK evidence10.1108/JFRA-09-2022-0329Journal of Financial Reporting and Accounting2023-09-12© 2023 Emerald Publishing LimitedMusa Hasan GhazwaniMark WhittingtonAhmed DiabJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-09-1210.1108/JFRA-09-2022-0329https://www.emerald.com/insight/content/doi/10.1108/JFRA-09-2022-0329/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Do media coverage and audit quality of US companies affect their Environmental, Social and Governance transparency?https://www.emerald.com/insight/content/doi/10.1108/JFRA-09-2022-0353/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe purpose of this paper was to study the direct impact of audit quality on environmental, social and governance (ESG) transparency. It aimed also to investigate the moderating effect of media coverage on the relationship between audit quality and ESG transparency in the USA. The sample consisted of US companies listed in the Standard and Poor’s 500 Stock Index between 2010 and 2019. The Thomson Reuters database was used to collect ESG disclosure scores and governance information. The authors applied multiple panel data regressions. The results showed that audit quality has a direct positive effect on ESG transparency. The findings also showed that the high exposure to public media by firms, the more they commit to high audit quality leading to disclose more transparent ESG information. The results illustrated the significance of an external audit on an organization’s ESG report. Second, improving data quality has significant consequences not only for rating agencies but also for investors, businesses and researchers. These steps are required to increase the information content of ESG ratings. The findings demonstrated that third-party external verification improves the dependability of nonfinancial reporting, hence bridging the confidence gap between corporations and the market regarding sustainability reporting.Do media coverage and audit quality of US companies affect their Environmental, Social and Governance transparency?
Mouna Moalla, Saida Dammak
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

The purpose of this paper was to study the direct impact of audit quality on environmental, social and governance (ESG) transparency. It aimed also to investigate the moderating effect of media coverage on the relationship between audit quality and ESG transparency in the USA.

The sample consisted of US companies listed in the Standard and Poor’s 500 Stock Index between 2010 and 2019. The Thomson Reuters database was used to collect ESG disclosure scores and governance information. The authors applied multiple panel data regressions.

The results showed that audit quality has a direct positive effect on ESG transparency. The findings also showed that the high exposure to public media by firms, the more they commit to high audit quality leading to disclose more transparent ESG information.

The results illustrated the significance of an external audit on an organization’s ESG report. Second, improving data quality has significant consequences not only for rating agencies but also for investors, businesses and researchers. These steps are required to increase the information content of ESG ratings.

The findings demonstrated that third-party external verification improves the dependability of nonfinancial reporting, hence bridging the confidence gap between corporations and the market regarding sustainability reporting.

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Do media coverage and audit quality of US companies affect their Environmental, Social and Governance transparency?10.1108/JFRA-09-2022-0353Journal of Financial Reporting and Accounting2023-09-12© 2023 Emerald Publishing LimitedMouna MoallaSaida DammakJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-09-1210.1108/JFRA-09-2022-0353https://www.emerald.com/insight/content/doi/10.1108/JFRA-09-2022-0353/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Digital transformation and integration of artificial intelligence in financial institutions https://www.emerald.com/insight/content/doi/10.1108/JFRA-09-2023-0544/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestIntegrating artificial intelligence (AI) into various industries, including the financial sector, has transformed them. This paper aims to examine the influence of integrating AI, including machine learning, process automation, predictive analytics and chatbots, on financial institutions and explores its various aspects and areas. The study aims to determine the impact of AI integration on financial services, products and customer experience. The research study uses quantitative and qualitative methods, as well as secondary data analysis. It investigates four AI subfields: machine learning, process automation, predictive analytics and chatbots. The research findings indicate that integrating AI, particularly in machine learning and chatbot subfields, holds promise and high strategic potential for financial institutions. These subfields can contribute significantly to enhancing financial services and customer experience. However, the significance of predictive analytics integration and process automation is relatively lower. Although these subfields retain their usefulness, they might necessitate alternative workflows and tools that incorporate human involvement. Overall, AI integration minimizes human interactions and errors in financial institutions. The research study contributes original insights by exploring the specific subfields of AI within the financial industry and assessing their strategic significance. It provides recommendations for financial institutions to adopt AI integration partially in multiple phases, measure and evaluate the impact of the transformation and structure internal units and expertise to strategize adoption and change.Digital transformation and integration of artificial intelligence in financial institutions 
Sara Ebrahim Mohsen, Allam Hamdan, Haneen Mohammad Shoaib
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

Integrating artificial intelligence (AI) into various industries, including the financial sector, has transformed them. This paper aims to examine the influence of integrating AI, including machine learning, process automation, predictive analytics and chatbots, on financial institutions and explores its various aspects and areas. The study aims to determine the impact of AI integration on financial services, products and customer experience.

The research study uses quantitative and qualitative methods, as well as secondary data analysis. It investigates four AI subfields: machine learning, process automation, predictive analytics and chatbots.

The research findings indicate that integrating AI, particularly in machine learning and chatbot subfields, holds promise and high strategic potential for financial institutions. These subfields can contribute significantly to enhancing financial services and customer experience. However, the significance of predictive analytics integration and process automation is relatively lower. Although these subfields retain their usefulness, they might necessitate alternative workflows and tools that incorporate human involvement. Overall, AI integration minimizes human interactions and errors in financial institutions.

The research study contributes original insights by exploring the specific subfields of AI within the financial industry and assessing their strategic significance. It provides recommendations for financial institutions to adopt AI integration partially in multiple phases, measure and evaluate the impact of the transformation and structure internal units and expertise to strategize adoption and change.

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Digital transformation and integration of artificial intelligence in financial institutions 10.1108/JFRA-09-2023-0544Journal of Financial Reporting and Accounting2024-02-02© 2024 Emerald Publishing LimitedSara Ebrahim MohsenAllam HamdanHaneen Mohammad ShoaibJournal of Financial Reporting and Accountingahead-of-printahead-of-print2024-02-0210.1108/JFRA-09-2023-0544https://www.emerald.com/insight/content/doi/10.1108/JFRA-09-2023-0544/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Emerald Publishing Limited
The impact of environmental, social and governance (ESG) reporting on corporate profitability: evidence from Thailandhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-09-2023-0555/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe United Nations' sustainable development goals (SDGs) put together a global framework in an attempt to address environmental, social and governance (ESG) concerns. Measuring a company’s contribution to the SDGs relies heavily on ESG reporting. This paper aims to examine the impact of ESG reporting on the corporate profitability of listed companies in Thailand over the period of 2019–2021. Using 147 listed firms in the ESG group, content analysis was used to quantify the ESG reporting (within 11 themes), while corporate profitability was measured by return on asset and return on equity. Descriptive analysis, correlation matrix and panel regression are used to analyze the data of this study. Consistent with the legitimacy, stakeholder and signaling theories, the authors found a statistically significant and positive impact of ESG reporting on corporate profitability in Thailand. The findings highlight the importance of incorporating ESG considerations into companies’ reporting and decision-making processes, as these can enhance firm profitability and performance, attract stakeholders, improve their competitive advantage and step toward sustainability.The impact of environmental, social and governance (ESG) reporting on corporate profitability: evidence from Thailand
Sirimon Treepongkaruna, Muttanachai Suttipun
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

The United Nations' sustainable development goals (SDGs) put together a global framework in an attempt to address environmental, social and governance (ESG) concerns. Measuring a company’s contribution to the SDGs relies heavily on ESG reporting. This paper aims to examine the impact of ESG reporting on the corporate profitability of listed companies in Thailand over the period of 2019–2021.

Using 147 listed firms in the ESG group, content analysis was used to quantify the ESG reporting (within 11 themes), while corporate profitability was measured by return on asset and return on equity. Descriptive analysis, correlation matrix and panel regression are used to analyze the data of this study.

Consistent with the legitimacy, stakeholder and signaling theories, the authors found a statistically significant and positive impact of ESG reporting on corporate profitability in Thailand.

The findings highlight the importance of incorporating ESG considerations into companies’ reporting and decision-making processes, as these can enhance firm profitability and performance, attract stakeholders, improve their competitive advantage and step toward sustainability.

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The impact of environmental, social and governance (ESG) reporting on corporate profitability: evidence from Thailand10.1108/JFRA-09-2023-0555Journal of Financial Reporting and Accounting2024-03-05© 2024 Emerald Publishing LimitedSirimon TreepongkarunaMuttanachai SuttipunJournal of Financial Reporting and Accountingahead-of-printahead-of-print2024-03-0510.1108/JFRA-09-2023-0555https://www.emerald.com/insight/content/doi/10.1108/JFRA-09-2023-0555/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Emerald Publishing Limited
Nonfinancial value creation of integrated reportinghttps://www.emerald.com/insight/content/doi/10.1108/JFRA-10-2021-0332/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to explore the nonfinancial drivers of value creation that influence an investment decision and present a set of drivers that contribute with a useful integrated reporting to its providers of financial capital using evidence from Brazil. This paper is based on a systematic literature review in the Scopus, Web of Science and Google Scholar databases in the period from 2005 to 2020. Interpretive content analysis is used in 42 documents identified to explore nonfinancial drivers to demand by providers of financial capital, which are classified according to the capitals nonfinancial suggested by the integrated report (IR). Then, the results are evaluated by Brazilian professional investors in a focus group. The members of the focus group do not consider the IR relevant to investment decision and neither the information about natural capital nor social capital. They highlighted two nonfinancial drivers of value not identified in the previous literature. The focus group is limited by subjects’ availability and by the participants’ number. But its results represent initial discussions on the subject in the Brazilian context. The results of this study have value, principally, to investors, target audience of IR, because it aligns your demands with the IRs content, improving its usefulness. To the best of the authors’ knowledge, this manuscript is the first study to investigate the perception of Brazilian professional investors about the importance of the IR in investment decision-making and to identify content relevant to the financial capital provider’s investment decision, which can improve the usefulness of IR.Nonfinancial value creation of integrated reporting
Cintia de Melo de Albuquerque Ribeiro, Flavio Ezequiel, Luis Perez Zotes, Julio Vieira Neto
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to explore the nonfinancial drivers of value creation that influence an investment decision and present a set of drivers that contribute with a useful integrated reporting to its providers of financial capital using evidence from Brazil.

This paper is based on a systematic literature review in the Scopus, Web of Science and Google Scholar databases in the period from 2005 to 2020. Interpretive content analysis is used in 42 documents identified to explore nonfinancial drivers to demand by providers of financial capital, which are classified according to the capitals nonfinancial suggested by the integrated report (IR). Then, the results are evaluated by Brazilian professional investors in a focus group.

The members of the focus group do not consider the IR relevant to investment decision and neither the information about natural capital nor social capital. They highlighted two nonfinancial drivers of value not identified in the previous literature.

The focus group is limited by subjects’ availability and by the participants’ number. But its results represent initial discussions on the subject in the Brazilian context.

The results of this study have value, principally, to investors, target audience of IR, because it aligns your demands with the IRs content, improving its usefulness.

To the best of the authors’ knowledge, this manuscript is the first study to investigate the perception of Brazilian professional investors about the importance of the IR in investment decision-making and to identify content relevant to the financial capital provider’s investment decision, which can improve the usefulness of IR.

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Nonfinancial value creation of integrated reporting10.1108/JFRA-10-2021-0332Journal of Financial Reporting and Accounting2022-04-20© 2022 Emerald Publishing LimitedCintia de Melo de Albuquerque RibeiroFlavio EzequielLuis Perez ZotesJulio Vieira NetoJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-04-2010.1108/JFRA-10-2021-0332https://www.emerald.com/insight/content/doi/10.1108/JFRA-10-2021-0332/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
Financial statement fraud in Indonesia: a longitudinal study of financial misstatement in the pre- and post-establishment of financial services authorityhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-10-2021-0336/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to investigate cases of fraudulent financial statements that have occurred in Indonesia and explore the similarities of cases that existed in the period before and after the establishment of the Financial Services Authority. This paper provides a descriptive examination of financial misstatements issued by different regimes by listed companies of the capital market and financial institution supervisory agency and the introduction of new financial service authority; among 93 listed companies that were subject to an official investigation arising from the publication of financial misstatements, these assessments were facilitated by mean of content analysis of annual reports following the announcement of an investigation. The findings indicate that each regime has a specific pattern of financial statement fraud. It is found that senior management is responsible for most fraud, and recording a fictitious sale is the most common method of falsifying financial statements. Under the new regime, the publication of cases is limited since the introduction of risk-based supervision. Financial Services Authority is likely to fine and prosecute the director of a company as a perpetrator rather than a corporation as a legal entity. This study contributes to the literature on the incidence of financial statement fraud in public companies and provides a detailed descriptive comparison of cases scrutinized by securities exchange commission in an emerging country.Financial statement fraud in Indonesia: a longitudinal study of financial misstatement in the pre- and post-establishment of financial services authority
Jaswadi Jaswadi, Hari Purnomo, Sumiadji Sumiadji
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to investigate cases of fraudulent financial statements that have occurred in Indonesia and explore the similarities of cases that existed in the period before and after the establishment of the Financial Services Authority.

This paper provides a descriptive examination of financial misstatements issued by different regimes by listed companies of the capital market and financial institution supervisory agency and the introduction of new financial service authority; among 93 listed companies that were subject to an official investigation arising from the publication of financial misstatements, these assessments were facilitated by mean of content analysis of annual reports following the announcement of an investigation.

The findings indicate that each regime has a specific pattern of financial statement fraud. It is found that senior management is responsible for most fraud, and recording a fictitious sale is the most common method of falsifying financial statements. Under the new regime, the publication of cases is limited since the introduction of risk-based supervision. Financial Services Authority is likely to fine and prosecute the director of a company as a perpetrator rather than a corporation as a legal entity.

This study contributes to the literature on the incidence of financial statement fraud in public companies and provides a detailed descriptive comparison of cases scrutinized by securities exchange commission in an emerging country.

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Financial statement fraud in Indonesia: a longitudinal study of financial misstatement in the pre- and post-establishment of financial services authority10.1108/JFRA-10-2021-0336Journal of Financial Reporting and Accounting2022-04-11© 2022 Emerald Publishing LimitedJaswadi JaswadiHari PurnomoSumiadji SumiadjiJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-04-1110.1108/JFRA-10-2021-0336https://www.emerald.com/insight/content/doi/10.1108/JFRA-10-2021-0336/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
Intangible investment and non-financial performance of Egyptian firms: the moderating role of the COVID-19 pandemichttps://www.emerald.com/insight/content/doi/10.1108/JFRA-10-2021-0362/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to examine the impact of intangible investment on non-financial performance. This study also examines the moderating effect of the COVID-19 pandemic on this relationship. This study extracted data from annual reports for a sample of Egyptian firms from 2012 to 2020. This study used the generalized method of moment for testing research. This study finds that intangible investment positively affects non-financial performance and the COVID-19 pandemic has weakened this positive effect. A small sample size is one of the limitations of this study. Furthermore, because of the lack of data in Egypt, the analysis does not include other measures of intangible investment. Finally, the sectoral analysis does not include all sectors because of the lack of observations in some sectors. This study offers practical and social implications. It would help policymakers, regulators and shareholders to realize the importance of the intangible investment and also shed light on the consequences of the COVID-19 pandemic. It also offers managerial implications. It motivates managers to invest more in intangible investment as an important resource to increase customer satisfaction and loyalty, enhance the internal operating performance and improve learning and growth, which result in creating sustainable competitive advantage. This study provides new empirical evidence on the impact of intangible investment on different dimensions of non-financial performance. To the best of the authors’ knowledge, this paper offers the first empirical evidence on the moderating role of the COVID-19 pandemic in the relationship between intangible investment and non-financial performance.Intangible investment and non-financial performance of Egyptian firms: the moderating role of the COVID-19 pandemic
Emad Sayed, Karim Mansour, Khaled Hussainey
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to examine the impact of intangible investment on non-financial performance. This study also examines the moderating effect of the COVID-19 pandemic on this relationship.

This study extracted data from annual reports for a sample of Egyptian firms from 2012 to 2020. This study used the generalized method of moment for testing research.

This study finds that intangible investment positively affects non-financial performance and the COVID-19 pandemic has weakened this positive effect.

A small sample size is one of the limitations of this study. Furthermore, because of the lack of data in Egypt, the analysis does not include other measures of intangible investment. Finally, the sectoral analysis does not include all sectors because of the lack of observations in some sectors.

