Search results for: corporate reporting

Authors: Adhila Sandra Devy, Evangeline Syalomita Silitonga

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The landscape of corporate governance and accountability has led to the emergence of Integrated Reporting (IR) in response to the shortcomings of traditional reporting frameworks. Developed by The International Integrated Reporting Council (IIRC), IR aims to offer stakeholders a comprehensive view of a company’s performance by integrating financial and non-financial disclosures. This study analyzes literature on Integrated Reporting and Corporate Financial Performance from 2013 to 2024, employing a descriptive analysis methodology. 31 relevant articles were gathered from various sources, indicating a positive correlation between integrated reporting and financial performance, albeit without conclusive evidence of long-term impact.

Keywords: integrated reporting, corporate financial performance, corporate performance, firm performance, bibliometric analysis

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Authors: Uwalomwa Uwuigbe, Olubukola Ranti Uwuigbe, Jinadu Olugbenga, Otekunrin Adegbola

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Corporate reporting has evolved over the years resulting from criticisms of the precedent by shareholders, stakeholders and other relevant financial institutions. Integrated reporting has become a globalized corporate reporting style, with its adoption around the world occurring rapidly to bring about an improvement in the quality of corporate reporting. While some countries have swiftly clinched into reporting in an integrated manner, others have not. In addition, there are ample research that has been conducted on the benefits of adopting integrated reporting, however, the same is not true in developing economies like Nigeria. Hence, this study basically examined the factors determining the adoption of integrated reporting in Nigeria. One hundred (100) copies of questionnaire was administered to financial managers of 20 selected listed companies in the Nigeria stock exchange market. The data obtained was analysed using the Spearman Rank Order Correlation via the Statistical Package for Social Science. This study observed that there is a significant relationship between the social pressures of isomorphic changes and integrated reporting adoption in Nigeria. The study recommends the need for an enforcement mechanism to be put in place while considering the adoption of integrated reporting in Nigeria, enforcement mechanisms should put into consideration the investors demand, the level of economic development, and the degree of corporate social responsibility.

Keywords: corporate social responsibility, isomorphic, integrated reporting, Nigeria, sustainability

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Authors: Raif Parlakkaya, Umran Kahraman, Huseyin Cetin

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Internet financial reporting and corporate governance issues are in the focus of academic and professional studies due to their attributed importance by stakeholders of corporations. Major aim of this study is to reveal the relationship between internet financial reporting which is held as dependent variable and some indicators of corporate governance such as the ratio of managerial ownership, blockholder ownership, number of independent members in the board of directors, frequency of meetings by audit committee and education level of audit committee members which are held as independent variables. Main purpose is to reveal the effect of corporate governance on the voluntary efforts of Internet Financial reporting. The scope of the research is limited to the Turkish Corporations listed in Borsa Istanbul (Istanbul Stock Exchange) and findings which are generated by means of SPSS software are revealed in results section and interpreted in conclusions.

Keywords: audit committee, corporate governance, internet financial reporting, managerial ownership

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Authors: Patrick Velte

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Sustainability reporting has become a central element of modern corporate governance practice. This paper is the first to recognize supervisory board independence, sustainable expertise and gender diversity in two European two tier countries and their impact on sustainability reporting quality. For a sample of 188 German and Austrian companies which are listed at the Prime Standard of the Frankfurt and Vienna Stock Exchange for the business years 2012-2013, descriptive findings show that CSR reporting quality is still low in both countries. Furthermore, multiple regressions state that independent and female members in the supervisory board do have a positive impact on CSR reporting quality in Germany and Austria. However, the existence of sustainable experts in the supervisory board both in Germany and Austria shows a positive but insignificant impact. Our findings suggest that the current European corporate governance regulations can be a useful instrument to increase the quality of modern CSR reporting for the stakeholders.

Keywords: sustainability reporting, corporate governance, gender diversity, board independence

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Authors: Anocha Rojanapanich

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The objective of this research is to investigate the effects of earnings management on corporate transparency of the company in Dusit area workplace via financial reporting reliability and stakeholder acceptance as independent variable. And the company in Dusit are are taken as the population and sample. The questionnaire is used to collect data. Exploratory Factor Analysis is implemented to ensure construct validity, and correlation statistic is selected to test the relationship among all variable and the ordinary least squares regression is used to explore the hypothesized. The results show that earnings management has a significant and negative impact on financial reporting reliability, stakeholder acceptance, and corporate transparency. Both financial reporting reliability and stakeholder acceptance have an important and positive effect on corporate transparency, and they are then mediators of the earnings management-corporate transparency relationships.

