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The price of corporate social irresponsibility in seasoned equity offerings: International evidence The British Accounting Review (IF 4.761) Pub Date : 2024-03-13 Chloe Ho, Eliza Wu, Jing Yu
We examine the impact of poor corporate social responsibility engagement signalled through negative environmental and social (E&S) incidents on equity financing via seasoned equity offerings (SEOs) across 25 countries. The results show that negative E&S incidents significantly aggravate SEO underpricing, thereby increasing the cost of raising equity capital. Managers appear to take the adverse effects
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Hybrid board governance: Exploring the challenges in implementing social impact measurements The British Accounting Review (IF 4.761) Pub Date : 2024-03-05 Anup Banerjee, Martin Carlsson-Wall, Mattias Nordqvist
This paper focuses on hybrid board governance and the challenges faced by the board of directors when implementing social impact measurements. Interviews with 36 board chairs and general secretaries in social hybrids in Sweden show that while boards support social impact measurements, they face obstacles in implementing them. Drawing on the institutional logics framework, we identify three main reasons
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Blockchain and earnings management: Evidence from the supply chain The British Accounting Review (IF 4.761) Pub Date : 2024-02-23 Donald Autore, Huimin (Amy) Chen, Nicholas Clarke, Jingrong Lin
We investigate whether corporate adoption of blockchain technology is associated with a change in firms' financial reporting behavior. On one hand, the features of blockchain technology (immutability, decentralized consensus, and real-time data sharing) can enhance data integrity, suggesting corporate blockchain adoptions may reduce earnings management. However, despite fast growth in blockchain adoptions
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On professional destabilization and accounting self-regulation The British Accounting Review (IF 4.761) Pub Date : 2024-02-20 Zachary Huxley, Marion Brivot
The accounting profession faces significant upheaval due to numerous destabilizations in its environment, with financialization being particularly impactful. This paper introduces a theoretical framework to dissect how the profession reacts to such disruptions. We posit that destabilizations give rise to novel types of misconduct, leading professional bodies to re-evaluate their definitions of (un)acceptable
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Dynamics of carbon risk, cost of debt and leverage adjustments The British Accounting Review (IF 4.761) Pub Date : 2024-02-07 Douglas Cumming, Geeta Duppati, Ruwani Fernando, Shivendu Pratap Singh, Aviral Tiwari
We evaluate the effects of carbon risk on the speed at which corporations adjust their leverage for the period 2006–2020. Primarily we address the question: Does national carbon risk impact firm-level speed of adjustment (SOA)? To address the main question, our study further classifies the companies in the sample based on borrowing costs and carbon risk. By doing so, we report on how borrowing costs
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Mandatory corporate social responsibility spending, family control, and the cost of debt The British Accounting Review (IF 4.761) Pub Date : 2024-02-05 Naina Duggal, Lerong He, Tara Shankar Shaw
This paper examines how corporate compliance with the mandatory corporate social responsibility (CSR) spending regulation affects its cost of debt and how this effect varies with family control and ownership. Utilizing a longitudinal sample of Indian listed firms, we document that compliance with the CSR spending regulation leads to a lower cost of debt, and this relationship is more salient in non-family
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Auditing for fraud and corruption: A public-interest-based definition and analysis The British Accounting Review (IF 4.761) Pub Date : 2024-02-05 Massimo Sargiacomo, Jeff Everett, Luca Ianni, Antonio D'Andreamatteo
To better understand how the practice of auditing can be more effectively enrolled in the fight against fraud and corruption, this study (1) examines how these problems are viewed and defined by the public and (2) contrasts this view and definition with that of professional auditors. The examination is informed by the dispositive theory of Foucault and an inductive analysis of a large (90,000+) multi-year
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Towards fluid role identity of management accountants: A case study of a Finnish bank The British Accounting Review (IF 4.761) Pub Date : 2024-02-02 Antti Rautiainen, Robert W. Scapens, Marko Järvenpää, Tommi Auvinen, Pasi Sajasalo
In our case study of a Finnish bank, we found that the role identity of management accountants is becoming fluid, i.e., it is constantly adjusting to accommodate shifting role expectations and changing context-specific demands. Digitalization and information technology (with such tools as artificial intelligence and robotic process automation) are key drivers of change. Furthermore, banking is also
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Editorial Board The British Accounting Review (IF 4.761) Pub Date : 2024-01-23
Abstract not available