This study offers practical and social implications. It would help policymakers, regulators and shareholders to realize the importance of the intangible investment and also shed light on the consequences of the COVID-19 pandemic. It also offers managerial implications. It motivates managers to invest more in intangible investment as an important resource to increase customer satisfaction and loyalty, enhance the internal operating performance and improve learning and growth, which result in creating sustainable competitive advantage.

This study provides new empirical evidence on the impact of intangible investment on different dimensions of non-financial performance. To the best of the authors’ knowledge, this paper offers the first empirical evidence on the moderating role of the COVID-19 pandemic in the relationship between intangible investment and non-financial performance.

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Intangible investment and non-financial performance of Egyptian firms: the moderating role of the COVID-19 pandemic10.1108/JFRA-10-2021-0362Journal of Financial Reporting and Accounting2022-04-11© 2022 Emerald Publishing LimitedEmad SayedKarim MansourKhaled HussaineyJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-04-1110.1108/JFRA-10-2021-0362https://www.emerald.com/insight/content/doi/10.1108/JFRA-10-2021-0362/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
Effect of corporate governance on corporate social responsibility in Vietnam: state-ownership as the moderating rolehttps://www.emerald.com/insight/content/doi/10.1108/JFRA-10-2021-0367/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to investigate the association between corporate governance (CG) and the corporate social responsibility (CSR) information disclosure as well as the moderating role of state-ownership between CG and CSR disclosure. To examine the relationship between CG and CSR disclosure, this study used the feasible general least squares and generalized method of moments method on a sample of 165 non-financial quoted companies over the 2015–2018 period, which account for about three-fourths of the Vietnamese stock exchange. The findings suggest that enterprises with smaller board size consisting mainly of independent directors have a higher CSR disclosure level. Moreover, when the chief executive officer is concurrently the chairman of the board, the level of CSR disclosure falls. Additionally, the moderating role of state ownership enhances CSR disclosure. The empirical results of this study form a solid foundation for policymakers and other stakeholders’ decisions in investing or establishing policies. This study provides empirical evidence on the relationship between CG and CSR disclosure in Vietnam – a developing country with no legal requirement on CSR disclosure. Moreover, this study emphasizes the moderating role of state ownership between CG and CSR disclosure, which clarifies the role of state ownership in establishing CG mechanisms.Effect of corporate governance on corporate social responsibility in Vietnam: state-ownership as the moderating role
Ho Xuan Thuy, Nguyen Vinh Khuong, Le Huu Tuan Anh, Pham Nhat Quyen
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to investigate the association between corporate governance (CG) and the corporate social responsibility (CSR) information disclosure as well as the moderating role of state-ownership between CG and CSR disclosure.

To examine the relationship between CG and CSR disclosure, this study used the feasible general least squares and generalized method of moments method on a sample of 165 non-financial quoted companies over the 2015–2018 period, which account for about three-fourths of the Vietnamese stock exchange.

The findings suggest that enterprises with smaller board size consisting mainly of independent directors have a higher CSR disclosure level. Moreover, when the chief executive officer is concurrently the chairman of the board, the level of CSR disclosure falls. Additionally, the moderating role of state ownership enhances CSR disclosure.

The empirical results of this study form a solid foundation for policymakers and other stakeholders’ decisions in investing or establishing policies.

This study provides empirical evidence on the relationship between CG and CSR disclosure in Vietnam – a developing country with no legal requirement on CSR disclosure. Moreover, this study emphasizes the moderating role of state ownership between CG and CSR disclosure, which clarifies the role of state ownership in establishing CG mechanisms.

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Effect of corporate governance on corporate social responsibility in Vietnam: state-ownership as the moderating role10.1108/JFRA-10-2021-0367Journal of Financial Reporting and Accounting2022-05-17© 2022 Emerald Publishing LimitedHo Xuan ThuyNguyen Vinh KhuongLe Huu Tuan AnhPham Nhat QuyenJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-05-1710.1108/JFRA-10-2021-0367https://www.emerald.com/insight/content/doi/10.1108/JFRA-10-2021-0367/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
Earnings management and tone management: evidence from FTSE 350 companieshttps://www.emerald.com/insight/content/doi/10.1108/JFRA-10-2021-0373/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to examine whether firms meeting or just beating an earnings benchmark engage in tone management in earnings conference calls to complement earnings management in the UK context. It also investigates whether the audience tone in beating or just meeting earnings fails to predict future performance. This study was performed using a sample of non-financial UK firms listed in the FTSE 350 index over the period 2010–2015. The findings show that firms that exercise more earnings management to meet or just beat earnings are positively associated with the abnormal tone during earnings conference calls. The outcomes also reveal that the audience’s tone of firms meeting or just beating an earnings benchmark fails to predict future performance. This confirms the effectiveness of the tone management in managing the perception of audience. This study highlights the need for increased accountability by firms on earnings conference call. It also supports academics and practitioners in understanding the management discretion used in reporting and communication during the earnings conference call. Overall, the results of this study are beneficial for regulators, policymakers and professionals, regarding confirming the need for the earnings conference calls to be regulated. To the best of the authors’ knowledge, this is the first study that examines the association between earnings management and tone management in the UK earnings conference calls. It adds to the existing literature by examining the self-serving behaviour of managerial tone during earnings conference calls within a sitting in which meeting or just beating a benchmark is used. Unlike several studies that explain the behaviour of tone as a signalling strategy, this study reveals that the tendency of impression management behaviour can explain the tone management.Earnings management and tone management: evidence from FTSE 350 companies
Salah Kayed, Rasmi Meqbel
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to examine whether firms meeting or just beating an earnings benchmark engage in tone management in earnings conference calls to complement earnings management in the UK context. It also investigates whether the audience tone in beating or just meeting earnings fails to predict future performance.

This study was performed using a sample of non-financial UK firms listed in the FTSE 350 index over the period 2010–2015.

The findings show that firms that exercise more earnings management to meet or just beat earnings are positively associated with the abnormal tone during earnings conference calls. The outcomes also reveal that the audience’s tone of firms meeting or just beating an earnings benchmark fails to predict future performance. This confirms the effectiveness of the tone management in managing the perception of audience.

This study highlights the need for increased accountability by firms on earnings conference call. It also supports academics and practitioners in understanding the management discretion used in reporting and communication during the earnings conference call. Overall, the results of this study are beneficial for regulators, policymakers and professionals, regarding confirming the need for the earnings conference calls to be regulated.

To the best of the authors’ knowledge, this is the first study that examines the association between earnings management and tone management in the UK earnings conference calls. It adds to the existing literature by examining the self-serving behaviour of managerial tone during earnings conference calls within a sitting in which meeting or just beating a benchmark is used. Unlike several studies that explain the behaviour of tone as a signalling strategy, this study reveals that the tendency of impression management behaviour can explain the tone management.

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Earnings management and tone management: evidence from FTSE 350 companies10.1108/JFRA-10-2021-0373Journal of Financial Reporting and Accounting2022-05-19© 2022 Emerald Publishing LimitedSalah KayedRasmi MeqbelJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-05-1910.1108/JFRA-10-2021-0373https://www.emerald.com/insight/content/doi/10.1108/JFRA-10-2021-0373/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
Earnings management in times of natural disastershttps://www.emerald.com/insight/content/doi/10.1108/JFRA-10-2021-0377/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe main purpose of this study is to examine the determinants of firms’ earnings management (EM) activities during natural disasters, specifically the 2011 floods in Thailand. The motivation for conducting this study is that although disasters stem from natural processes, such events affect firms’ actions, resulting in adverse economic and social outcomes. Based on data from listed companies in Thailand and using a sample of 5,786 firm-year observations from 2008 to 2013, this study uses the differences-in-differences method to estimate the relation between earnings quality (EQ) and floods. Additionally, this study uses the same research design to observe how fast firms engage in EM, as reflected by the trends in EQ following the floods. This study finds that firms engage in EM to increase their earnings numbers and misrepresent their performance after experiencing the 2011 floods in Thailand. The evidence is consistent with the hypothesis that natural disasters are related to EQ. In addition, this study finds that firms’ responses are observed only in the year after the floods (2012). This study contributes to the literature on EM and quality in two ways. First, this study provides new evidence that during crisis situations such as natural disasters, firms strive to signal good news to capital markets, consistent with the market expectation hypothesis. Second, this study shows that natural disasters are as useful and equal as other exogenous shocks such as financial crises for economic research.Earnings management in times of natural disasters
Sarayut Rueangsuwan, Supavinee Jevasuwan
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

The main purpose of this study is to examine the determinants of firms’ earnings management (EM) activities during natural disasters, specifically the 2011 floods in Thailand. The motivation for conducting this study is that although disasters stem from natural processes, such events affect firms’ actions, resulting in adverse economic and social outcomes.

Based on data from listed companies in Thailand and using a sample of 5,786 firm-year observations from 2008 to 2013, this study uses the differences-in-differences method to estimate the relation between earnings quality (EQ) and floods. Additionally, this study uses the same research design to observe how fast firms engage in EM, as reflected by the trends in EQ following the floods.

This study finds that firms engage in EM to increase their earnings numbers and misrepresent their performance after experiencing the 2011 floods in Thailand. The evidence is consistent with the hypothesis that natural disasters are related to EQ. In addition, this study finds that firms’ responses are observed only in the year after the floods (2012).

This study contributes to the literature on EM and quality in two ways. First, this study provides new evidence that during crisis situations such as natural disasters, firms strive to signal good news to capital markets, consistent with the market expectation hypothesis. Second, this study shows that natural disasters are as useful and equal as other exogenous shocks such as financial crises for economic research.

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Earnings management in times of natural disasters10.1108/JFRA-10-2021-0377Journal of Financial Reporting and Accounting2022-08-01© 2022 Emerald Publishing LimitedSarayut RueangsuwanSupavinee JevasuwanJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-08-0110.1108/JFRA-10-2021-0377https://www.emerald.com/insight/content/doi/10.1108/JFRA-10-2021-0377/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
The impact of corporate governance on forward-looking CSR disclosurehttps://www.emerald.com/insight/content/doi/10.1108/JFRA-10-2021-0379/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to examine the impact of corporate governance mechanisms on forward-looking corporate social responsibility (CSR) disclosure (FCSRD). The authors use the manual content analysis to measure FCSRD for a sample of 94 companies listed on the Amman Stock Exchange from 2010 to 2016. Data on companies' FCSRD are manually collected from annual reports. The authors also use regression analyses to test the research hypotheses. The authors find that board size positively affects FCSRD, while CEO duality and family ownership negatively impact FCSRD. To the best of the authors’ knowledge, this is the first evidence of how governance mechanisms affect FCSR information in corporate annual reports in a developing country.The impact of corporate governance on forward-looking CSR disclosure
Husam Ananzeh, Hashem Alshurafat, Abdullah Bugshan, Khaled Hussainey
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to examine the impact of corporate governance mechanisms on forward-looking corporate social responsibility (CSR) disclosure (FCSRD).

The authors use the manual content analysis to measure FCSRD for a sample of 94 companies listed on the Amman Stock Exchange from 2010 to 2016. Data on companies' FCSRD are manually collected from annual reports. The authors also use regression analyses to test the research hypotheses.

The authors find that board size positively affects FCSRD, while CEO duality and family ownership negatively impact FCSRD.

To the best of the authors’ knowledge, this is the first evidence of how governance mechanisms affect FCSR information in corporate annual reports in a developing country.

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The impact of corporate governance on forward-looking CSR disclosure10.1108/JFRA-10-2021-0379Journal of Financial Reporting and Accounting2022-03-08© 2022 Emerald Publishing LimitedHusam AnanzehHashem AlshurafatAbdullah BugshanKhaled HussaineyJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-03-0810.1108/JFRA-10-2021-0379https://www.emerald.com/insight/content/doi/10.1108/JFRA-10-2021-0379/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
Political connections, financing decisions and cash holdings: empirical evidence from Gulf Cooperation Councilhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-10-2021-0382/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to investigate the relationship between political connections, financing decisions and cash holding. Based on historical data from 181 active non-financial firms listed on Gulf Cooperation Council (GCC) Stock Exchange Markets during the period of 2009–2016, this study uses ordinary least squares and dynamic system-generalized method of moments to test the research hypotheses. The final data set comprises a total of 1,448 firm-year observations from ten major non-financial industry classifications. This study finds a positive relationship between political connections and each of internal financing proxied by retained earnings ratio and external financing proxied by short- and long-term debt to total asset. The findings also show a positive relationship between political connections and cash holding. The findings of the study provide a better understanding of the role of politically connected directors in financing decisions and cash holding in the GCC. Investors can consider the presence of royal family members in the board of directors when making investment decision. Policymakers are encouraged to develop more effective policies that encourage listed firms to provide information on the political positions of the board of directors, managers and major shareholders/owners of companies. This study contributes to the literature by providing empirical evidence on the relationship between political connections and financing decisions by focusing on the GCC region. This study also highlights that boards in connected firms in the GCC have lower monitoring role owing to political interventions, and that connected firms face higher agency problems as they have weak governance and boards compared with non-connected firms.Political connections, financing decisions and cash holdings: empirical evidence from Gulf Cooperation Council
Omar Ikbal Tawfik, Hamada Elsaid Elmaasrawy, Khaldoon Albitar
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to investigate the relationship between political connections, financing decisions and cash holding.

Based on historical data from 181 active non-financial firms listed on Gulf Cooperation Council (GCC) Stock Exchange Markets during the period of 2009–2016, this study uses ordinary least squares and dynamic system-generalized method of moments to test the research hypotheses. The final data set comprises a total of 1,448 firm-year observations from ten major non-financial industry classifications.

This study finds a positive relationship between political connections and each of internal financing proxied by retained earnings ratio and external financing proxied by short- and long-term debt to total asset. The findings also show a positive relationship between political connections and cash holding.

The findings of the study provide a better understanding of the role of politically connected directors in financing decisions and cash holding in the GCC. Investors can consider the presence of royal family members in the board of directors when making investment decision. Policymakers are encouraged to develop more effective policies that encourage listed firms to provide information on the political positions of the board of directors, managers and major shareholders/owners of companies.

This study contributes to the literature by providing empirical evidence on the relationship between political connections and financing decisions by focusing on the GCC region. This study also highlights that boards in connected firms in the GCC have lower monitoring role owing to political interventions, and that connected firms face higher agency problems as they have weak governance and boards compared with non-connected firms.

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Political connections, financing decisions and cash holdings: empirical evidence from Gulf Cooperation Council10.1108/JFRA-10-2021-0382Journal of Financial Reporting and Accounting2022-06-03© 2022 Emerald Publishing LimitedOmar Ikbal TawfikHamada Elsaid ElmaasrawyKhaldoon AlbitarJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-06-0310.1108/JFRA-10-2021-0382https://www.emerald.com/insight/content/doi/10.1108/JFRA-10-2021-0382/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
Exploring the audit quality and audit fee impacts of joining different types of non-Big Four accounting networks and associations: evidence from Chinahttps://www.emerald.com/insight/content/doi/10.1108/JFRA-10-2022-0359/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to explore the audit quality and fee implications of joining a global accounting firm network and association (“AF N&A”). A hand-collected sample focusing upon the pre- and post-periods around the time when an independent audit firm joins an AF N&A is developed. A propensity score-matched sample is created to address the endogeneity and self-selection bias. OLS regression is used on a sample of around 2,000 firm-year observations from 2003 to 2014. Membership with an AF N&A is associated with higher levels of audit quality and audit fees. Furthermore, audit quality and fee increases are more pronounced for audit firms that become members of a larger, more formal AF N&A. This paper provides additional insights into the conflicting results regarding the audit quality implications of membership with AF N&As in China. This paper also extends the discussion by exploring the audit quality and fee differentials among the non-Big Four AF N&As. These findings have significant implications for independent audit firms pursuing membership with an AF N&A and regulators seeking to reduce market concentration around the Big Four.Exploring the audit quality and audit fee impacts of joining different types of non-Big Four accounting networks and associations: evidence from China
Camillo Lento, Wing Him Yeung
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to explore the audit quality and fee implications of joining a global accounting firm network and association (“AF N&A”).

A hand-collected sample focusing upon the pre- and post-periods around the time when an independent audit firm joins an AF N&A is developed. A propensity score-matched sample is created to address the endogeneity and self-selection bias. OLS regression is used on a sample of around 2,000 firm-year observations from 2003 to 2014.