Keywords: dusit area workplace, earnings management, financial report, business and marketing management

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Authors: Chu Chen, Giorgio Gotti, Tony Kang, Michael Wolfe

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This study examines the role of codes of ethics in reducing the extent to which managers’ act opportunistically in reporting earnings. Corporate codes of ethics, by clarifying the boundaries of ethical corporate behaviors and making relevant social norms more salient, have the potential to deter managers from engaging in opportunistic financial reporting practices. In a sample of international companies, we find that the quality of corporate codes of ethics is associated with higher earnings quality, i.e., lower discretionary accruals. Our results are confirmed for a subsample of firms more likely to be engaging in opportunistic reporting behavior, i.e., firms that just meet or beat analysts’ forecasts. Further, codes of ethics play a greater role in reducing earnings management for firms in countries with weaker investor protection mechanisms. Our results suggest that corporate codes of ethics can be a viable alternative to country-level investor protection mechanisms in curbing aggressive reporting behaviors.

Keywords: corporate ethics policy, code of ethics, business ethics, earnings discretion, accruals

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Authors: Samrina Jafrin, Till Talaulicar

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This study investigates stakeholder perceptions of environmental, social, and governance (ESG) reporting patterns and their effectiveness in enhancing trust and transparency. Utilizing a multi-method approach, including experimental research and systematic literature review, insights are gathered from investors, employees, customers, suppliers, managers, and community members. The findings reveal diverse stakeholder expectations and perceptions and emphasize the importance of effective ESG reporting strategies in building credibility and trust. This research contributes to the academic discourse on corporate sustainability reporting and provides practical recommendations for optimizing ESG reporting practices.

Keywords: ESG reporting, stakeholder perceptions, corporate sustainability, transparency, trust

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Authors: Ruba Hamed, Khaled Hussainey, Basiem Al-Shattarat, Wasim Al-Shattarat

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This paper examines how the influence of mandating corporate social responsibility reporting (CSR) on subsequent financial performance through accounting-based measures and market-based measures. We provide evidence about the negative impact of reporting CSR voluntarily on the firm’s future performance due to the increased spending on and costs related to such activities. On the contrary, mandating CSR reporting enhances firms’ future performance by signalling to the market about the firm’s positive stance towards sustainability issues in the UK. Our findings are of interest to regulation setters and stakeholders with respect to mandatory CSR reporting and provide further insight and feedback into accounting and reporting practices.

Keywords: accounting-based performance, mandatory CSR, mandatory regulation, market-based performance

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Authors: Philemon Rakoto

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Most executive compensation packages consist of four major components: base fixed salary, annual and long-term non-equity incentive plans, share-based and option-based awards and pension value. According to agency theory, the relative composition of executive compensation packages is one of the mechanisms that firms use to align the interests of executives and shareholders in order to mitigate agency costs. This paper tests the effect of the relative composition of executive compensation packages on financial reporting quality. Financial reporting quality is measured by the value relevance of accounting earnings. Corporate governance is a moderating variable in the model. Using data from Canadian firms composing S&P/TSX index of the year 2013 and governance scores based on Board Games, the analysis shows that, only for firms with good governance, there is an optimal level of the proportion of executive equity-based compensation in relation to total compensation that enhances the quality of financial reporting.

Keywords: Canada, corporate governance, executive compensation packages, financial reporting quality

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Authors: Jamila Garba Audu, Shehu Usman Hassan

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The widespread failure in the financial information quality has created the need to improve the financial information quality and to strengthen the control of managers by setting up good firms structures. Published accounting information in financial statements is required to provide various users - shareholders, employees, suppliers, creditors, financial analysts, stockbrokers and government agencies – with timely and reliable information useful for making prudent, effective and efficient decisions. The relationship between corporate governance and performance to financial reporting quality is imperative; this is because despite rapid researches in this area the findings obtained from these studies are constantly inconclusive. Data for the study were extracted from the firms’ annual reports and accounts. After running the OLS regression, a robustness test was conducted for the validity of statistical inferences; the data was empirically tested. A multiple regression was employed to test the model as a technique for data analysis. The results from the analysis revealed a negative association between all the regressors and financial reporting quality except the performance of listed manufacturing firms in Nigeria. This indicates that corporate governance plays a significant role in mitigating earnings management and improving financial reporting quality while performance does not. The study recommended among others that the composition of audit committee should be made in accordance with the provision for code of corporate governance which is not more than six (6) members with at least one (1) financial expert.