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Do conformity and bailouts affect misreporting? The case of public health-care organisations The British Accounting Review (IF 4.761) Pub Date : 2024-01-21 Eugenio Anessi-Pessina, Ileana Steccolini
Most literature on the antecedents of misreporting in the public sector focuses on the propensity to report financial breakeven, with limited attention to the regulatory and normative incentives that may alter such propensity. This study provides novel explanations for public sector organisations' deviation from breakeven. Its underlying assumption is that misreporting may be shaped by mimetic pressures
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Overlapping insiders and the method of payment in acquisitions: New tests and evidence on adverse selection The British Accounting Review (IF 4.761) Pub Date : 2024-01-14 Varun Jindal, Rama Seth
Exploiting a unique setting of overlapping insiders between acquirers and targets in India, we examine how information asymmetry between the transacting parties influences the returns to acquiring firms' shareholders, as well as the method of payment. Using a novel dataset, we find that cash-financed deals generate greater (no significantly different) value for acquiring firms’ shareholders than stock-financed
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Curbing myopic R&D behavior: How private meetings serve as a channel The British Accounting Review (IF 4.761) Pub Date : 2024-01-14 Jiaying Ge, Steven F. Cahan, Jerry W. Chen
This study considers whether investor-manager private meetings serve as a potential channel to detect and restrain corporate myopic R&D behavior in firmsject to earnings pressure. To do so, we exploit a unique dataset of corporate site visits, a particular form of private meetings. Our results indicate that the myopic R&D behavior of firms under earnings pressure is significantly lower when the firm
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The schizophrenic board secretary: Embedded agent between multiple stakeholders and financial misconduct The British Accounting Review (IF 4.761) Pub Date : 2024-01-11 Bin Liu, David Ahlstrom, Yutong Zhang
While agency theory has emphasized the importance of corporate governance in preventing financial misconduct, monitoring bodies do not always function well, especially in transition economies. By integrating the stakeholder-agency perspective with prospect theory, this study provides a new explanation of such dysfunction by introducing an embedded agent concept that manifests in a “schizophrenic” status
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Capitalism and the return on capital employed. Some further evidence The British Accounting Review (IF 4.761) Pub Date : 2024-01-11 John Richard Edwards
Return on capital employed is recognised both as a symbol of capitalism and as a calculation designed to help achieve the more effective deployment of available resources. Dating the emergence of this ‘accounting signature’ has been the subject of vigorous debate. Rob Bryer believes that calculation of the return on capital employed played a meaningful role in business life from the eighteenth century
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FinTech adoption in banks and their liquidity creation The British Accounting Review (IF 4.761) Pub Date : 2024-01-11 Zhuochen Wu, Shams Pathan, Chen Zheng
Utilizing an innovative financial technology (FinTech) index based on media sources, we analyse the effects of FinTech adoption on bank liquidity creation for a sample of the top 300 United States banks from Q1 2015 to Q2 2021. Our findings reveal a consistent negative association between FinTech adoption and bank liquidity creation, even during the coronavirus disease (COVID-19) pandemic. This relationship
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The role of the strategic apex in shaping the disclosure strategy: A family firm in crisis The British Accounting Review (IF 4.761) Pub Date : 2023-12-28 Mattias Sandgren, Timur Uman, Mattias Nordqvist
This study draws on attribution theory to examine how and by what means the firm's top management team, board members, and owner(s) (i.e., the strategic apex) shape disclosure strategies. Drawing on interviews and archival data spanning six years, we conduct a case study of a financially distressed private family-owned media group. Unique access to these data allowed us to peer into the disclosure
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The effect of key audit matters and management disclosures on auditors’ judgements and decisions: An exploratory study The British Accounting Review (IF 4.761) Pub Date : 2023-12-28 Jin Ma, Paul Coram, Indrit Troshani
We investigate how disclosure of key audit matters (KAMs) and related management footnote disclosures on a subjective accounting estimate relating to fair value in the financial statement footnotes affect auditors' perceptions of their accountability and their subsequent adjustment decisions. In relation to accountability, a substitution effect is found between KAMs disclosures and footnotes. That
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Financial statement comparability and analysts’ optimism for accruals The British Accounting Review (IF 4.761) Pub Date : 2023-12-29 Bryan Byung-Hee Lee, Jay Junghun Lee
This study examines the role of financial statement comparability in mitigating analysts' optimism for accruals. Prior research shows that sell-side analysts do not fully incorporate accrual information in anticipating future earnings and thus tend to issue more optimistic forecasts for firms with a higher level of accruals. We posit that financial statement comparability allows analysts to use industry