Membership with an AF N&A is associated with higher levels of audit quality and audit fees. Furthermore, audit quality and fee increases are more pronounced for audit firms that become members of a larger, more formal AF N&A.

This paper provides additional insights into the conflicting results regarding the audit quality implications of membership with AF N&As in China. This paper also extends the discussion by exploring the audit quality and fee differentials among the non-Big Four AF N&As. These findings have significant implications for independent audit firms pursuing membership with an AF N&A and regulators seeking to reduce market concentration around the Big Four.

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Exploring the audit quality and audit fee impacts of joining different types of non-Big Four accounting networks and associations: evidence from China10.1108/JFRA-10-2022-0359Journal of Financial Reporting and Accounting2023-02-20© 2023 Emerald Publishing LimitedCamillo LentoWing Him YeungJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-02-2010.1108/JFRA-10-2022-0359https://www.emerald.com/insight/content/doi/10.1108/JFRA-10-2022-0359/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The impact of corporate social responsibility on financial constraints: the role of insider and institutional ownershiphttps://www.emerald.com/insight/content/doi/10.1108/JFRA-10-2022-0368/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to examine the impact of corporate social responsibility (CSR) on financial constraints (FC). Furthermore, the authors investigate the moderating impact of two key ownership variables, insider and institutional ownership, separately and their interacting effect on the CSR-FC relationship. The study sample consists of 137 nonfinancial Pakistan Stock Exchange listed firms from 2010 to 2019. Firms’ participation in socially responsible activities is measured using a multidimensional financial approach, whereas FC are determined using the WW index. The findings were observed using the dynamic generalized method of moments model. According to the findings, CSR has a negative impact on FC. In terms of moderating impact, the interactive variable of CSR and insider ownership does not affect FC, implying that when an insider owns a majority of shares, the negative relationship between CSR and FC is weaker. The findings demonstrate the entrenchment effect of insider ownership. In terms of the moderating effect of institutional ownership, CSR and institutional ownership have a significant but positive relationship with FC, implying that when powerful institutional investors are present, the negative relationship between CSR and FC disappears, demonstrating that higher institutional ownership leads to shareholder conflicts. Finally, the interactive variable of insider and institutional ownership has no statistically significant effect on the CSR-FC relationship. This insignificant relationship does not support the substitution or complementarity effect of corporate governance. The authors measure CSR activities using a multidimensional financial approach; however, in the future, CSR should be measured using qualitative aspects such as content analysis to strengthen the findings. Because the research is limited to a single emerging economy, Pakistan, the generalizability of the findings is limited. In the future, this research could be replicated in other emerging economies in Asia, Africa and Latin America. The findings of the study will assist regulatory authorities, investors, financial analysts and other stakeholders in better understanding CSR practices in Pakistani firms, as well as the role of CSR and two other important aspects of internal governance mechanisms, namely, insider ownership and institutional ownership, in the CSR-FC relationship. Few studies in the literature investigate the impact of CSR on FC. To the best of the authors’ knowledge, this is the first study of its kind in an emerging market to empirically test this relationship and further investigate the role of insider and institutional ownership in this unexplored relationship.The impact of corporate social responsibility on financial constraints: the role of insider and institutional ownership
Muhammad Farooq, Amna Noor
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to examine the impact of corporate social responsibility (CSR) on financial constraints (FC). Furthermore, the authors investigate the moderating impact of two key ownership variables, insider and institutional ownership, separately and their interacting effect on the CSR-FC relationship.

The study sample consists of 137 nonfinancial Pakistan Stock Exchange listed firms from 2010 to 2019. Firms’ participation in socially responsible activities is measured using a multidimensional financial approach, whereas FC are determined using the WW index. The findings were observed using the dynamic generalized method of moments model.

According to the findings, CSR has a negative impact on FC. In terms of moderating impact, the interactive variable of CSR and insider ownership does not affect FC, implying that when an insider owns a majority of shares, the negative relationship between CSR and FC is weaker. The findings demonstrate the entrenchment effect of insider ownership. In terms of the moderating effect of institutional ownership, CSR and institutional ownership have a significant but positive relationship with FC, implying that when powerful institutional investors are present, the negative relationship between CSR and FC disappears, demonstrating that higher institutional ownership leads to shareholder conflicts. Finally, the interactive variable of insider and institutional ownership has no statistically significant effect on the CSR-FC relationship. This insignificant relationship does not support the substitution or complementarity effect of corporate governance.

The authors measure CSR activities using a multidimensional financial approach; however, in the future, CSR should be measured using qualitative aspects such as content analysis to strengthen the findings. Because the research is limited to a single emerging economy, Pakistan, the generalizability of the findings is limited. In the future, this research could be replicated in other emerging economies in Asia, Africa and Latin America.

The findings of the study will assist regulatory authorities, investors, financial analysts and other stakeholders in better understanding CSR practices in Pakistani firms, as well as the role of CSR and two other important aspects of internal governance mechanisms, namely, insider ownership and institutional ownership, in the CSR-FC relationship.

Few studies in the literature investigate the impact of CSR on FC. To the best of the authors’ knowledge, this is the first study of its kind in an emerging market to empirically test this relationship and further investigate the role of insider and institutional ownership in this unexplored relationship.

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The impact of corporate social responsibility on financial constraints: the role of insider and institutional ownership10.1108/JFRA-10-2022-0368Journal of Financial Reporting and Accounting2023-04-07© 2023 Emerald Publishing LimitedMuhammad FarooqAmna NoorJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-04-0710.1108/JFRA-10-2022-0368https://www.emerald.com/insight/content/doi/10.1108/JFRA-10-2022-0368/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Audit partner industry specialization and audit report lag: does changing in the audit reporting requirements matter?https://www.emerald.com/insight/content/doi/10.1108/JFRA-10-2022-0377/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to examine the relationship between the individual auditor’s industry specialization and the audit report lag (hereafter ARD). Further, it explores whether changing in the audit reporting requirement (i.e. the adoption of ISA701) influences the auditor’s industry specialization effect on the ARD. A large data set of companies listed on the NASDAQ OMX Stockholm over the period 2010–2019 has been analyzed. Least squares regressions have been estimated to provide empirical evidence for the researched hypotheses. The research findings indicate that the ARD is shorter for client firms audited by an industry specialist audit partner. Testing for the moderating role of changing in the auditing reporting regulation on the relation between the audit partner’s industry specialization and the ARD, the authors reveal that all client firms (except client firms with industry specialist audit partners) experienced an increase in the ARD. Overall, the baseline regression findings are found to be robust to the endogenous auditor choice and multiple measures of both the ARD and the auditor’s industry specialization. This paper provides novel evidence on the relationship between the audit reporting lag and industry specialization from the individual auditor perspective, an issue that has hitherto been unexplored. The regression results further contribute to the upsurge debate about the consequences of changing in the audit reporting model by providing consistent support for the importance of industry specialization of the audit partner in minimizing costs derived from the former requirement.Audit partner industry specialization and audit report lag: does changing in the audit reporting requirements matter?
Yosra Mnif, Imen Cherif
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to examine the relationship between the individual auditor’s industry specialization and the audit report lag (hereafter ARD). Further, it explores whether changing in the audit reporting requirement (i.e. the adoption of ISA701) influences the auditor’s industry specialization effect on the ARD.

A large data set of companies listed on the NASDAQ OMX Stockholm over the period 2010–2019 has been analyzed. Least squares regressions have been estimated to provide empirical evidence for the researched hypotheses.

The research findings indicate that the ARD is shorter for client firms audited by an industry specialist audit partner. Testing for the moderating role of changing in the auditing reporting regulation on the relation between the audit partner’s industry specialization and the ARD, the authors reveal that all client firms (except client firms with industry specialist audit partners) experienced an increase in the ARD. Overall, the baseline regression findings are found to be robust to the endogenous auditor choice and multiple measures of both the ARD and the auditor’s industry specialization.

This paper provides novel evidence on the relationship between the audit reporting lag and industry specialization from the individual auditor perspective, an issue that has hitherto been unexplored. The regression results further contribute to the upsurge debate about the consequences of changing in the audit reporting model by providing consistent support for the importance of industry specialization of the audit partner in minimizing costs derived from the former requirement.

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Audit partner industry specialization and audit report lag: does changing in the audit reporting requirements matter?10.1108/JFRA-10-2022-0377Journal of Financial Reporting and Accounting2023-06-13© 2023 Emerald Publishing LimitedYosra MnifImen CherifJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-06-1310.1108/JFRA-10-2022-0377https://www.emerald.com/insight/content/doi/10.1108/JFRA-10-2022-0377/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Business model (BM) diagram in integrated reports, a graphic or an infographic? A study in the Indian contexthttps://www.emerald.com/insight/content/doi/10.1108/JFRA-10-2022-0380/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to study the efficacy of the business model (BM) diagram in the companies’ integrated reports. Diagrams and graphics are an effective way of communicating the complex processes of a business. However, these diagrams should have complete and appropriate content in a gist for easy understanding. A study of BM diagrams published in the integrated reports of 65 Indian listed companies was carried out. The contents of these diagrams were compared to the requirement of BM as per the international <IR> framework. While companies presented the BM diagram, there seemed to be a lack of clarity in the definitions of input, output and outcome capitals. Measurable metrics that give a clear understanding regarding the use and generation of resources were missing. The diagram was presented with some information because it had to be, but the purpose of the BM, which is the core of <IR>, was not conveyed. Also, the diagram did not display value creation or erosion effectively. To the best of the author’s knowledge, this is one of the first studies on the BM diagram in the <IR> space. It emphasises that the diagram can capture the value-creation aspect of the <IR>. Thus, the BM diagram can be used as an effective and concise communication tool for the users of this report.Business model (BM) diagram in integrated reports, a graphic or an infographic? A study in the Indian context
Sapna Malya
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to study the efficacy of the business model (BM) diagram in the companies’ integrated reports. Diagrams and graphics are an effective way of communicating the complex processes of a business. However, these diagrams should have complete and appropriate content in a gist for easy understanding.

A study of BM diagrams published in the integrated reports of 65 Indian listed companies was carried out. The contents of these diagrams were compared to the requirement of BM as per the international <IR> framework.

While companies presented the BM diagram, there seemed to be a lack of clarity in the definitions of input, output and outcome capitals. Measurable metrics that give a clear understanding regarding the use and generation of resources were missing. The diagram was presented with some information because it had to be, but the purpose of the BM, which is the core of <IR>, was not conveyed. Also, the diagram did not display value creation or erosion effectively.

To the best of the author’s knowledge, this is one of the first studies on the BM diagram in the <IR> space. It emphasises that the diagram can capture the value-creation aspect of the <IR>. Thus, the BM diagram can be used as an effective and concise communication tool for the users of this report.

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Business model (BM) diagram in integrated reports, a graphic or an infographic? A study in the Indian context10.1108/JFRA-10-2022-0380Journal of Financial Reporting and Accounting2023-08-15© 2023 Emerald Publishing LimitedSapna MalyaJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-08-1510.1108/JFRA-10-2022-0380https://www.emerald.com/insight/content/doi/10.1108/JFRA-10-2022-0380/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
CEO masculine behavior and earnings management: does ethnicity matter?https://www.emerald.com/insight/content/doi/10.1108/JFRA-10-2022-0383/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to investigate the relationship between the Chief Executive Officers (CEOs’) masculinity, CEO characteristics (accounting background, turnover and ethnicity/race) and earnings management (EM) in Malaysia. It also examined the moderating effect of the CEOs’ ethnicity/race (Bumiputera and non-Bumiputera) on the relationship between CEO masculinity and EM. The analyses were based on a panel data set of 260 corporates listed on the Bursa Malaysia from 2009 to 2019. Python/code was used to calculate the facial width-to-height ratio (fWHR), while testosterone (TESTN) was calculated based on CEO age and fWHR. To estimate the results, panel data analysis with a fixed effect model was used. The result shows that fWHR and TESTN have a significant positive effect on EM. CEO race has a significant impact on EM, implying that non-Bumiputera CEOs are more likely to be associated with EM. There was no statistically significant evidence that race moderates the relationship between CEO masculinity and EM. The research contributes to the growing evidence in the field of neuroscience that it is possible to infer aspects of an individual’s behavior based on their facial structure and their TESTN levels. The findings provide new evidence supporting Malaysian Government policies in reducing masculinity on boards of directors and senior executive positions, which will positively affect the integrity of financial reports. To the best of the authors’ knowledge, it is the first research to explain whether the ethnicity/race of CEOs is related to EM and whether it has a significant moderate effect on the relationship between masculinity and EM.CEO masculine behavior and earnings management: does ethnicity matter?
Tamer Elsheikh, Hafiza Aishah Hashim, Nor Raihan Mohamad, Mayada Abd El-Aziz Youssef, Faozi A. Almaqtari
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to investigate the relationship between the Chief Executive Officers (CEOs’) masculinity, CEO characteristics (accounting background, turnover and ethnicity/race) and earnings management (EM) in Malaysia. It also examined the moderating effect of the CEOs’ ethnicity/race (Bumiputera and non-Bumiputera) on the relationship between CEO masculinity and EM.

The analyses were based on a panel data set of 260 corporates listed on the Bursa Malaysia from 2009 to 2019. Python/code was used to calculate the facial width-to-height ratio (fWHR), while testosterone (TESTN) was calculated based on CEO age and fWHR. To estimate the results, panel data analysis with a fixed effect model was used.

The result shows that fWHR and TESTN have a significant positive effect on EM. CEO race has a significant impact on EM, implying that non-Bumiputera CEOs are more likely to be associated with EM. There was no statistically significant evidence that race moderates the relationship between CEO masculinity and EM.

The research contributes to the growing evidence in the field of neuroscience that it is possible to infer aspects of an individual’s behavior based on their facial structure and their TESTN levels. The findings provide new evidence supporting Malaysian Government policies in reducing masculinity on boards of directors and senior executive positions, which will positively affect the integrity of financial reports.

To the best of the authors’ knowledge, it is the first research to explain whether the ethnicity/race of CEOs is related to EM and whether it has a significant moderate effect on the relationship between masculinity and EM.

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CEO masculine behavior and earnings management: does ethnicity matter?10.1108/JFRA-10-2022-0383Journal of Financial Reporting and Accounting2023-02-17© 2023 Emerald Publishing LimitedTamer ElsheikhHafiza Aishah HashimNor Raihan MohamadMayada Abd El-Aziz YoussefFaozi A. AlmaqtariJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-02-1710.1108/JFRA-10-2022-0383https://www.emerald.com/insight/content/doi/10.1108/JFRA-10-2022-0383/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Applying Benford’s law to examine earnings management: evidence from emerging ASEAN-5 countrieshttps://www.emerald.com/insight/content/doi/10.1108/JFRA-10-2022-0390/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to apply Benford’s law to examine the earnings management of companies listed in emerging ASEAN-5 countries: Indonesia, Malaysia, Philippines, Thailand and Vietnam. The authors follow Amiram et al. (2015) to measure deviations from Benford’s law of the first digits of numbers reported in financial statements. The authors use the Jones-modified performance-match model (Jones, 1991; Dechow et al., 1995; Kothari et al., 2005) to estimate accrual earnings management. The authors use a sample of 47,389 observations of listed companies in ASEAN-5 countries from 2006 to 2019. The authors also run ordinary least squares (OLS) regressions to test the hypotheses. The authors find that the first digits of numbers reported in the financial statements of companies in the sample closely conform to Benford’s law. Further evidence shows that the deviation from Benford’s law is positively related to abnormal accruals. The relationship between deviation from Benford’s law and abnormal accruals is more pronounced for the post-international financial reporting standards adoption period. The results survive for some robustness checks. The authors show that Benford’s law holds for financial statements of companies listed in the emerging ASEAN-5 countries. Auditors could use Benford’s law as an analytical procedure to assess the risks of material misstatements. Also, other users could apply Benford’s law on audited financial statements to foresee undetected misstatements. The authors provide original evidence that financial statements of ASEAN-5 countries follow Benford’s law. The evidence supports the usefulness of Benford’s law in developing markets.Applying Benford’s law to examine earnings management: evidence from emerging ASEAN-5 countries
Loan Hoang To Nguyen, Tri Tri Nguyen, Thanh Vu Ngoc Le, Nghia Duc Mai
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to apply Benford’s law to examine the earnings management of companies listed in emerging ASEAN-5 countries: Indonesia, Malaysia, Philippines, Thailand and Vietnam.