Keywords: corporate governance, financial reporting quality, manufacturing firms, Nigeria, performance

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Authors: Pradip Kumar Das

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India is a developing country and is also one of the most industrialized developing countries of the world. In post-independence period, industry has grown rapidly in India and with industrialization corporate sector in the country has been growing day after day. Nowadays, the investment is not limited to be shareholders alone, apart from the shareholders the common people of the society have also started investing in shares of the corporate sectors. Thus, the responsibilities of the corporate sectors have increased much. Corporate financial reporting refers to a system which provides valuable information to different types of users in the society for taking resourceful decisions with regards to investment policy, organization credit worthiness, profitability, liquidity, provision of taxation etc. The quality of information available to different users fosters the efficient allocation of resources which are very urgent for economic development of a country like India. It is the responsibility of the management of the corporate sector to convey reliable and authentic information with the help of generally accepted accounting principles. Corporate sectors which disclose information through annual reports should be sufficient enough for the purpose of bringing out the salient features relating to business performances and other activities. However, the disclosures practices of the corporate sectors though annual reports have undergone several major changes from time to time. Many a time, these vital changes are in the fashion of presenting information in the annual reports and addition of so many non-statutory disclosures of the company. Very often managements of the corporate sectors are blamed for concealing true picture which is not desirable at all. The corporate financial reporting practice which in the current period has gained a place of prime importance suffers from certain limitations and invites question from the public about its reliability. Thus, the wide gap created by management between the exhibited picture and the real picture sometimes attains to such extent that the purpose of the reporting practice loses its importance. The requirement of full and adequate disclosure of information including information relating to human resources in the annual report in free trade economy of India helps the prospective investors to select the best portfolio of their investments. This paper is a reflection of a modest attempt of the author to highlight the corporate reporting practices followed in India. A cursory glance of the conceptual study shows limitations along with reliability of the reporting practices and suggests measures to overcome the shortcomings of the financial reporting practices.

Keywords: corporate enterprise, cursory glance, portfolio, yawning gap

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Authors: Shibly Abdullah

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This paper provides an overview of fundamental philosophical and functional differences in conventional and Islamic accounting. The aim of this research is to undertake a detailed analysis focus on specific illustrations drawn from both these systems and highlight how these differences implicate in recording financial transactions and preparation of financial reports for a range of stakeholders. Accounting as being universally considered as a platform for providing a ‘true and fair’ view of corporate entities can be challenged in the current world view, as the business environment has evolved and transformed significantly. Growth of the non-traditional corporate entity such as Islamic financial institutions, fundamentally questions the applicability of conventional accounting standards in preparation of Shariah-compliant financial reporting. Coupled with this, there are significant concerns about the wider applicability of Islamic accounting standards and framework in order to achieve reporting practices satisfying the information needs generally. Against the backdrop of such a context, this paper raises fundamental question as to how potential convergence could be achieved between these two systems in order to provide users’ a transparent and comparable state of financial information resulting in an alternative framework of financial reporting.

Keywords: accounting, conventional accounting, corporate reporting, Islamic accounting

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Authors: Cesar Julio Recalde

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Background: The role of intangible assets in today´s society is undeniable and continuously growing. More than 80% of corporate market is related to intellectual capital(IC). However, corporate governance principles and practices seem strongly based and oriented towards tangible assets. The impact of intangible assets on corporate governance might require prevention and adaptative actions. Adherence to voluntary mechanisms of intellectual capital reporting (ICR) seems to be a gateway towards adapting corporate governance to intangible assets influence and a conceptual cornerstone. The impact of adherence to intellectual capital reporting on corporate governance and performance needs to be evaluated. Purposes: This work has a sequential two folded purpose: (1) exploring the influences exerted by IC on corporate governance theory and practice, and within that context (2) analyzing the impact of adherence to voluntary mechanisms of ICR on corporate governance. Design and summary: This work employs the theory of the firm and agency theory in order to conceptually explore the effects of each dimension of IC on key corporate governance issues, namely property rights and control by shareholders and residual claims by stakeholders, fiduciary duties of management and the board, opportunistic behavior and transparency. A comprehensive IC taxonomy and map is presented. Within the resulting context, internal and external impact of ICR on corporate governance and performance is conceptually analyzed. IRC constraint and barriers are identified. Intellectual liabilities are presented within the context of IRC. Finally, IRC regulatory framework is surveyed. Findings: Relevant conclusions were rendered on the influence of intellectual capital on corporate governance. Sufficient evidence of a positive impact of IRC on corporate governance and performance was found. Additionally, it was found that IRC exerts a leveraging effect on IC itself. Intellectual liabilities are insufficiently researched and seem to have a relevant importance on IC measuring. IRC regulatory framework was found to be insufficiently developed to capture the essence of intangible assets and to meet corporate governance challenges facing IC. Originality: This work develops a progressive approach to conceptually analyze the mutual influences between IC and corporate governance. An epistemic ideogram represents the intersection of analyzed theories. An IC map is presented. The relatively new topic of intellectual liabilities is conceptually analyzed in the context of IRC. Social liabilities and client liabilities are presented.

Keywords: corporate governance, intellectual capital, intellectual capital reporting, intellectual assets, intellectual liabilities, voluntary mechanisms, regulatory framework

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Authors: Katarzyna Olejko

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The need to redefine the goals and adapt the operational activities carried out in accordance with the concept of sustainable management to these goals results in the increasing importance of information on the company's activities perceived from the perspective of the effectiveness and efficiency of environmental goals implementation. The narrow scope of reporting data on a company's impact on the environment is not adequate to meet the information needs of modern investors. Reporting obligations are therefore imposed on companies in order to increase the effectiveness of corporate governance and to improve the process of assessing the achievement of environmental goals. The non-financial reporting obligations introduced in Polish legislation increased the scope of reported information. However, the lack of detailed guidelines on the method of reporting resulted in a large diversification of the scope of non-financial information, making it impossible to compare the data presented by companies. The source of information regarding the level of the implementation of standards in Environmental, social and corporate governance (ESG) is the report on compliance with best practices published by the Warsaw Stock Exchange. The document Best Practices of Warsaw Stock Exchange (WSE) Listed Companies (2021), amended by the WSE in 2021, includes the rules applicable to this area (ESG). The aim of this article is to present the level of compliance with good practices in the area of ESG by selected companies listed on the Warsaw Stock Exchange The research carried out as part of this study, which was based on information from reports on the compliance with good practices of companies listed on the Warsaw Stock Exchange that was made available in the good practice scanner, have revealed that good practices in the ESG area are implemented by companies to a limited extent. The level of their application in comparison with other rules is definitely lower. The lack of experience and clear guidelines on ESG reporting may cause some confusion, which is why conscious investors and reporting companies themselves are pinning their hopes on the Corporate Sustainability Reporting Directive (CSRD) adopted by European Parliament.

Keywords: reporting, ESG, corporate governance, best practices

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Authors: Santi Gopal Maji, R. A. J. Syngkon