The authors follow Amiram et al. (2015) to measure deviations from Benford’s law of the first digits of numbers reported in financial statements. The authors use the Jones-modified performance-match model (Jones, 1991; Dechow et al., 1995; Kothari et al., 2005) to estimate accrual earnings management. The authors use a sample of 47,389 observations of listed companies in ASEAN-5 countries from 2006 to 2019. The authors also run ordinary least squares (OLS) regressions to test the hypotheses.

The authors find that the first digits of numbers reported in the financial statements of companies in the sample closely conform to Benford’s law. Further evidence shows that the deviation from Benford’s law is positively related to abnormal accruals. The relationship between deviation from Benford’s law and abnormal accruals is more pronounced for the post-international financial reporting standards adoption period. The results survive for some robustness checks.

The authors show that Benford’s law holds for financial statements of companies listed in the emerging ASEAN-5 countries.

Auditors could use Benford’s law as an analytical procedure to assess the risks of material misstatements. Also, other users could apply Benford’s law on audited financial statements to foresee undetected misstatements.

The authors provide original evidence that financial statements of ASEAN-5 countries follow Benford’s law. The evidence supports the usefulness of Benford’s law in developing markets.

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Applying Benford’s law to examine earnings management: evidence from emerging ASEAN-5 countries10.1108/JFRA-10-2022-0390Journal of Financial Reporting and Accounting2023-08-30© 2023 Emerald Publishing LimitedLoan Hoang To NguyenTri Tri NguyenThanh Vu Ngoc LeNghia Duc MaiJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-08-3010.1108/JFRA-10-2022-0390https://www.emerald.com/insight/content/doi/10.1108/JFRA-10-2022-0390/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Earnings management, institutional ownership and investment efficiency: evidence from a developing countryhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-10-2022-0392/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study investigates the effect of earnings management (EM) and institutional ownership (IO) on investment efficiency (IE). It also investigates the effect of IO, as a governance mechanism, on the relation between EM and IE. This study examines a sample of Egyptian firms listed on EGX100 during the period 2014–2019. The data are collected manually from firms’ annual reports and governance reports obtained from Egypt for Information Dissemination Company. We depend on the t-test, Pearson correlation, and OLS regression to test our hypotheses. The results revealed a negative relationship between EM and IE. In contrast, IO has a significant and positive effect on IE. The results also show that IO mitigates the negative implications of EM for IE. Additionally, we find robust evidence for the governance role of pressure-insensitive IO, as it has a positive effect on IE and on mitigating the negative effects of EM on IE. To our knowledge, this is the first study to examine the effect of IO as a governance mechanism on the relationship between EM and IE. The results of this study can be of interest to investors, regulators, and policy-makers due to highlighting the potential implications of EM and IO for firms’ investment decisions in Egypt–one of the important emerging markets in the Middle East and Africa.Earnings management, institutional ownership and investment efficiency: evidence from a developing country
Aref M. Eissa, Tamer Elgendy, Ahmed Diab
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study investigates the effect of earnings management (EM) and institutional ownership (IO) on investment efficiency (IE). It also investigates the effect of IO, as a governance mechanism, on the relation between EM and IE.

This study examines a sample of Egyptian firms listed on EGX100 during the period 2014–2019. The data are collected manually from firms’ annual reports and governance reports obtained from Egypt for Information Dissemination Company. We depend on the t-test, Pearson correlation, and OLS regression to test our hypotheses.

The results revealed a negative relationship between EM and IE. In contrast, IO has a significant and positive effect on IE. The results also show that IO mitigates the negative implications of EM for IE. Additionally, we find robust evidence for the governance role of pressure-insensitive IO, as it has a positive effect on IE and on mitigating the negative effects of EM on IE.

To our knowledge, this is the first study to examine the effect of IO as a governance mechanism on the relationship between EM and IE. The results of this study can be of interest to investors, regulators, and policy-makers due to highlighting the potential implications of EM and IO for firms’ investment decisions in Egypt–one of the important emerging markets in the Middle East and Africa.

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Earnings management, institutional ownership and investment efficiency: evidence from a developing country10.1108/JFRA-10-2022-0392Journal of Financial Reporting and Accounting2023-02-09© 2023 Emerald Publishing LimitedAref M. EissaTamer ElgendyAhmed DiabJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-02-0910.1108/JFRA-10-2022-0392https://www.emerald.com/insight/content/doi/10.1108/JFRA-10-2022-0392/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Sustainable performance, conditional conservatism and audit feeshttps://www.emerald.com/insight/content/doi/10.1108/JFRA-10-2022-0396/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to examine the effect of conditional conservatism on audit fees and whether the firm’s engagement in sustainable practices moderates the relationship between conditional conservatism and audit fees. Using a sample of 3,767 firm-year observations from 14 European Union countries over the period of 2006–2019, the authors adopt the ordinary least square estimator to perform a panel data analysis of the effect of conditional conservatism on audit fees, and the moderating role of the environmental, social and governance (ESG) scores on the relationship between conditional conservatism and audit fees. The authors find that conditional conservatism has a significant negative effect on audit fees, suggesting that auditors charge lower audit fees on more conservative clients. The authors also find that firms engaging in ESG actions, whether combined or individual, pay higher audit fees. More interestingly, the authors provide evidence that the negative effect of conditional conservatism on audit fees is mitigated only when ESG performance is considered in combination. This implies that firms exhibiting less commitment to ESG sustainability practices are prone to paying reduced audit fees when engaged in more conservative reporting. The findings remain robust after conducting a battery of tests. The findings of this study have practical implications for several parties, including companies, auditors and regulators. This study emphasizes the potential benefit associated with using conservative accounting practices in terms of shaping downward the amount of audit fees. However, it also highlights the importance of considering the additional audit costs associated with higher ESG scores when making decisions about implementing sustainable practices. Unlike prior studies that investigate the direct impact of sustainable practices on audit fees, the present work contributes to the literature on the benefits and costs of ESG by examining the moderating role of ESG performance in the association between audit fees and conditional conservatism. To the best of the authors’ knowledge, this study is the first to examine this relationship. Theoretically, the research integrates the theories of audit risk and agency to provide a more comprehensive understanding of the drivers of audit fees.Sustainable performance, conditional conservatism and audit fees
Ines Kammoun, Walid Khoufi
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to examine the effect of conditional conservatism on audit fees and whether the firm’s engagement in sustainable practices moderates the relationship between conditional conservatism and audit fees.

Using a sample of 3,767 firm-year observations from 14 European Union countries over the period of 2006–2019, the authors adopt the ordinary least square estimator to perform a panel data analysis of the effect of conditional conservatism on audit fees, and the moderating role of the environmental, social and governance (ESG) scores on the relationship between conditional conservatism and audit fees.

The authors find that conditional conservatism has a significant negative effect on audit fees, suggesting that auditors charge lower audit fees on more conservative clients. The authors also find that firms engaging in ESG actions, whether combined or individual, pay higher audit fees. More interestingly, the authors provide evidence that the negative effect of conditional conservatism on audit fees is mitigated only when ESG performance is considered in combination. This implies that firms exhibiting less commitment to ESG sustainability practices are prone to paying reduced audit fees when engaged in more conservative reporting. The findings remain robust after conducting a battery of tests.

The findings of this study have practical implications for several parties, including companies, auditors and regulators. This study emphasizes the potential benefit associated with using conservative accounting practices in terms of shaping downward the amount of audit fees. However, it also highlights the importance of considering the additional audit costs associated with higher ESG scores when making decisions about implementing sustainable practices.

Unlike prior studies that investigate the direct impact of sustainable practices on audit fees, the present work contributes to the literature on the benefits and costs of ESG by examining the moderating role of ESG performance in the association between audit fees and conditional conservatism. To the best of the authors’ knowledge, this study is the first to examine this relationship. Theoretically, the research integrates the theories of audit risk and agency to provide a more comprehensive understanding of the drivers of audit fees.

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Sustainable performance, conditional conservatism and audit fees10.1108/JFRA-10-2022-0396Journal of Financial Reporting and Accounting2023-09-26© 2023 Emerald Publishing LimitedInes KammounWalid KhoufiJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-09-2610.1108/JFRA-10-2022-0396https://www.emerald.com/insight/content/doi/10.1108/JFRA-10-2022-0396/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Non-GAAP reporting and capital markets: contrasting France and Canadahttps://www.emerald.com/insight/content/doi/10.1108/JFRA-11-2021-0383/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to assess if the voluntary reporting of adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), a widely used non-generally accepted accounting principles (GAAP) measure, has effects on information asymmetry and value relevance and how the adjustments to GAAP earnings made to derive it contribute to these effects. This study focuses on firms from two countries with contrasting institutional settings, Canada and France. Relying on multivariate analyses and using Heckman’s procedure to address the sample self-selection issue, this study first estimates the likelihood of a firm to report adjusted EBITDA. Then, this study examines if adjusted EBITDA, as well as the adjustments made to GAAP earnings to derive adjusted EBITDA (adjustments), affect a firm’s information asymmetry and its value. These adjustments are essentially GAAP-grounded items that are discarded by management to derive non-GAAP adjusted EBITDA. The dependent variables are share price volatility, as a proxy for information asymmetry, alongside market-to-book and stock market return as indicators of value. In terms of the used sample, results suggest that Canadian firms are much more likely to report adjusted EBITDA than French firms. Chief executive officer (CEO) attributes (CEO power) appears to increase such likelihood. Moreover, for both Canadian and French firms, adjusted EBITDA is associated with reduced stock market volatility, an indication of lower information asymmetry, as well as higher market-to-book and returns, suggesting value relevance. The results also indicate that investors view the adjustments to GAAP earnings made by management to derive adjusted EBITDA as not value relevant (similar to noise). The GAAP-grounded elements that management discard to derive adjusted EBITDA actually increase information asymmetry. This study adds to prior research on the interface between a CEO attributes and governance and non-GAAP reporting. This study also provides evidence that, despite very different institutional settings, non-GAAP reporting conveys relevant information to capital markets’ participants in both France and Canada. Hence, a country’s institutional setting may have a differential impact on the disclosure choice but not on the resulting value relevance of such disclosure. Finally, this study extends the non-GAAP literature by examining the value relevance of a widely used yet under-researched measure, adjusted EBITDA.Non-GAAP reporting and capital markets: contrasting France and Canada
Denis Cormier, Samira Demaria, Michel Magnan
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to assess if the voluntary reporting of adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), a widely used non-generally accepted accounting principles (GAAP) measure, has effects on information asymmetry and value relevance and how the adjustments to GAAP earnings made to derive it contribute to these effects. This study focuses on firms from two countries with contrasting institutional settings, Canada and France.

Relying on multivariate analyses and using Heckman’s procedure to address the sample self-selection issue, this study first estimates the likelihood of a firm to report adjusted EBITDA. Then, this study examines if adjusted EBITDA, as well as the adjustments made to GAAP earnings to derive adjusted EBITDA (adjustments), affect a firm’s information asymmetry and its value. These adjustments are essentially GAAP-grounded items that are discarded by management to derive non-GAAP adjusted EBITDA. The dependent variables are share price volatility, as a proxy for information asymmetry, alongside market-to-book and stock market return as indicators of value.

In terms of the used sample, results suggest that Canadian firms are much more likely to report adjusted EBITDA than French firms. Chief executive officer (CEO) attributes (CEO power) appears to increase such likelihood. Moreover, for both Canadian and French firms, adjusted EBITDA is associated with reduced stock market volatility, an indication of lower information asymmetry, as well as higher market-to-book and returns, suggesting value relevance. The results also indicate that investors view the adjustments to GAAP earnings made by management to derive adjusted EBITDA as not value relevant (similar to noise). The GAAP-grounded elements that management discard to derive adjusted EBITDA actually increase information asymmetry.

This study adds to prior research on the interface between a CEO attributes and governance and non-GAAP reporting. This study also provides evidence that, despite very different institutional settings, non-GAAP reporting conveys relevant information to capital markets’ participants in both France and Canada. Hence, a country’s institutional setting may have a differential impact on the disclosure choice but not on the resulting value relevance of such disclosure. Finally, this study extends the non-GAAP literature by examining the value relevance of a widely used yet under-researched measure, adjusted EBITDA.

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Non-GAAP reporting and capital markets: contrasting France and Canada10.1108/JFRA-11-2021-0383Journal of Financial Reporting and Accounting2022-06-07© 2022 Emerald Publishing LimitedDenis CormierSamira DemariaMichel MagnanJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-06-0710.1108/JFRA-11-2021-0383https://www.emerald.com/insight/content/doi/10.1108/JFRA-11-2021-0383/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
Does media exposure and media legitimacy moderate the relationship between environmental audit committee and environmental disclosure quality?https://www.emerald.com/insight/content/doi/10.1108/JFRA-11-2021-0403/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to examine the moderating effect of media exposure and media legitimacy on the environmental audit committee (EAC) regarding environmental disclosure quality as measured by voluntary and timely disclosure. This paper was based on a sample of 81 French nonfinancial companies listed on the SBF 120 index and covered a six-year period; from 2014 to 2019. To test the hypotheses, a feasible generalized least squares regression was applied. Moreover, the authors checked the results using an additional analysis and the generalized method of moment model for endogeneity problems. The results obtained show that for 482 French firm-year observations during the period 2014–2019, the media exposure does not play a moderating role between the EAC and the voluntary environmental disclosure; However, it plays a moderating role between the EAC and the timely environmental disclosure. The results also show that media legitimacy plays a moderating role between the EAC and the quality of environmental information. After testing for endogeneity problems, the findings remain unchanged. The findings of this study may be of interest to academic researchers, practitioners and regulators who are interested in determining the quality of environmental disclosure by considering the role of the EAC while giving a role to media exposure and media legitimacy in the French context. Considering the EAC as a powerful source of effective corporate governance to improve the quality of environmental disclosure for decision-making, the research provides valuable insights for policymakers and managers on the importance of this mechanism and the importance of the environmental media and its tone in making environmental reporting useful and relevant. The originality of the work lies in the fact that it is one of the first works that deal with the moderating effect of media exposure on the relationship between the EAC and the quality of environmental information disclosure measured by voluntary and timely disclosure. To the best of the authors’ knowledge, no previous empirical studies have been conducted on this relationship in the French context or in other contexts.Does media exposure and media legitimacy moderate the relationship between environmental audit committee and environmental disclosure quality?
Anis Jarboui, Marwa Moalla
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to examine the moderating effect of media exposure and media legitimacy on the environmental audit committee (EAC) regarding environmental disclosure quality as measured by voluntary and timely disclosure.

This paper was based on a sample of 81 French nonfinancial companies listed on the SBF 120 index and covered a six-year period; from 2014 to 2019. To test the hypotheses, a feasible generalized least squares regression was applied. Moreover, the authors checked the results using an additional analysis and the generalized method of moment model for endogeneity problems.

The results obtained show that for 482 French firm-year observations during the period 2014–2019, the media exposure does not play a moderating role between the EAC and the voluntary environmental disclosure; However, it plays a moderating role between the EAC and the timely environmental disclosure. The results also show that media legitimacy plays a moderating role between the EAC and the quality of environmental information. After testing for endogeneity problems, the findings remain unchanged.

The findings of this study may be of interest to academic researchers, practitioners and regulators who are interested in determining the quality of environmental disclosure by considering the role of the EAC while giving a role to media exposure and media legitimacy in the French context. Considering the EAC as a powerful source of effective corporate governance to improve the quality of environmental disclosure for decision-making, the research provides valuable insights for policymakers and managers on the importance of this mechanism and the importance of the environmental media and its tone in making environmental reporting useful and relevant.

The originality of the work lies in the fact that it is one of the first works that deal with the moderating effect of media exposure on the relationship between the EAC and the quality of environmental information disclosure measured by voluntary and timely disclosure. To the best of the authors’ knowledge, no previous empirical studies have been conducted on this relationship in the French context or in other contexts.