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The changing attitude of the corporate enterprises from maximizing economic benefit to corporate sustainability after the publication of Brundtland Report has attracted the interest of researchers to investigate the sustainability practices of firms and its impact on financial performance. To enrich the empirical literature in Asian context, this study examines the disclosure pattern of corporate sustainability and the influence of sustainability reporting on financial performance of firms from four Asian countries (Japan, South Korea, India and Indonesia) that are publishing sustainability report continuously from 2009 to 2016. The study has used content analysis technique based on Global Reporting Framework (3 and 3.1) reporting framework to compute the disclosure score of corporate sustainability and its components. While dichotomous coding system has been employed to compute overall quantitative disclosure score, a four-point scale has been used to access the quality of the disclosure. For analysing the disclosure pattern of corporate sustainability, box plot has been used. Further, Pearson chi-square test has been used to examine whether there is any difference in the proportion of disclosure between the countries. Finally, quantile regression model has been employed to examine the influence of corporate sustainability reporting on the difference locations of the conditional distribution of firm performance. The findings of the study indicate that Japan has occupied first position in terms of disclosure of sustainability information followed by South Korea and India. In case of Indonesia, the quality of disclosure score is considerably less as compared to other three countries. Further, the gap between the quality and quantity of disclosure score is comparatively less in Japan and South Korea as compared to India and Indonesia. The same is evident in respect of the components of sustainability. The results of quantile regression indicate that a positive impact of corporate sustainability becomes stronger at upper quantiles in case of Japan and South Korea. But the study fails to extricate any definite pattern on the impact of corporate sustainability disclosure on the financial performance of firms from Indonesia and India.

Keywords: corporate sustainability, quality and quantity of disclosure, content analysis, quantile regression, Asian countries

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Authors: Anocha Rojanapanich

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This research investigates the effect of financial accounting information and non-financial accounting reports on corporate credibility via strength of board of directors and market environment volatility as moderating effect. Data in this research is collected by questionnaire form non-financial companies listed on the Stock Exchange of Thailand. Multiple regression statistic technique is used for analyzing the data. Results find that firms with greater financial accounting information reports and non-financial accounting information reports will gain greater corporate credibility. Therefore, the corporate reporting has the value for the firms. Moreover, the strength of board of directors will positively moderate the financial and non-financial accounting information reports and corporate credibility relationship. And market environment volatility will negatively moderate the financial and nonfinancial accounting information reports and corporate credibility relationship and the contribution of accounting information reports on corporate credibility is generated to the corporate image. That is the corporate image has affected by corporate credibility.

Keywords: corporate credibility, financial and non-financial reports, firms performance, corporate image

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Authors: Sana Masmoudi, Yosra Makni

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Regulators highlight the importance of the Audit Committee (AC) as a key internal corporate governance mechanism. One of the most important roles of this committee is to oversee the financial reporting process. The purpose of this paper is to examine the link between the characteristics of an audit committee and the financial reporting quality by investigating whether the formation of audit committees and their characteristics are associated with improved financial reporting quality. This study provides empirical evidence of the association between audit committee independence, financial expertise, gender diversity, and meetings and Real Earnings Management (REM) as a proxy of financial reporting quality. Using data from, with a sample of 80 companies listed on the Amsterdam Stock Exchange during 2010-2017, the study finds that independence and AC Gender diversity are strongly related to financial reporting quality. In fact, these two characteristics constrain REM. The results also suggest that AC-financial expertise reduces to some extent, the likelihood of engaging in REM. These conclusions provide support then to the audit committee requirement under the Dutch Corporate Governance Code rules regarding gender diversity and AC meetings.

Keywords: audit committee, financial expertise, independence, real earnings management

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Authors: Kari M. Solomon

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Companies with a culture accepting of change management and performance excellence are better suited to determine their sustainability performance and impacts. A mature corporate culture supportive of performance excellence is better positioned to integrate sustainability management tools into their standard business strategy. Companies use various sustainability management tools and reporting standards to communicate levels of sustainability performance to their stakeholders, more often focusing on shareholders and investors. A research gap remains in understanding how companies adapt business excellence models to define corporate sustainability performance. A content analysis of medium-sized enterprises using corporate sustainability reports and business excellence models reveals the challenges and opportunities of reporting sustainability performance in the context of organizational excellence. The outcomes of this content analysis contribute knowledge on the resources needed for companies to build sustainability performance management systems integral to existing management systems. The findings of this research inform academic research areas of corporate sustainability performance, the business community contributing to sustainable development initiatives, and integrating sustainable development issues into business excellence models. There are potential research links between sustainability performance management and the alignment of the United Nations Sustainable Development Goals (UN SDGs) when organizations promote a culture of performance or business excellence.

Keywords: business excellence, corporate sustainability, performance excellence, sustainability performance

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Authors: Petra F. A. Dilling, Sinan Caykoylu

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The aim of this study was to shed light on the understanding of the factors determining a company’s disclosure on climate change reporting. The underlying study examines the effect of gender diversity and the mediating effect of female representation in management and on the board of directors and the existence of a dedicated sustainability board committee. To test the study’s objectives, the authors use a global sample of the largest companies and their reporting for the year 2020. The results suggest that corporate female participation has a significant influence on the quality of climate change reporting. In addition, having a dedicated sustainability board committee also significantly impacts the non-financial disclosure of climate change information.

Keywords: climate change, non-financial reporting, governance, board diversity, sustainability, CSR

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Authors: Wanda Luen-Wun Siu, Xiaowen Zhang

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This paper offered the primary methodical proof on how CSR reporting related to enterprise earnings in listed firms in China in light of most evidence focusing on cross-sectional data or data in a short span of time. Using full economic and business panel data on China’s publicly listed enterprise from 2006 to 2020 over two decades in the China Stock Market and Accounting Research database, we found initial evidence of significant direct relations between CSR reporting and firm corporate performance in both state-owned and privately owned firms over this period, supporting the stakeholder theory. Results also revealed that state-owned enterprises performed as well as private enterprises in the current period. But private enterprises performed better than state-owned enterprises in the subsequent years. Moreover, the release of social responsibility reports had a more significant impact on the financial performance of state-owned and private enterprises in the current period than in the subsequent periods. Specifically, CSR release was not significantly associated with the financial performance of state-owned enterprises on the lag of the first, second, and third periods. But it had an impact on the lag of the first, second, and third periods among private enterprises. Such findings suggested that CSR reporting helped improve the corporate financial performance of state-owned and private enterprises in the current period, but this kind of effect was more significant among private enterprises in the lag periods.

Keywords: China’s listed firms, CSR reporting, financial performance, panel analysis

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Authors: Ramona Zharfpeykan

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The concept of sustainability is generally considered as a key topic in many countries, and sustainability reporting is becoming an important tool for companies to communicate their sustainability plans and performance to their stakeholders. There have been various studies on factors that may influence sustainability reporting in companies. This study examines the possible effect of some of the organisational factors on corporate sustainability reporting. The organisational factors included in this study are a company’s type (public or private), industry, and size as well as managers’ perception of the level of importance of indicators in reporting these indicators. A survey was conducted from 240 Australian and New Zealand companies in various industries. They were asked about their perception of the importance of sustainability indicators in their performance and if they report these indicators. The GRI indicators used to develop the survey. A multiple regression model was developed using reporting strategy score as dependent and type, size, industry categorisation, and managers’ perception of the level of importance of the GRI indicators as independent factors. The results show that among all the factors included in the model, size of a company and the perception of managers of the level of importance of environmental and labour practice indicators can affect the sustainability scores of these companies.

Keywords: sustainability reporting, global reporting initiative, sustainability reporting strategy, organisational features

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Authors: Manaf Bashir

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Corporate social responsibility (CSR) has become a tool for corporations to meet the expectations of different stakeholders about economic, social and environmental issues. It has become indispensable for an organization’s success, positive image and reputation. Equally important is how corporations communicate and report their CSR. Employing the stakeholder theory, the purpose of this research is to analyse CSR content of leading Kuwaiti corporations. No research analysis of CSR reporting has been conducted in Kuwait and this study is an attempt to redress in part this empirical deficit in the country and the region. It attempts to identify the issues and stakeholders of the CSR and if corporations are following CSR reporting standards. By analysing websites, annual and CSR reports of the top 100 Kuwaiti corporations, this study found low mentions of the CSR issues and even lower mentions of CSR stakeholders. Environmental issues were among the least mentioned despite an increasing global concern toward the environment. ‘Society’ was mentioned the most as a stakeholder and ‘The Environment’ was among the least mentioned. Cross-tabulations found few significant relationships between type of industry and the CSR issues and stakeholders. Independent sample t-tests found no significant difference between the issues and stakeholders that are mentioned on the websites and the reports. Only two companies from the sample followed reporting standards and both followed the Global Reporting Initiative. Successful corporations would be keen to identify the issues that meet the expectations of different stakeholders and address them through their corporate communication. Kuwaiti corporations did not show this keenness. As the stakeholder theory suggests, extending the spectrum of stakeholders beyond investors can open mutual dialogue and understanding between corporations and various stakeholders. However, Kuwaiti corporations focus on few CSR issues and even fewer CSR stakeholders. Kuwaiti corporations need to pay more attention to CSR and particularly toward environmental issues. They should adopt a strategic approach and allocate specialized personnel such as marketers and public relations practitioners to manage it. The government and non-profit organizations should encourage the private sector in Kuwait to do more CSR and meet the needs and expectations of different stakeholders and not only shareholders. This is in addition to reporting the CSR information professionally because of its benefits to corporate image, reputation, and transparency.