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Does media exposure and media legitimacy moderate the relationship between environmental audit committee and environmental disclosure quality?10.1108/JFRA-11-2021-0403Journal of Financial Reporting and Accounting2022-08-31© 2022 Emerald Publishing LimitedAnis JarbouiMarwa MoallaJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-08-3110.1108/JFRA-11-2021-0403https://www.emerald.com/insight/content/doi/10.1108/JFRA-11-2021-0403/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
Agency costs and auditor choice: moderating role of board’s expertise and internal controlhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-11-2021-0406/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to examine the effects of agency cost on auditor choice. This paper also deals with the moderating role of the board’s financial expertise (Bfe) and the status of the internal control (Intecon) system on the relationship between agency cost and auditor selection. This study’s sample consists of 1,040 firm-year observations of Iranian nonfinancial companies listed on the Tehran Stock Exchange from 2012 to 2019. The information required for this research is mainly extracted from Comprehensive Database of All Listed Companies (in Iran Stock Exchange). Data from 130 companies were obtained during the research period. This study used logistic regression to test the hypotheses. The findings indicate that companies with higher agency costs choose the auditor from lower classes. As the proportion of financial expert members on the board increases, the intensity of this relationship will be reduced. Companies with higher agency costs choose the auditor from the lower classes, but the higher the ratio of financial expert board members, the more these companies will choose high-quality auditors. However, findings showed that the status of the Intecon system has no moderating effect on the relationship between agency costs and auditor selection. The results of this study can expand the existing literature on the relationship between auditor selection and agency costs and the factors affecting this relationship, especially the Bfe and Intecon. This research has significant suggestions for regulators, stakeholders, shareholders and analysts in emerging economies that may encounter similar contextual implications.Agency costs and auditor choice: moderating role of board’s expertise and internal control
Parisa Saadat Behbahaninia
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to examine the effects of agency cost on auditor choice. This paper also deals with the moderating role of the board’s financial expertise (Bfe) and the status of the internal control (Intecon) system on the relationship between agency cost and auditor selection.

This study’s sample consists of 1,040 firm-year observations of Iranian nonfinancial companies listed on the Tehran Stock Exchange from 2012 to 2019. The information required for this research is mainly extracted from Comprehensive Database of All Listed Companies (in Iran Stock Exchange). Data from 130 companies were obtained during the research period. This study used logistic regression to test the hypotheses.

The findings indicate that companies with higher agency costs choose the auditor from lower classes. As the proportion of financial expert members on the board increases, the intensity of this relationship will be reduced. Companies with higher agency costs choose the auditor from the lower classes, but the higher the ratio of financial expert board members, the more these companies will choose high-quality auditors. However, findings showed that the status of the Intecon system has no moderating effect on the relationship between agency costs and auditor selection.

The results of this study can expand the existing literature on the relationship between auditor selection and agency costs and the factors affecting this relationship, especially the Bfe and Intecon. This research has significant suggestions for regulators, stakeholders, shareholders and analysts in emerging economies that may encounter similar contextual implications.

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Agency costs and auditor choice: moderating role of board’s expertise and internal control10.1108/JFRA-11-2021-0406Journal of Financial Reporting and Accounting2022-06-08© 2022 Emerald Publishing LimitedParisa Saadat BehbahaniniaJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-06-0810.1108/JFRA-11-2021-0406https://www.emerald.com/insight/content/doi/10.1108/JFRA-11-2021-0406/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
Impact of corporate governance on corporate social responsibility disclosure of the UAE listed bankshttps://www.emerald.com/insight/content/doi/10.1108/JFRA-11-2021-0424/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to investigate the extent and trend of corporate social responsibility (CSR) disclosure by UAE listed banks and the impact of corporate governance mechanisms on this disclosure. Content analysis of banks’ annual reports from 2009 to 2019 was applied to investigate the CSR disclosure level by constructing a disclosure index. Panel data regressions were applied to analyze the impact of corporate governance mechanisms on CSR disclosure. UAE banks show an improving trend in the CSR disclosures. In addition, the board of directors and ownership structure are significantly and positively associated with the CSR disclosures. The results vary across the banking systems. This study considers the extent of the CSR disclosure in UAE banks’ annual reports, and future research should consider more industries and communication channels. This study sheds light on the extent of the CSR disclosure of UAE listed banks and assists UAE policymakers in implementing appropriate corporate governance mechanisms. The findings provide banks with a better understanding of the benefits of strengthening corporate governance to improve their CSR disclosure. This study contributes to the literature by constructing a more comprehensive disclosure index and examining the impact of corporate governance mechanisms on CSR disclosure by considering both the conventional and Islamic banking systems.Impact of corporate governance on corporate social responsibility disclosure of the UAE listed banks
Fatima Al Maeeni, Nejla Ould Daoud Ellili, Haitham Nobanee
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to investigate the extent and trend of corporate social responsibility (CSR) disclosure by UAE listed banks and the impact of corporate governance mechanisms on this disclosure.

Content analysis of banks’ annual reports from 2009 to 2019 was applied to investigate the CSR disclosure level by constructing a disclosure index. Panel data regressions were applied to analyze the impact of corporate governance mechanisms on CSR disclosure.

UAE banks show an improving trend in the CSR disclosures. In addition, the board of directors and ownership structure are significantly and positively associated with the CSR disclosures. The results vary across the banking systems.

This study considers the extent of the CSR disclosure in UAE banks’ annual reports, and future research should consider more industries and communication channels.

This study sheds light on the extent of the CSR disclosure of UAE listed banks and assists UAE policymakers in implementing appropriate corporate governance mechanisms.

The findings provide banks with a better understanding of the benefits of strengthening corporate governance to improve their CSR disclosure.

This study contributes to the literature by constructing a more comprehensive disclosure index and examining the impact of corporate governance mechanisms on CSR disclosure by considering both the conventional and Islamic banking systems.

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Impact of corporate governance on corporate social responsibility disclosure of the UAE listed banks10.1108/JFRA-11-2021-0424Journal of Financial Reporting and Accounting2022-04-18© 2022 Emerald Publishing LimitedFatima Al MaeeniNejla Ould Daoud ElliliHaitham NobaneeJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-04-1810.1108/JFRA-11-2021-0424https://www.emerald.com/insight/content/doi/10.1108/JFRA-11-2021-0424/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
Fair value accounting and the cost of corporate bonds: the role of auditor expertisehttps://www.emerald.com/insight/content/doi/10.1108/JFRA-11-2022-0398/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to examine the association between fair value accounting and the cost of corporate bonds, proxied by bond yield spread. In addition, this study explores the moderating role of auditor industry expertise at both the national and the city levels. This study first examines the effect of the use of fair value on yield spread by estimating firm-level regression model, where fair value is the testing variable and yield spread is the dependent variable. To test the differential impact of the three levels of fair value inputs, this paper divides the fair value measures based on the three-level hierarchy, Level 1, Level 2 and Level 3, and replace them as the test variables in the regression model. This study finds that the application of fair value accounting is generally associated with a higher bond yield spread, primarily driven by Level 3 estimates. The results also show that national-level auditor industry expertise is associated with lower bond yield spreads for Level 1 and Level 3 fair value inputs, whereas the impact of city-level auditor industry expertise on bondholders is mainly on Level 3 fair value inputs. The paper innovates by exploring the impact of fair value accounting in a setting that extends beyond financial institutions, the traditional area of focus. Moreover, most prior research considers private debt, whereas this study examines public bonds, for which investors are more likely to rely on financial reporting for their information about a firm. Finally, the study differentiates between city- and national-level industry expertise in examining the role of auditors. This research has several practical implications. First, firms seeking to raise debt capital should consider involving auditors, with either industry expertise or fair value expertise, due to the roles that auditors play in safeguarding the reliability of fair value measures, particularly for Level 3 measurements. Second, from standard-setting and regulatory perspectives, the study’s findings that fair value accounting is associated with higher bond yield spread cast further doubt on the net benefits of applying a full fair value accounting regime. Third, PCAOB may consider enhancing guidance to auditors on Level 2 fair value inputs, to further enhance audit quality. Finally, creditors can be more cautious in interpretating accounting information based on fair value while viewing the employment of auditor experts as a positive signal. First, the paper extends research on the role of accounting information in public debt contracting. Second, this study adds to the auditing literature about the impact of industry expertise. Finally, and more generally, this study adds to the ongoing controversy on the application of fair value accounting.Fair value accounting and the cost of corporate bonds: the role of auditor expertise
Michel Magnan, Haiping Wang, Yaqi Shi
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to examine the association between fair value accounting and the cost of corporate bonds, proxied by bond yield spread. In addition, this study explores the moderating role of auditor industry expertise at both the national and the city levels.

This study first examines the effect of the use of fair value on yield spread by estimating firm-level regression model, where fair value is the testing variable and yield spread is the dependent variable. To test the differential impact of the three levels of fair value inputs, this paper divides the fair value measures based on the three-level hierarchy, Level 1, Level 2 and Level 3, and replace them as the test variables in the regression model.

This study finds that the application of fair value accounting is generally associated with a higher bond yield spread, primarily driven by Level 3 estimates. The results also show that national-level auditor industry expertise is associated with lower bond yield spreads for Level 1 and Level 3 fair value inputs, whereas the impact of city-level auditor industry expertise on bondholders is mainly on Level 3 fair value inputs.

The paper innovates by exploring the impact of fair value accounting in a setting that extends beyond financial institutions, the traditional area of focus. Moreover, most prior research considers private debt, whereas this study examines public bonds, for which investors are more likely to rely on financial reporting for their information about a firm. Finally, the study differentiates between city- and national-level industry expertise in examining the role of auditors.

This research has several practical implications. First, firms seeking to raise debt capital should consider involving auditors, with either industry expertise or fair value expertise, due to the roles that auditors play in safeguarding the reliability of fair value measures, particularly for Level 3 measurements. Second, from standard-setting and regulatory perspectives, the study’s findings that fair value accounting is associated with higher bond yield spread cast further doubt on the net benefits of applying a full fair value accounting regime. Third, PCAOB may consider enhancing guidance to auditors on Level 2 fair value inputs, to further enhance audit quality. Finally, creditors can be more cautious in interpretating accounting information based on fair value while viewing the employment of auditor experts as a positive signal.

First, the paper extends research on the role of accounting information in public debt contracting. Second, this study adds to the auditing literature about the impact of industry expertise. Finally, and more generally, this study adds to the ongoing controversy on the application of fair value accounting.

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Fair value accounting and the cost of corporate bonds: the role of auditor expertise10.1108/JFRA-11-2022-0398Journal of Financial Reporting and Accounting2023-10-24© 2023 Emerald Publishing LimitedMichel MagnanHaiping WangYaqi ShiJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-10-2410.1108/JFRA-11-2022-0398https://www.emerald.com/insight/content/doi/10.1108/JFRA-11-2022-0398/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Political connections and cost of debt: a meta-analysishttps://www.emerald.com/insight/content/doi/10.1108/JFRA-11-2022-0413/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to conduct a meta-analysis regarding the association between political connections and the cost of debt and tests for the moderating effect of the level of creditor protection on this relationship. Keywords used to collect relevant empirical papers include “political connections, political ties, and political connectedness” from the one side, and “cost of loan finance, and cost of debt” from the other side. The search yields 24 published empirical papers from 2005 to 2022. Findings show that there is a significant negative association between political connections and the cost of debt; this relationship is more pronounced only for countries characterized by a strong level of creditor protection. This moderating effect is further confirmed using meta-regression. Findings are relevant for policymakers and managers in settings where relationship-based capitalism represents a prevailing feature as they highlight the important legal and institutional characteristics when considering the impact of political connections on the cost of debt. The paper also discusses some limitations inherent to this stream of research and proposes future research perspectives.Political connections and cost of debt: a meta-analysis
Imen Khelil
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to conduct a meta-analysis regarding the association between political connections and the cost of debt and tests for the moderating effect of the level of creditor protection on this relationship.

Keywords used to collect relevant empirical papers include “political connections, political ties, and political connectedness” from the one side, and “cost of loan finance, and cost of debt” from the other side. The search yields 24 published empirical papers from 2005 to 2022.

Findings show that there is a significant negative association between political connections and the cost of debt; this relationship is more pronounced only for countries characterized by a strong level of creditor protection. This moderating effect is further confirmed using meta-regression.

Findings are relevant for policymakers and managers in settings where relationship-based capitalism represents a prevailing feature as they highlight the important legal and institutional characteristics when considering the impact of political connections on the cost of debt. The paper also discusses some limitations inherent to this stream of research and proposes future research perspectives.

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Political connections and cost of debt: a meta-analysis10.1108/JFRA-11-2022-0413Journal of Financial Reporting and Accounting2023-01-06© 2022 Emerald Publishing LimitedImen KhelilJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-01-0610.1108/JFRA-11-2022-0413https://www.emerald.com/insight/content/doi/10.1108/JFRA-11-2022-0413/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
The effects of amended sustainability reporting requirements on corporate social responsibility reporting and firm value: the moderating role of assurancehttps://www.emerald.com/insight/content/doi/10.1108/JFRA-11-2022-0414/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestTo assist Malaysian public-listed companies (PLCs) in preparing corporate social responsibility (CSR) reports, Bursa Malaysia Berhad (BMB) launched the second edition of the Sustainability Reporting Guide (SRG) in 2018. This new SRG edition has several additional requirements for CSR reporting (CSRR), the most important of which is a chapter on assurance which provides detailed guidance on how it may be carried out. This study aims to determine whether the new SRG edition influences the extent of CSRR, and whether such effect is moderated by the provision of assurance on CSRR. It also aims to identify whether amending CSRR regulations and providing assurance on such reporting indirectly influences firm value through the possible improvement in the extent of CSRR. This study performed a content analysis of the CSRR of a sample of Malaysian PLCs that maintained their positions among the top 100 companies by market capitalization between 2017 and 2020 to determine the extent of CSRR for the two years before and two years after the implementation of the new edition of SRG. This study conducted different statistical analyses to indicate whether the implementation of the second edition of SRG has an effect on enhancing the extent of CSRR, and whether the provision of assurance on such reporting moderates such an effect. This study then used instrumental variable regressions to examine the influence of the predicted extent of CSRR on firms’ value measured by Tobin’s Q. This study found that the implementation of the second edition of SRG has a positive and significant influence on the extent of CSRR. This effect is strengthened by the provision of assurance on CSRR. Instrumental variable regressions also indicate that enhancing the extent of CSRR affected by the second edition of SRG is linked to higher firm value. To the best of the authors’ knowledge, this study is one of the first to assess the determinants and implications of CSRR among Malaysian companies after adopting the second edition of SRG.The effects of amended sustainability reporting requirements on corporate social responsibility reporting and firm value: the moderating role of assurance
Ahmed Elsayed Awad Bakry, Zubir Azhar, K. Kishan
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

To assist Malaysian public-listed companies (PLCs) in preparing corporate social responsibility (CSR) reports, Bursa Malaysia Berhad (BMB) launched the second edition of the Sustainability Reporting Guide (SRG) in 2018. This new SRG edition has several additional requirements for CSR reporting (CSRR), the most important of which is a chapter on assurance which provides detailed guidance on how it may be carried out. This study aims to determine whether the new SRG edition influences the extent of CSRR, and whether such effect is moderated by the provision of assurance on CSRR. It also aims to identify whether amending CSRR regulations and providing assurance on such reporting indirectly influences firm value through the possible improvement in the extent of CSRR.

This study performed a content analysis of the CSRR of a sample of Malaysian PLCs that maintained their positions among the top 100 companies by market capitalization between 2017 and 2020 to determine the extent of CSRR for the two years before and two years after the implementation of the new edition of SRG. This study conducted different statistical analyses to indicate whether the implementation of the second edition of SRG has an effect on enhancing the extent of CSRR, and whether the provision of assurance on such reporting moderates such an effect. This study then used instrumental variable regressions to examine the influence of the predicted extent of CSRR on firms’ value measured by Tobin’s Q.

This study found that the implementation of the second edition of SRG has a positive and significant influence on the extent of CSRR. This effect is strengthened by the provision of assurance on CSRR. Instrumental variable regressions also indicate that enhancing the extent of CSRR affected by the second edition of SRG is linked to higher firm value.

To the best of the authors’ knowledge, this study is one of the first to assess the determinants and implications of CSRR among Malaysian companies after adopting the second edition of SRG.