Keywords: corporate social responsibility, environmental responsibility, Kuwait, stakeholder theory

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Authors: Todd Sayre

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The proprietary balance sheet represents equity as the shareholders’ net worth. FASB (1985) codified the proprietary format with the justification that shareholders, like partners and proprietors, owned and had “ownership interests” in the net assets. The results of the hypotheses tests imply that shareholders do not resemble owners nor do they have ownership interests in the net assets. Accordingly, the paper argues that replacing the proprietary format with an entity format in corporate reporting would not only help corporate reports to be more representationally faithful, but would also help people to recognize that are entities onto themselves.

Keywords: proprietary theory, entity theory, earned capital approach, corporate governance

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Authors: Eko Budi Santoso

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There is a growing interest in Corporate Social Responsibility (CSR) issues in developing countries such as Indonesia. Firms disclose their CSR activities, and some provide assurance to gain recognition as socially responsible firms. However, several of those socially responsible firms involve in tax scandals and raise a question of whether CSR disclosure is used to disguise firm misconduct or as a reflection of socially responsible firms. Specifically, whether firms engage in CSR disclosure and its assurance also responsible for their tax matters. This study examines the association between CSR disclosure and tax aggressiveness and the role of sustainability reporting assurance to the association. This research develops a modified index according to global reporting initiatives to measure CSR disclosure and various measurement for tax aggressiveness. Using a sample of Indonesian go public companies issued CSR disclosure, the empirical result shows that there is an association between CSR disclosure and tax aggressiveness. In addition, results also indicate sustainability reporting assurance moderate those association. The findings suggest that stakeholder in developing countries should examine carefully firms with active CSR disclosure before label it as socially responsible firms. JEL Classification: M14

Keywords: CSR disclosure, tax aggressiveness, assurance, business ethics

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Authors: Peter Oyelere, Fernando Zanella

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Corporate governance is one of the most discussed and researched issues in recent times in countries around the world, with different countries developing and adopting different governance structures, models and mechanisms. While the Codes of corporate governance have been weaved into the regulatory fabrics of most countries, it is equally critically important that their mechanisms, procedures and practices be transparent, and be transparently communicated to all stakeholders. The Internet can be a very useful and cost-effective tool for the timely and voluntary communication of corporate governance matters to stakeholders. The current paper details the results of an investigation on the extent of which companies listed in the UAE are using the Internet for communicating corporate governance issues, matters and procedures. We surveyed the websites of companies listed on the two UAE Stock Exchanges – the Abu Dhabi Stock Exchange (ADX) and the Dubai Financial Market (DFM) – to find out their level and nature of usage of the Internet for corporate governance disclosures. Regulatory and policy implications of the results of our investigation, as well as other areas for further studies, are also presented in the paper.

Keywords: corporate governance, internet financial reporting, regulation, transparency, United Arab Emirates

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Authors: Vithaya Intaraphimol

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This research investigates the effect of financial accounting information and non-financial accounting reports on corporate credibility via strength of board of directors and market environment volatility as moderating effect. Data in this research is collected by questionnaire form non-financial companies listed on the Stock Exchange of Thailand. Multiple regression statistic technique is chosen for analyzing the data. The empirical results find that firms with greater financial accounting information reports and non-financial accounting information reports will gain greater corporate credibility. Therefore, the corporate reporting has the value for the firms. Moreover, the strength of board of directors will positively moderate the financial and non-financial accounting information reports and corporate credibility relationship. Whereas, market environment volatility will negatively moderate the financial and nonfinancial accounting information reports and corporate credibility relationship.