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The effects of amended sustainability reporting requirements on corporate social responsibility reporting and firm value: the moderating role of assurance10.1108/JFRA-11-2022-0414Journal of Financial Reporting and Accounting2023-07-26© 2023 Emerald Publishing LimitedAhmed Elsayed Awad BakryZubir AzharK. KishanJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-07-2610.1108/JFRA-11-2022-0414https://www.emerald.com/insight/content/doi/10.1108/JFRA-11-2022-0414/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
The implementation of sustainability practices in Arab higher education institutionshttps://www.emerald.com/insight/content/doi/10.1108/JFRA-11-2022-0415/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis paper aims to explore how sustainability practices were implemented in a higher education institution within a local setting in the Gulf and Arab Emirates Region. This study examined the impact of social and cultural requirements on the development of the master plan for the New Kuwait University campus with regards to sustainability to illustrate how current social and cultural requirements impact the design of a future learning environment whilst highlighting the essential role of organisational actors in this implementation process. Using an in-depth case study approach, the authors conducted 21 semi-structured interviews with educators and administrative staff who had been involved in the sustainability implementation process at Kuwait University. These participants were involved at different stages in the implementation of a major sustainability project at Kuwait University. The interviews were further supplemented by analysing supporting documents and communications. The analysis reveals that sustainability was embedded in a narrative that was repeated at the practice level; this directed the setting of objectives for the project and its various sub-tasks. It also helped actors to develop their understandings of practice and the importance of social emotions, self-intentions and patterns of culture in the process. This study further reveals that participants mainly focused on environmental issues regarding saving paper/electricity and overlooked aspects of a wider concepts and core values of sustainability, and there is a significant amount of lack of knowledge and awareness on matters about sustainability, especially with the understanding of its definition. This study draws on practice-organisation framework used by Schatzki (2002, 2010), suggesting that sustainability implementation is a process led by rules, practical understanding, general understanding and teleoaffective structures, to highlight the role of agency and change among various actors in implementing sustainability. A practice-theory framing is used to signpost the roles played by various actors in establishing goals and tasks for the project while taking account of local understanding and independence in the implementation of sustainability practices. Engaging with practice theory framework offers us theoretical basis that is fundamentally different from the theories of interaction-oriented approaches in sustainable design.The implementation of sustainability practices in Arab higher education institutions
Muhammad Al Mahameed, Umair Riaz, Mohammad Salem Aldoob, Anwar Halari
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This paper aims to explore how sustainability practices were implemented in a higher education institution within a local setting in the Gulf and Arab Emirates Region. This study examined the impact of social and cultural requirements on the development of the master plan for the New Kuwait University campus with regards to sustainability to illustrate how current social and cultural requirements impact the design of a future learning environment whilst highlighting the essential role of organisational actors in this implementation process.

Using an in-depth case study approach, the authors conducted 21 semi-structured interviews with educators and administrative staff who had been involved in the sustainability implementation process at Kuwait University. These participants were involved at different stages in the implementation of a major sustainability project at Kuwait University. The interviews were further supplemented by analysing supporting documents and communications.

The analysis reveals that sustainability was embedded in a narrative that was repeated at the practice level; this directed the setting of objectives for the project and its various sub-tasks. It also helped actors to develop their understandings of practice and the importance of social emotions, self-intentions and patterns of culture in the process. This study further reveals that participants mainly focused on environmental issues regarding saving paper/electricity and overlooked aspects of a wider concepts and core values of sustainability, and there is a significant amount of lack of knowledge and awareness on matters about sustainability, especially with the understanding of its definition.

This study draws on practice-organisation framework used by Schatzki (2002, 2010), suggesting that sustainability implementation is a process led by rules, practical understanding, general understanding and teleoaffective structures, to highlight the role of agency and change among various actors in implementing sustainability. A practice-theory framing is used to signpost the roles played by various actors in establishing goals and tasks for the project while taking account of local understanding and independence in the implementation of sustainability practices. Engaging with practice theory framework offers us theoretical basis that is fundamentally different from the theories of interaction-oriented approaches in sustainable design.

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The implementation of sustainability practices in Arab higher education institutions10.1108/JFRA-11-2022-0415Journal of Financial Reporting and Accounting2023-02-02© 2023 Emerald Publishing LimitedMuhammad Al MahameedUmair RiazMohammad Salem AldoobAnwar HalariJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-02-0210.1108/JFRA-11-2022-0415https://www.emerald.com/insight/content/doi/10.1108/JFRA-11-2022-0415/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Ownership structure and firm performance: evidence from Saudi Arabiahttps://www.emerald.com/insight/content/doi/10.1108/JFRA-11-2022-0422/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to examine the impact of ownership structure variables on the performance of Saudi listed firms. The impact of ownership structure variables on firm performance is examined using fixed effects and dynamic panel generalised method of moments regression approaches for 70 listed firms over the period 2016–2021. Ownership structure variables are captured by examining government, institutional, insider, foreign and family ownership, and firm performance is gauged in terms of the accounting-based measures of return on assets and the return on equity and the market-based measures of Tobin’s Q and the market-to-book ratio. The results show that government, institutional, insider and foreign ownership all positively affect both accounting and market-based performance measures, whereas family ownership exerts a negative impact across the models. The findings support resource dependence theory, agency theory and alignment effects arguments. The findings have significant implications for Saudi regulators in their effort to improve domestic capital market efficiency and investor protection, while also highlighting the need for a corporate governance code to safeguard minority shareholders. The results demonstrate that government, institutional, insider and foreign ownership exert an important impact on firm operational and market performance. This study expands the literature by examining how ownership structure variables affect performance in an interesting developing country corporate context.Ownership structure and firm performance: evidence from Saudi Arabia
Helmi A. Boshnak
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to examine the impact of ownership structure variables on the performance of Saudi listed firms.

The impact of ownership structure variables on firm performance is examined using fixed effects and dynamic panel generalised method of moments regression approaches for 70 listed firms over the period 2016–2021. Ownership structure variables are captured by examining government, institutional, insider, foreign and family ownership, and firm performance is gauged in terms of the accounting-based measures of return on assets and the return on equity and the market-based measures of Tobin’s Q and the market-to-book ratio.

The results show that government, institutional, insider and foreign ownership all positively affect both accounting and market-based performance measures, whereas family ownership exerts a negative impact across the models. The findings support resource dependence theory, agency theory and alignment effects arguments.

The findings have significant implications for Saudi regulators in their effort to improve domestic capital market efficiency and investor protection, while also highlighting the need for a corporate governance code to safeguard minority shareholders. The results demonstrate that government, institutional, insider and foreign ownership exert an important impact on firm operational and market performance.

This study expands the literature by examining how ownership structure variables affect performance in an interesting developing country corporate context.

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Ownership structure and firm performance: evidence from Saudi Arabia10.1108/JFRA-11-2022-0422Journal of Financial Reporting and Accounting2023-03-28© 2023 Emerald Publishing LimitedHelmi A. BoshnakJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-03-2810.1108/JFRA-11-2022-0422https://www.emerald.com/insight/content/doi/10.1108/JFRA-11-2022-0422/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
How risk and ambiguity affect accounting conservatismhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-11-2022-0425/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to examine the diametrically opposite effects of probabilistic (risk) and nonprobabilistic uncertainty (ambiguity) on accounting conservatism. This study uses panel regression models with year and industry-fixed effects. It uses financial and market data from the communication and energy sectors of 24 countries, encompassing 1,946 firms and 5,838 firm-year observations. The study reveals that conservatism is a rational response to risk. However, in the presence of higher ambiguity where uncertainty exceeds firm control and outcomes become unpredictable, management reduces conservative accounting practices. Robustness tests support the validity of these findings across different institutional frameworks, agency risks, sample selection and heterogeneity. This study contributes to the existing literature by exploring the contrasting effects of risk and ambiguity on accounting conservatism. It enhances the understanding of how various institutional factors influence the asymmetric recognition of bad news compared to good news under conditions of uncertainty. By understanding the role of accounting conservatism in responding to uncertainties, regulators can develop more informed and effective policies that align with the dynamic nature of business environments. This research provides novel and original ideas suggesting that the change in accounting conservatism is contingent upon the firms’ ambiguity or risk.How risk and ambiguity affect accounting conservatism
Fuad Fuad, Abdul Rohman, Etna Nur Afri Yuyetta, Zulaikha Zulaikha
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to examine the diametrically opposite effects of probabilistic (risk) and nonprobabilistic uncertainty (ambiguity) on accounting conservatism.

This study uses panel regression models with year and industry-fixed effects. It uses financial and market data from the communication and energy sectors of 24 countries, encompassing 1,946 firms and 5,838 firm-year observations.

The study reveals that conservatism is a rational response to risk. However, in the presence of higher ambiguity where uncertainty exceeds firm control and outcomes become unpredictable, management reduces conservative accounting practices. Robustness tests support the validity of these findings across different institutional frameworks, agency risks, sample selection and heterogeneity.

This study contributes to the existing literature by exploring the contrasting effects of risk and ambiguity on accounting conservatism. It enhances the understanding of how various institutional factors influence the asymmetric recognition of bad news compared to good news under conditions of uncertainty.

By understanding the role of accounting conservatism in responding to uncertainties, regulators can develop more informed and effective policies that align with the dynamic nature of business environments.

This research provides novel and original ideas suggesting that the change in accounting conservatism is contingent upon the firms’ ambiguity or risk.

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How risk and ambiguity affect accounting conservatism10.1108/JFRA-11-2022-0425Journal of Financial Reporting and Accounting2023-07-25© 2023 Emerald Publishing LimitedFuad FuadAbdul RohmanEtna Nur Afri YuyettaZulaikha ZulaikhaJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-07-2510.1108/JFRA-11-2022-0425https://www.emerald.com/insight/content/doi/10.1108/JFRA-11-2022-0425/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Does local vs. national government ownership, and auditor choice matter for audit pricing? Evidence from Chinahttps://www.emerald.com/insight/content/doi/10.1108/JFRA-11-2022-0426/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe Chinese data setting allows researchers to explore the influence of local versus national (central) government ownership on companies. This study aims to examine the influence of government ownership (local versus national) and auditor choice (choosing larger or smaller firms) on audit pricing in China. This study executed three panel data regressions to examine the two hypotheses using 19,626 observations from 2009 to 2017 in the Chinese data setting. This study also uses the Sobel test to investigate the moderating effect of auditor choice. This study first examines whether choosing a large audit firm positively influences audit pricing and whether listed state-owned enterprises (SOEs) charge less audit fees to audit firms after controlling for various variables. However, the interaction influence of government ownership and audit firm size on audit pricing is positive, suggesting that a large audit firm charges a client company more, even if the client is an SOE. More importantly, when we divide SOEs into national- and local-SOEs, the results of the influence of auditor choice, government ownership and the interaction of government ownership on audit pricing are consistent (plus, minus, plus), and audit firms charge local-SOEs less than national-SOEs. Furthermore, from the additional analysis, this study finds that the strong auditor type has a moderate effect on the case of local-SOEs on audit pricing and local-SOEs choose smaller auditors. Research on the differences between local and national government ownership is limited. This study adds empirical results from this perspective. In particular, the findings suggest a further audit pricing research direction to consider the influence of client companies’ ownership types and auditor choice, especially in countries with planned economies.Does local vs. national government ownership, and auditor choice matter for audit pricing? Evidence from China
Hu Dan Semba, Lefei Wu
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

The Chinese data setting allows researchers to explore the influence of local versus national (central) government ownership on companies. This study aims to examine the influence of government ownership (local versus national) and auditor choice (choosing larger or smaller firms) on audit pricing in China.

This study executed three panel data regressions to examine the two hypotheses using 19,626 observations from 2009 to 2017 in the Chinese data setting. This study also uses the Sobel test to investigate the moderating effect of auditor choice.

This study first examines whether choosing a large audit firm positively influences audit pricing and whether listed state-owned enterprises (SOEs) charge less audit fees to audit firms after controlling for various variables. However, the interaction influence of government ownership and audit firm size on audit pricing is positive, suggesting that a large audit firm charges a client company more, even if the client is an SOE. More importantly, when we divide SOEs into national- and local-SOEs, the results of the influence of auditor choice, government ownership and the interaction of government ownership on audit pricing are consistent (plus, minus, plus), and audit firms charge local-SOEs less than national-SOEs. Furthermore, from the additional analysis, this study finds that the strong auditor type has a moderate effect on the case of local-SOEs on audit pricing and local-SOEs choose smaller auditors.

Research on the differences between local and national government ownership is limited. This study adds empirical results from this perspective. In particular, the findings suggest a further audit pricing research direction to consider the influence of client companies’ ownership types and auditor choice, especially in countries with planned economies.

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Does local vs. national government ownership, and auditor choice matter for audit pricing? Evidence from China10.1108/JFRA-11-2022-0426Journal of Financial Reporting and Accounting2023-09-15© 2023 Emerald Publishing LimitedHu Dan SembaLefei WuJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-09-1510.1108/JFRA-11-2022-0426https://www.emerald.com/insight/content/doi/10.1108/JFRA-11-2022-0426/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Audit partner gender and the COVID-19 pandemic: the impact on audit fees and key audit mattershttps://www.emerald.com/insight/content/doi/10.1108/JFRA-11-2022-0431/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe purpose of this study is to analyze the influence of the COVID-19 pandemic on audit fees and the reporting of key audit matters (KAMs). Additionally, this study also looks into potential differences in the behavior of male and female audit partners during this period, adding to the existing research on gender's effect on different elements of the audit process. This study used a sample of all FTSE 350 firms from before the COVID-19 pandemic and during the pandemic. It analyzed the data using Ordinary Least Squares regression analysis to test its hypotheses. This paper provides early evidence on the impact of the COVID-19 pandemic on audit fees and KAM disclosures in the UK. The results of this study show an increase in audit fees during the pandemic and greater detail in the reporting of KAMs, with no significant difference between male and female audit partners. These findings will be of interest to audit firms and regulators as they assess the performance of auditors during the pandemic and evaluate the expanded audit report's effectiveness in providing sufficient information to financial statement users. This study provides first-of-its-kind empirical evidence on how auditors in the UK reacted to the COVID-19 pandemic. The findings of this study will be of interest to audit firms, regulators, such as the Financial Reporting Council, and other stakeholders as they evaluate the performance of auditors during the crisis period. The results will help regulators assess the effectiveness of the expanded audit report in providing sufficient information during a time of heightened risk and scrutiny.Audit partner gender and the COVID-19 pandemic: the impact on audit fees and key audit matters
Peter Murphy, Craig McLaughlin, Ahmed A. Elamer
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

The purpose of this study is to analyze the influence of the COVID-19 pandemic on audit fees and the reporting of key audit matters (KAMs). Additionally, this study also looks into potential differences in the behavior of male and female audit partners during this period, adding to the existing research on gender's effect on different elements of the audit process.

This study used a sample of all FTSE 350 firms from before the COVID-19 pandemic and during the pandemic. It analyzed the data using Ordinary Least Squares regression analysis to test its hypotheses.

This paper provides early evidence on the impact of the COVID-19 pandemic on audit fees and KAM disclosures in the UK. The results of this study show an increase in audit fees during the pandemic and greater detail in the reporting of KAMs, with no significant difference between male and female audit partners. These findings will be of interest to audit firms and regulators as they assess the performance of auditors during the pandemic and evaluate the expanded audit report's effectiveness in providing sufficient information to financial statement users.

This study provides first-of-its-kind empirical evidence on how auditors in the UK reacted to the COVID-19 pandemic. The findings of this study will be of interest to audit firms, regulators, such as the Financial Reporting Council, and other stakeholders as they evaluate the performance of auditors during the crisis period. The results will help regulators assess the effectiveness of the expanded audit report in providing sufficient information during a time of heightened risk and scrutiny.

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Audit partner gender and the COVID-19 pandemic: the impact on audit fees and key audit matters10.1108/JFRA-11-2022-0431Journal of Financial Reporting and Accounting2023-07-07© 2023 Emerald Publishing LimitedPeter MurphyCraig McLaughlinAhmed A. ElamerJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-07-0710.1108/JFRA-11-2022-0431https://www.emerald.com/insight/content/doi/10.1108/JFRA-11-2022-0431/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Do free-floated shares and board characteristics influence corporate risk disclosure? An empirical analysis on conventional banks in a developing countryhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-11-2022-0436/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to explore the status and drivers (including free-floated shares, board size, rule duality and board independence) of corporate risk disclosure (CRD) for the conventional listed banks in the Egyptian stock market from 2010 to 2021, which include the country’s major political upheavals and the COVID-19 pandemic. This study based on a sample of 117 annual reports of sampled banks from 2010 to 2021. RD index of Al-Maghzom (2016) was developed and adopted to quantify CRD using an unweighted scoring system. The multiple linear regression model was used to validate the hypotheses. The analysis shows that the COVID-19 pandemic increased insignificantly disclosure of all risks except for segment risks. In addition, findings reveal that all sampled banks adhere highly to the requirements of mandatory RD, with a low level of adherence to voluntary RD. Moreover, the analysis concluded that the board size and free-floating shares positively affect the disclosure of financial, operational, general information. The study’s limitations include the content analysis methodology, reliance on annual reports, emphasis on financial and non-financial risks, focus on listed conventional banks in Egypt. Current study’s findings are more likely to be useful for many parties. It informs investors about the characteristics of the boards’ directors of Egyptian listed banks that disclosed risk information. Banks should disclose more comprehensive risk information. For academics, the current study’s limitations can be considered in their future research. This work fills a new research area in which there is relatively little research in emerging financial markets that adds new evidence to the relationship between RD and both free-floating shares and board characteristics, particularly in Egypt.Do free-floated shares and board characteristics influence corporate risk disclosure? An empirical analysis on conventional banks in a developing country
Elhassan Kotb Abdelrahman Radwan, Nada Omar Hassan Ali, Mostafa Kayed Abdelazeem Mohamed
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to explore the status and drivers (including free-floated shares, board size, rule duality and board independence) of corporate risk disclosure (CRD) for the conventional listed banks in the Egyptian stock market from 2010 to 2021, which include the country’s major political upheavals and the COVID-19 pandemic.

This study based on a sample of 117 annual reports of sampled banks from 2010 to 2021. RD index of Al-Maghzom (2016) was developed and adopted to quantify CRD using an unweighted scoring system. The multiple linear regression model was used to validate the hypotheses.

The analysis shows that the COVID-19 pandemic increased insignificantly disclosure of all risks except for segment risks. In addition, findings reveal that all sampled banks adhere highly to the requirements of mandatory RD, with a low level of adherence to voluntary RD. Moreover, the analysis concluded that the board size and free-floating shares positively affect the disclosure of financial, operational, general information.

The study’s limitations include the content analysis methodology, reliance on annual reports, emphasis on financial and non-financial risks, focus on listed conventional banks in Egypt.

Current study’s findings are more likely to be useful for many parties. It informs investors about the characteristics of the boards’ directors of Egyptian listed banks that disclosed risk information. Banks should disclose more comprehensive risk information. For academics, the current study’s limitations can be considered in their future research.

This work fills a new research area in which there is relatively little research in emerging financial markets that adds new evidence to the relationship between RD and both free-floating shares and board characteristics, particularly in Egypt.

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Do free-floated shares and board characteristics influence corporate risk disclosure? An empirical analysis on conventional banks in a developing country10.1108/JFRA-11-2022-0436Journal of Financial Reporting and Accounting2023-05-22© 2023 Emerald Publishing LimitedElhassan Kotb Abdelrahman RadwanNada Omar Hassan AliMostafa Kayed Abdelazeem MohamedJournal of Financial Reporting and Accountingahead-of-printahead-of-print2023-05-2210.1108/JFRA-11-2022-0436https://www.emerald.com/insight/content/doi/10.1108/JFRA-11-2022-0436/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2023 Emerald Publishing Limited
Earnings predictability or truthfulness? Which one investors care more abouthttps://www.emerald.com/insight/content/doi/10.1108/JFRA-11-2023-0642/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to investigate the impact of earnings predictability and truthfulness on nonprofessional investors’ investment willingness. Earnings predictability is captured by quarterly earnings autocorrelation, and earnings truthfulness is indicated by real earnings management (REM). The average of investment attractiveness and willingness measures investment willingness. The authors use experiments to isolate the impact of quarterly earnings autocorrelation and REM on investors’ investment behaviors. From the 2 × 2 design, the authors observe that investors weight more on earnings predictability than earnings truthfulness. The generalization of the findings may be constrained for the following reasons. First, the authors use only one proxy, REM, to measure earnings truthfulness. In addition, the authors provide the participants, Amazon Mechanical Turk, with earnings predictability. Results may no longer hold if each participant has different understanding and analysis of earnings predictability. In periods of unprecedented and severe financial uncertainty (i.e. the COVID-19 pandemic), investors rely more on earnings predictability than on earnings truthfulness. The study assists managers to strategically emphasize the predictability of earnings to attract investors, especially when firms face financial challenges or uncertainty. This study contributes to understanding investor behavior and the critical role of earnings predictability and truthfulness in shaping investment decisions. This paper contributes to the literature of earnings properties in financial reporting, particularly by shedding light on the nuanced interplay between earnings predictability and earnings truthfulness. The research also demonstrates that elevated earnings autocorrelation indirectly stimulates investment willingness by enhancing the investors’ perception of earnings persistence of targeted firms.Earnings predictability or truthfulness? Which one investors care more about
Shihui Fan, Yan Zhou
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to investigate the impact of earnings predictability and truthfulness on nonprofessional investors’ investment willingness.

Earnings predictability is captured by quarterly earnings autocorrelation, and earnings truthfulness is indicated by real earnings management (REM). The average of investment attractiveness and willingness measures investment willingness. The authors use experiments to isolate the impact of quarterly earnings autocorrelation and REM on investors’ investment behaviors.

From the 2 × 2 design, the authors observe that investors weight more on earnings predictability than earnings truthfulness.

The generalization of the findings may be constrained for the following reasons. First, the authors use only one proxy, REM, to measure earnings truthfulness. In addition, the authors provide the participants, Amazon Mechanical Turk, with earnings predictability. Results may no longer hold if each participant has different understanding and analysis of earnings predictability.

In periods of unprecedented and severe financial uncertainty (i.e. the COVID-19 pandemic), investors rely more on earnings predictability than on earnings truthfulness. The study assists managers to strategically emphasize the predictability of earnings to attract investors, especially when firms face financial challenges or uncertainty.

This study contributes to understanding investor behavior and the critical role of earnings predictability and truthfulness in shaping investment decisions.

This paper contributes to the literature of earnings properties in financial reporting, particularly by shedding light on the nuanced interplay between earnings predictability and earnings truthfulness. The research also demonstrates that elevated earnings autocorrelation indirectly stimulates investment willingness by enhancing the investors’ perception of earnings persistence of targeted firms.

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Earnings predictability or truthfulness? Which one investors care more about10.1108/JFRA-11-2023-0642Journal of Financial Reporting and Accounting2024-02-21© 2024 Emerald Publishing LimitedShihui FanYan ZhouJournal of Financial Reporting and Accountingahead-of-printahead-of-print2024-02-2110.1108/JFRA-11-2023-0642https://www.emerald.com/insight/content/doi/10.1108/JFRA-11-2023-0642/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Emerald Publishing Limited
COVID-19 exposure: a risk-averse firms’ responsehttps://www.emerald.com/insight/content/doi/10.1108/JFRA-12-2021-0430/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestWithout a doubt, COVID-19 is a disruptive event that one may not consider before it becomes a global pandemic. This study aims to examine the firm’s risk preference, represented as board characteristics towards COVID-19 exposure in Indonesia. This study uses the boardroom’s average value of board age and female proportion to represent board characteristics. Fixed-effect regression based on industry (Industry FE) and year (Year FE) analyses 861 firm-year observations of all firms listed on the Indonesian Stock Exchange in 2019–2020. The result shows a positive relationship between the female board and COVID-19 exposure disclosure. Meanwhile, the age proportion does not offer a significant result. The additional analysis document that the directors mainly drove the result and were only relevant during 2020. These results are robust due to coarsened exact matching tests and Heckman’s two-stage regression. This study enriches COVID-19 literature, especially from a quantitative perspective. The rise of global crises makes the outputs of this study important for non-financial listed firms in Indonesia.COVID-19 exposure: a risk-averse firms’ response
Mohammad Nasih, Damara Ardelia Kusuma Wardani, Iman Harymawan, Fajar Kristanto Gautama Putra, Adel Sarea
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

Without a doubt, COVID-19 is a disruptive event that one may not consider before it becomes a global pandemic. This study aims to examine the firm’s risk preference, represented as board characteristics towards COVID-19 exposure in Indonesia.

This study uses the boardroom’s average value of board age and female proportion to represent board characteristics. Fixed-effect regression based on industry (Industry FE) and year (Year FE) analyses 861 firm-year observations of all firms listed on the Indonesian Stock Exchange in 2019–2020.

The result shows a positive relationship between the female board and COVID-19 exposure disclosure. Meanwhile, the age proportion does not offer a significant result. The additional analysis document that the directors mainly drove the result and were only relevant during 2020. These results are robust due to coarsened exact matching tests and Heckman’s two-stage regression. This study enriches COVID-19 literature, especially from a quantitative perspective.

The rise of global crises makes the outputs of this study important for non-financial listed firms in Indonesia.

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COVID-19 exposure: a risk-averse firms’ response10.1108/JFRA-12-2021-0430Journal of Financial Reporting and Accounting2022-08-10© 2022 Emerald Publishing LimitedMohammad NasihDamara Ardelia Kusuma WardaniIman HarymawanFajar Kristanto Gautama PutraAdel SareaJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-08-1010.1108/JFRA-12-2021-0430https://www.emerald.com/insight/content/doi/10.1108/JFRA-12-2021-0430/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
Audit committee financial expertise and information asymmetryhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-12-2021-0440/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe purpose of this study is to examine the association between audit committee expertise and asymmetric information in the US equity market. The authors use measures of information asymmetry for 705 US firms (5,260 firm-year observations) over the period from 2007 to 2018, and use the theory of expertise (Ericsson and Smith, 1991) to examine the association between audit committee financial expertise and information asymmetry. The authors use multiple econometric approaches such as firm fixed-effect regression and two-stage ordinary least squares regression to control for possible endogeneity and reverse causality and find that the results remain the same. The authors find that the existence of an audit committee with financial expertise is negatively and significantly associated with information asymmetry. The authors further provide empirical evidence through which audit committee financial expertise affects the firm’s informational environment. Additional analysis supports the argument that the audit committee’s financial expertise enhances the firm’s informational environment by increasing (decreasing) analyst following (dispersion). One limitation to consider, like most studies on audit committees, is that the authors do not examine the actual role performed by the audit committee. The authors focus on the characteristics stipulated by the Sarbanes–Oxley Act 2002 and stock exchange rules regarding the financial expertise of audit committee members only. This study is useful to policy makers, standard setters, investors, activists, managers, lenders and various stakeholders who rely on the financial statements of firms with an expert audit committee on board. The outcome of this study promotes recruiting audit committees with financial expertise due to the assumed benefits of this trait to the US firm. The results of this study are not event-dependent and therefore have persistent effects, which is important to the evaluation of the usefulness of a regulation. This study promotes recruiting audit committees with financial expertise on boards because of the assumed benefits to the firm and investors. This study is the first to document that financial expertise of audit committee characteristics is not only negatively related to the magnitude of information asymmetry but also driven by the financial expertise of audit committee members rather than chairs.Audit committee financial expertise and information asymmetry
Dina El Mahdy, Jia Hao, Yu Cong
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

The purpose of this study is to examine the association between audit committee expertise and asymmetric information in the US equity market.

The authors use measures of information asymmetry for 705 US firms (5,260 firm-year observations) over the period from 2007 to 2018, and use the theory of expertise (Ericsson and Smith, 1991) to examine the association between audit committee financial expertise and information asymmetry. The authors use multiple econometric approaches such as firm fixed-effect regression and two-stage ordinary least squares regression to control for possible endogeneity and reverse causality and find that the results remain the same.

The authors find that the existence of an audit committee with financial expertise is negatively and significantly associated with information asymmetry. The authors further provide empirical evidence through which audit committee financial expertise affects the firm’s informational environment. Additional analysis supports the argument that the audit committee’s financial expertise enhances the firm’s informational environment by increasing (decreasing) analyst following (dispersion).

One limitation to consider, like most studies on audit committees, is that the authors do not examine the actual role performed by the audit committee. The authors focus on the characteristics stipulated by the Sarbanes–Oxley Act 2002 and stock exchange rules regarding the financial expertise of audit committee members only.

This study is useful to policy makers, standard setters, investors, activists, managers, lenders and various stakeholders who rely on the financial statements of firms with an expert audit committee on board. The outcome of this study promotes recruiting audit committees with financial expertise due to the assumed benefits of this trait to the US firm.

The results of this study are not event-dependent and therefore have persistent effects, which is important to the evaluation of the usefulness of a regulation. This study promotes recruiting audit committees with financial expertise on boards because of the assumed benefits to the firm and investors.

This study is the first to document that financial expertise of audit committee characteristics is not only negatively related to the magnitude of information asymmetry but also driven by the financial expertise of audit committee members rather than chairs.

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Audit committee financial expertise and information asymmetry10.1108/JFRA-12-2021-0440Journal of Financial Reporting and Accounting2022-10-25© 2022 Emerald Publishing LimitedDina El MahdyJia HaoYu CongJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-10-2510.1108/JFRA-12-2021-0440https://www.emerald.com/insight/content/doi/10.1108/JFRA-12-2021-0440/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
Corporate disclosure timing under IFRS: the case of emerging Georgiahttps://www.emerald.com/insight/content/doi/10.1108/JFRA-12-2021-0443/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to examine the timing of corporate disclosure in the context of Georgia, an emerging market where a recent reform of corporate financial transparency mandated about 80,000 private sector entities to publicly disclose their annual financial statements. The main analysis covers more than 4,000 large, medium, small and micro private sector entities, for which the data is obtained from the Ministry of Finance of Georgia. This paper builds an empirical model of logit/probit regression, with industry fixed and random effects to investigate the drivers of the corporate disclosure timing. Findings suggest that the mean reporting time lag is 279 days after the fiscal year-end, that is nine days after the statutory deadline. Almost one-third (30%) of the entities miss the nine-month statutory deadline, while the timely filers almost unexceptionally file immediately before the deadline. Multivariate tests reveal that voluntarily filing entities completed the process significantly faster than those mandated to do so; audited financial statements take more time to be filed, whereas those with unqualified audit opinion or audited by large/international audit firms are filed faster than their counterparts. The author concludes that despite the overall high filing rates, the timing of corporate disclosure is not (yet) efficiently enforced in practice (but is progressing over time), whereas regulatory incentives prevail over market incentives among the timely filers. To the best of the author’s knowledge, this is the first study that explores corporate disclosure timing incentives in the context of Georgia. This study extends prior literature on the timing of financial information from an emerging country’s private sector perspective, with juxtaposed market and regulatory incentives.Corporate disclosure timing under IFRS: the case of emerging Georgia
Erekle Pirveli
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to examine the timing of corporate disclosure in the context of Georgia, an emerging market where a recent reform of corporate financial transparency mandated about 80,000 private sector entities to publicly disclose their annual financial statements.

The main analysis covers more than 4,000 large, medium, small and micro private sector entities, for which the data is obtained from the Ministry of Finance of Georgia. This paper builds an empirical model of logit/probit regression, with industry fixed and random effects to investigate the drivers of the corporate disclosure timing.

Findings suggest that the mean reporting time lag is 279 days after the fiscal year-end, that is nine days after the statutory deadline. Almost one-third (30%) of the entities miss the nine-month statutory deadline, while the timely filers almost unexceptionally file immediately before the deadline. Multivariate tests reveal that voluntarily filing entities completed the process significantly faster than those mandated to do so; audited financial statements take more time to be filed, whereas those with unqualified audit opinion or audited by large/international audit firms are filed faster than their counterparts. The author concludes that despite the overall high filing rates, the timing of corporate disclosure is not (yet) efficiently enforced in practice (but is progressing over time), whereas regulatory incentives prevail over market incentives among the timely filers.

To the best of the author’s knowledge, this is the first study that explores corporate disclosure timing incentives in the context of Georgia. This study extends prior literature on the timing of financial information from an emerging country’s private sector perspective, with juxtaposed market and regulatory incentives.