Keywords: corporate credibility, financial and non-financial reports, firms performance, economics

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Authors: Omar Juhmani

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This paper examines the relation between internal corporate governance and the level of corporate compliance with mandatory IFRS disclosure requirements. The internal corporate governance is measured by board and audit committee characteristics. Using data from Bahrain Stock Exchange, the results show that board independence is positively and significantly associated with level of compliance with IFRS disclosure requirements. This suggests that internal corporate governance mechanisms are effective in the financial reporting practices by increasing the level of compliance with IFRS disclosures. Also, the results of the regression analyses indicate that two of the control variables; company size and audit firm size are significantly positively associated with the level of corporate compliance with mandatory IFRS disclosure requirements in Bahrain.

Keywords: Bahrain, board and audit committee characteristics, compliance, disclosure, IFRS

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Authors: Qingliang Tang

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The transition from voluntary to mandatory carbon reporting (also refers to climate reporting) poses serious challenges for accounting professionals aiming to support firms in achieving net-zero goals. The accounting literature addresses the topics that are currently bewildering accounting academics and professional accountants on how to make accounting as a useful tool for the management to achieve a carbon neutral business model. This paper explores the evolving role of carbon accounting within corporate financial reporting systems, emphasizing its integration as a crucial component. Key challenges addressed include data availability, climate risk assessment, defining reporting boundaries, selecting appropriate greenhouse gas (GHG) accounting methodologies, and integrating climate-related events into traditional financial statements. A dynamic, integrated carbon accounting framework is proposed to facilitate this transformative process effectively. Furthermore, the paper identifies critical knowledge gaps and sets forth a research agenda aimed at enhancing transparency and relevance in carbon accounting and reporting systems, thereby empowering informed decision-making. The purpose of the paper is to succinctly capture the essence of carbon accounting practice in the transitional period, focusing on the challenges, proposed solutions, and future research directions in the realm of carbon accounting and mandatory climate reporting.

Keywords: mandatory carbon reporting, carbon management, net zero target, sustainability, climate risks

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Authors: Lynn Ruggieri

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The worldwide pandemic has only increased sustainability awareness. The public is demanding that businesses be held accountable for their impact on the environment. While financial data enjoys uniformity in reporting requirements, there are no uniform reporting requirements for non-financial data. Europe is leading the way with some standards being implemented for reporting non-financial sustainability data; however, there is no uniformity globally. And without uniformity, there is not a clear understanding of what information to include and how to disclose it. Sustainability reporting will provide important information to stakeholders and will enable businesses to understand their impact on the environment. Therefore, there is a crucial need for this data. This paper looks at the history of sustainability reporting in the countries of the European Union and throughout the world and makes a case for worldwide reporting requirements for sustainability.

Keywords: financial reporting, non-financial data, sustainability, global financial reporting

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Authors: Ernest Nweke

Abstract:

The work of Professional Accountants and Corporate governance are synonymous and cannot be divorced from each other. Organizations, profit and non-profit alike cannot implement sound corporate practices without inputs from Professional Accountants. In today’s dynamic corporate world, good corporate governance practice is a sine qua non. More so, following the corporate failures of the past decades like Enron and WorldCom, governments around the world, including Mongolia are becoming more proactive in ensuring sound corporate governance mechanisms. In the past fifteen years, the Mongolian government has taken several measures to establish and strengthen internal corporate governance structures in firms. This paper highlights the role of professional accountants and auditors play in ensuring that good corporate governance mechanisms are entrenched in listed companies in Mongolia. Both primary and secondary data are utilized in this research. In collection of primary data, Delphi method was used, securing responses from only knowledgeable senior employees, top managers, and some CEOs. Using this method, a total of 107 top-level company employees and executives randomly selected from 22 companies were surveyed; maximum of 5 and minimum of 4 from each company. These companies cut across several sectors. It was concluded that Professional Accountants play key roles in setting and maintaining firm governance. They do this by ensuring full compliance with all the requirements of good and sound corporate governance, establishing reporting, monitoring and evaluating standards, assisting in the setting up of proper controls, efficient and effective audit systems, sound fraud risk management and putting in place an overall vision for the enterprise. Companies with effective corporate governance mechanisms are usually strong and fraud-resilient. It was also discovered that companies with big 4 audit firms tend to have better governance structures in Mongolia.

Keywords: accountants, corporate disclosure, corporate failure, corporate governance

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