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Corporate disclosure timing under IFRS: the case of emerging Georgia10.1108/JFRA-12-2021-0443Journal of Financial Reporting and Accounting2022-08-15© 2022 Emerald Publishing LimitedErekle PirveliJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-08-1510.1108/JFRA-12-2021-0443https://www.emerald.com/insight/content/doi/10.1108/JFRA-12-2021-0443/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
Does earnings quality impact firms’ performance? The case of Portuguese SMEs from the mold sectorhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-12-2021-0444/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to study the impact of earnings quality on firms’ financial performance. An unbalanced panel data of 237 small- and medium-sized Portuguese companies from the mold industry, using 2010–2018 yearly data was analyzed. While most studies focus only on earnings management when assessing earnings quality, in this study six proxies for earnings quality are used, namely, accruals quality (a proxy for earnings management), earnings persistence, earnings predictability, earnings smoothness, earnings timeliness and earnings conservatism. Moreover, two proxies of financial performance are considered, the return on assets and the economic value added. An econometric model was estimated using either a fixed-effects or a random-effects specification to account for the individual firm-specific effects and ensure heteroscedasticity corrected estimates. The results show that managers must be concerned with the quality of reported earnings, as it can affect positively firms’ financial performance, especially regarding accruals quality. Persistence, predictability, smoothness, timeliness and conservatism are shown not to exert significant influence on financial performance in the sample. This work contributes not only as a literature review on these thematic but also to firms’ managers and stakeholders, who have information that helps them select strategies that guarantee earnings quality and improve firms’ financial performance. This study proposed an econometric model that studies the relationship between earnings quality (using several proxies for it) and financial performance that can be applied to all companies.Does earnings quality impact firms’ performance? The case of Portuguese SMEs from the mold sector
Ana Filipa Duarte, Inês Lisboa, Pedro Carreira
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to study the impact of earnings quality on firms’ financial performance.

An unbalanced panel data of 237 small- and medium-sized Portuguese companies from the mold industry, using 2010–2018 yearly data was analyzed. While most studies focus only on earnings management when assessing earnings quality, in this study six proxies for earnings quality are used, namely, accruals quality (a proxy for earnings management), earnings persistence, earnings predictability, earnings smoothness, earnings timeliness and earnings conservatism. Moreover, two proxies of financial performance are considered, the return on assets and the economic value added. An econometric model was estimated using either a fixed-effects or a random-effects specification to account for the individual firm-specific effects and ensure heteroscedasticity corrected estimates.

The results show that managers must be concerned with the quality of reported earnings, as it can affect positively firms’ financial performance, especially regarding accruals quality. Persistence, predictability, smoothness, timeliness and conservatism are shown not to exert significant influence on financial performance in the sample.

This work contributes not only as a literature review on these thematic but also to firms’ managers and stakeholders, who have information that helps them select strategies that guarantee earnings quality and improve firms’ financial performance.

This study proposed an econometric model that studies the relationship between earnings quality (using several proxies for it) and financial performance that can be applied to all companies.

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Does earnings quality impact firms’ performance? The case of Portuguese SMEs from the mold sector10.1108/JFRA-12-2021-0444Journal of Financial Reporting and Accounting2022-05-23© 2022 Emerald Publishing LimitedAna Filipa DuarteInês LisboaPedro CarreiraJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-05-2310.1108/JFRA-12-2021-0444https://www.emerald.com/insight/content/doi/10.1108/JFRA-12-2021-0444/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
Capital structure decisions and environmental, social and governance performance: insights from Jordanhttps://www.emerald.com/insight/content/doi/10.1108/JFRA-12-2021-0453/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThis study aims to explore the impact of capital structure (CS), including total debts, short-term debt, long-term debt and total shareholder equity, on environmental, social and governance (ESG) performance in the context of Jordan. To achieve the study’s objectives, the authors used the content analysis approach and the longitudinal data generated from the annual reports of 51 industrial companies listed on the Amman Stock Exchange for the period 2012–2020. The findings show that debt financing enhances ESG performance in all dimensions, while financing by equity did not affect ESG. Consequently, Jordanian companies’ managers are trying to reduce agency costs by investing in ESG activities. In addition, companies are focusing on debt financing instead of equity to achieve their financial as well as nonfinancial goals. This is because the opportunism of new shareholders will likely lead to a focus on maximizing their value at the expense of the broader group of stakeholders, and this will adversely affect companies’ ESG performance. Therefore, debt financing limits shareholder control. To the best of the authors’ knowledge, this is the first examination of the impact of CS financing choices on ESG performance. Thus, this study has important implications for the decisions of executives, policymakers, shareholders and lenders, as it enables them to better understand the linkage between CS and ESG.Capital structure decisions and environmental, social and governance performance: insights from Jordan
Hamzeh Al Amosh, Saleh F.A. Khatib, Amneh Alkurdi, Ayman Hassan Bazhair
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

This study aims to explore the impact of capital structure (CS), including total debts, short-term debt, long-term debt and total shareholder equity, on environmental, social and governance (ESG) performance in the context of Jordan.

To achieve the study’s objectives, the authors used the content analysis approach and the longitudinal data generated from the annual reports of 51 industrial companies listed on the Amman Stock Exchange for the period 2012–2020.

The findings show that debt financing enhances ESG performance in all dimensions, while financing by equity did not affect ESG. Consequently, Jordanian companies’ managers are trying to reduce agency costs by investing in ESG activities. In addition, companies are focusing on debt financing instead of equity to achieve their financial as well as nonfinancial goals. This is because the opportunism of new shareholders will likely lead to a focus on maximizing their value at the expense of the broader group of stakeholders, and this will adversely affect companies’ ESG performance. Therefore, debt financing limits shareholder control.

To the best of the authors’ knowledge, this is the first examination of the impact of CS financing choices on ESG performance. Thus, this study has important implications for the decisions of executives, policymakers, shareholders and lenders, as it enables them to better understand the linkage between CS and ESG.

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Capital structure decisions and environmental, social and governance performance: insights from Jordan10.1108/JFRA-12-2021-0453Journal of Financial Reporting and Accounting2022-06-01© 2022 Emerald Publishing LimitedHamzeh Al AmoshSaleh F.A. KhatibAmneh AlkurdiAyman Hassan BazhairJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-06-0110.1108/JFRA-12-2021-0453https://www.emerald.com/insight/content/doi/10.1108/JFRA-12-2021-0453/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
The impact of Tier 1 sukuk (Islamic bonds) on the profitability of UAE Islamic bankshttps://www.emerald.com/insight/content/doi/10.1108/JFRA-12-2021-0461/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestThe choice between different financing sources is governed by a number of finance theories, particularly, trade-off theory and pecking order theory. However, the special characteristics of Islamic finance, which forces the exclusion of conventional bonds, leave Islamic banks with limited number of alternatives. Tier 1 sukuk are distinguished type of sukuk that combines the features of conventional bonds and stocks. This paper aims to answer the following question: Does the issuance of Tier 1 sukuk positively affect Islamic banks’ profitability or is their impact concentrated on enhancing Islamic banks’ capital adequacy ratios? The data set used in this study consists of all United Arab Emirates (UAE) Islamic banks that issued Tier 1 sukuk over the period 2010–2020. Pooled and fixed effects panel regressions of Tier 1 sukuk and other control variables on three proxies of Islamic banks’ profitability were run. The selection of fixed-effect model is based on Hausman test, redundant fixed effects and likelihood ratio test. This study reveals novel findings. Tier 1 sukuk increases both earnings per share (EPS) and capital adequacy ratios. That is, this study finds that there is a positive significant impact of Tier 1 sukuk on EPS, which indicates that issuing more Tier 1 sukuk will generate more return to shareholders in terms of higher EPS because of the lower cost of Tier 1 sukuk compared to equity. However, this study finds that there is an insignificant impact of Tier on sukuk on both return on assets and return on equity. Hence, it is concluded that Tier 1 sukuk does not increase the risk appetite of UAE Islamic banks. Tier 1 sukuk is a niche instrument that has been recently used by Islamic banks. Hence, there are a limited number of Islamic banks that have issued this type of sukuk and consequently limited number of observations. Therefore, with the increased use of this instrument, a larger set of data will be available for examination. In addition, future research could examine the relationship between issuing Tier 1 sukuk and profitability in other countries where such sukuk have loss absorption feature. The impact of other types of sukuk, such as liability sukuk, on Islamic banks’ profitability could also be an interesting field of study. This study recommends Islamic banks to issue more Tier 1 sukuk to enhance their profitability indicators while meeting Basel III accord. This study also recommends investors to purchase the stocks of Islamic banks that issue Tier 1 sukuk because they are able to offer them higher EPS. The authors advise the UAE regulators to allow Islamic banks to issue Tier 1 sukuk with loss absorption feature to enable Islamic banks engage in more risky activities that usually provide larger profits. This study also suggests that the Islamic Financial Services Board (IFSB) reclassifies Tier 1 sukuk, with loss absorption feature, within the highest quality of capital, common equity Tier 1, to encourage Islamic banks to issue this type of sukuk, especially Basel III accord and IFSB 15 require higher ratios of common equity Tier 1 to risk-weighted assets. This research contributes to the existing literature in two ways. First, it adds to the existing literature on the impact of sukuk on Islamic banks profitability. That is, contrary to prior studies that merely investigate the impact of issuing ordinary sukuk on profitability, this study explores a distinguished type of sukuk, that is Tier 1 sukuk, that has been surprisingly ignored so far. Second, this study shows that it is not only capital adequacy ratios that have improved as a result of issuing Tier 1 sukuk but also Tier 1 sukuk reduce the cost of capital of UAE Islamic banks which has been reflected in a higher profitability proxied by EPS. Hence, these sukuk serve a dual function for Islamic banks by improving both capital adequacy and profitability ratios.The impact of Tier 1 sukuk (Islamic bonds) on the profitability of UAE Islamic banks
Alaa Salhani, Sulaiman Mouselli
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

The choice between different financing sources is governed by a number of finance theories, particularly, trade-off theory and pecking order theory. However, the special characteristics of Islamic finance, which forces the exclusion of conventional bonds, leave Islamic banks with limited number of alternatives. Tier 1 sukuk are distinguished type of sukuk that combines the features of conventional bonds and stocks. This paper aims to answer the following question: Does the issuance of Tier 1 sukuk positively affect Islamic banks’ profitability or is their impact concentrated on enhancing Islamic banks’ capital adequacy ratios?

The data set used in this study consists of all United Arab Emirates (UAE) Islamic banks that issued Tier 1 sukuk over the period 2010–2020. Pooled and fixed effects panel regressions of Tier 1 sukuk and other control variables on three proxies of Islamic banks’ profitability were run. The selection of fixed-effect model is based on Hausman test, redundant fixed effects and likelihood ratio test.

This study reveals novel findings. Tier 1 sukuk increases both earnings per share (EPS) and capital adequacy ratios. That is, this study finds that there is a positive significant impact of Tier 1 sukuk on EPS, which indicates that issuing more Tier 1 sukuk will generate more return to shareholders in terms of higher EPS because of the lower cost of Tier 1 sukuk compared to equity. However, this study finds that there is an insignificant impact of Tier on sukuk on both return on assets and return on equity. Hence, it is concluded that Tier 1 sukuk does not increase the risk appetite of UAE Islamic banks.

Tier 1 sukuk is a niche instrument that has been recently used by Islamic banks. Hence, there are a limited number of Islamic banks that have issued this type of sukuk and consequently limited number of observations. Therefore, with the increased use of this instrument, a larger set of data will be available for examination. In addition, future research could examine the relationship between issuing Tier 1 sukuk and profitability in other countries where such sukuk have loss absorption feature. The impact of other types of sukuk, such as liability sukuk, on Islamic banks’ profitability could also be an interesting field of study.

This study recommends Islamic banks to issue more Tier 1 sukuk to enhance their profitability indicators while meeting Basel III accord. This study also recommends investors to purchase the stocks of Islamic banks that issue Tier 1 sukuk because they are able to offer them higher EPS. The authors advise the UAE regulators to allow Islamic banks to issue Tier 1 sukuk with loss absorption feature to enable Islamic banks engage in more risky activities that usually provide larger profits. This study also suggests that the Islamic Financial Services Board (IFSB) reclassifies Tier 1 sukuk, with loss absorption feature, within the highest quality of capital, common equity Tier 1, to encourage Islamic banks to issue this type of sukuk, especially Basel III accord and IFSB 15 require higher ratios of common equity Tier 1 to risk-weighted assets.

This research contributes to the existing literature in two ways. First, it adds to the existing literature on the impact of sukuk on Islamic banks profitability. That is, contrary to prior studies that merely investigate the impact of issuing ordinary sukuk on profitability, this study explores a distinguished type of sukuk, that is Tier 1 sukuk, that has been surprisingly ignored so far. Second, this study shows that it is not only capital adequacy ratios that have improved as a result of issuing Tier 1 sukuk but also Tier 1 sukuk reduce the cost of capital of UAE Islamic banks which has been reflected in a higher profitability proxied by EPS. Hence, these sukuk serve a dual function for Islamic banks by improving both capital adequacy and profitability ratios.

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The impact of Tier 1 sukuk (Islamic bonds) on the profitability of UAE Islamic banks10.1108/JFRA-12-2021-0461Journal of Financial Reporting and Accounting2022-04-28© 2022 Emerald Publishing LimitedAlaa SalhaniSulaiman MouselliJournal of Financial Reporting and Accountingahead-of-printahead-of-print2022-04-2810.1108/JFRA-12-2021-0461https://www.emerald.com/insight/content/doi/10.1108/JFRA-12-2021-0461/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2022 Emerald Publishing Limited
Auditor’s response to firm’s environmental violations and engagement in supplemental environmental projectshttps://www.emerald.com/insight/content/doi/10.1108/JFRA-12-2023-0739/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatestIn this study, the authors investigate a pressing concern: how auditors react to their clients facing repercussions due to environmental violations. More specifically, this study aims to examine how environmental engagements, which carry potential risks and liabilities, influence auditors’ decision-making and fee structure. This study uses unique, reliable and actual violation data from the United States Environmental Protection Agency (US-EPA) from 2000 to 2015, focusing on clients involved in environmental violations that led to legal prosecution and penalties and those who subsequently engaged in voluntary supplemental environmental projects (SEPs). The authors use the ordinary least squares method to test the authors’ main research question and later use propensity score matching and alternate data source (ASSET4) to check the robustness of the authors’ results. The authors find that firms with environmental violations are more susceptible to auditor resignation. Moreover, the environmental violator firms that maintain their engagement with auditors pay significantly higher audit fees compared to non-environmental violator firms. Furthermore, these environmental violator firms also face extended audit report delays and take longer to appoint a new auditor. This study provides an additional consequence of environmental violations, namely, increased chances of auditor resignation and higher audit fees, alongside the penalties imposed by the US-EPA. Moreover, the authors’ findings position environmental violations and participation in SEPs as important factors in auditors’ business risk assessment.Auditor’s response to firm’s environmental violations and engagement in supplemental environmental projects
Ammad Ahmed, Atia Hussain
Journal of Financial Reporting and Accounting, Vol. ahead-of-print, No. ahead-of-print, pp.-

In this study, the authors investigate a pressing concern: how auditors react to their clients facing repercussions due to environmental violations. More specifically, this study aims to examine how environmental engagements, which carry potential risks and liabilities, influence auditors’ decision-making and fee structure.

This study uses unique, reliable and actual violation data from the United States Environmental Protection Agency (US-EPA) from 2000 to 2015, focusing on clients involved in environmental violations that led to legal prosecution and penalties and those who subsequently engaged in voluntary supplemental environmental projects (SEPs). The authors use the ordinary least squares method to test the authors’ main research question and later use propensity score matching and alternate data source (ASSET4) to check the robustness of the authors’ results.

The authors find that firms with environmental violations are more susceptible to auditor resignation. Moreover, the environmental violator firms that maintain their engagement with auditors pay significantly higher audit fees compared to non-environmental violator firms. Furthermore, these environmental violator firms also face extended audit report delays and take longer to appoint a new auditor.

This study provides an additional consequence of environmental violations, namely, increased chances of auditor resignation and higher audit fees, alongside the penalties imposed by the US-EPA. Moreover, the authors’ findings position environmental violations and participation in SEPs as important factors in auditors’ business risk assessment.

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Auditor’s response to firm’s environmental violations and engagement in supplemental environmental projects10.1108/JFRA-12-2023-0739Journal of Financial Reporting and Accounting2024-02-28© 2024 Emerald Publishing LimitedAmmad AhmedAtia HussainJournal of Financial Reporting and Accountingahead-of-printahead-of-print2024-02-2810.1108/JFRA-12-2023-0739https://www.emerald.com/insight/content/doi/10.1108/JFRA-12-2023-0739/full/html?utm_source=rss&utm_medium=feed&utm_campaign=rss_journalLatest© 2024 Emerald Publishing Limited