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Which governance mechanisms matter for firm pollution? The British Accounting Review (IF 4.761) Pub Date : 2023-12-07 Sarfraz Khan, John K. Wald
Using U.S. EPA pollution data, we analyze which governance provisions are related to firm pollution. We find that classified boards, poison pills, limits to amend bylaws, and fair price amendments are associated with significantly greater pollution. In contrast, cumulative voting, because it allows a greater voice for minority shareholders, is associated with lower pollution. We create a pollution-based
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Editorial Board The British Accounting Review (IF 4.761) Pub Date : 2023-11-29
Abstract not available
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How can regulators affect corporate social responsibility? Evidence from regulatory disclosures of consumer complaints in the U.S. The British Accounting Review (IF 4.761) Pub Date : 2023-11-27 Yujie Wang, Albert Tsang, Yi Xiang, Shuo Yan
Regulators are increasingly seeking ways to incentivize firms to improve corporate social responsibility (CSR) while minimizing criticism of direct interventions in firm behavior. This study takes advantage of two exogenous regulatory shocks initiated by the Consumer Financial Protection Bureau (CFPB) in the US. In 2011, the CFPB enabled the private filing of consumer complaints against financial firms
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Hallmarks of Integrated Thinking The British Accounting Review (IF 4.761) Pub Date : 2023-11-18 Ruth Dimes, Charl de Villiers
Integrated Thinking, the management approach associated with Integrated Reporting, has been hailed as a way of improving organisational decision-making and internal communication, leading to sustainable value creation. Yet Integrated Thinking remains poorly defined and understood. By analysing and synthesising the findings from an emerging body of case study evidence, this paper brings new theoretical
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Stuck in traffic: Do auditors price traffic congestion? The British Accounting Review (IF 4.761) Pub Date : 2023-11-16 Jie Hao, Viet Tuan Pham
Although the detrimental impact of traffic congestion on firm operations and human health is widely acknowledged, it is unclear whether auditors perceive traffic congestion as a risk factor. We posit and find that the traffic congestion levels in audit clients' domicile cities are positively associated with audit fees. Using a structured equation model, we identify and illustrate several channels that
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Investor behavior around targeted liquidity announcements The British Accounting Review (IF 4.761) Pub Date : 2023-11-14 Giovanni Cardillo, Enrico Onali, Salvatore Perdichizzi
We exploit announcements related to targeted longer-term financing operations (TLTROs) as exogenous shocks in investor perceptions to test recent theories on bank funding liquidity (Ahnert et al., 2019; Liu, 2015). We find that banks with high derivative holdings and more exposed to sovereign credit risk respond better to the announcements, consistent with the view that lower funding costs benefit
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Exploring the acquisition behavior of penny stock firms The British Accounting Review (IF 4.761) Pub Date : 2023-11-13 Shujie Liu, Mohammed Aminu Sualihu, Mingwei Sun, Alfred Yawson
We document that penny stock firms' acquisition likelihood increases with firm size, sales growth, free cash flow, stock price volatility, and run-up, but decreases with leverage, the number of years since IPO, and Tobin's Q. These findings are validated in a stepwise regression framework and are robust to alternative model specifications. Penny stock acquirers prefer private targets and are more (less)
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The collapse of the FTX exchange: The end of cryptocurrency's age of innocence The British Accounting Review (IF 4.761) Pub Date : 2023-11-11 Thomas Conlon, Shaen Corbet, Yang Hu
The sudden collapse of the FTX exchange appears to have unearthed several fundamental ethical, regulatory, and policy-based flaws, inherently damaging the cryptocurrency industry at large. The following research outlines the key events that led to the bankruptcy of FTX while examining industry-wide implications as a consequence of an acute risk management failure. Results indicate severe risk and liquidity
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Accounting and reporting for facing multiple values in meso-level hybrid organisations The British Accounting Review (IF 4.761) Pub Date : 2023-11-11 Renata Paola Dameri, Clara Benevolo, Paola Demartini
This work examines a new form of second-level hybrid, Meso-Level Hybrid Organisations (MLHOs), which do not generate an entity with a legal form or boundaries and is composed by a set of members in the organisational field, linked by multiple relationships and engaged in solving complex problems that require both public and private efforts. Our research interest is in the role that accounting and reporting
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Auditing decentralized finance The British Accounting Review (IF 4.761) Pub Date : 2023-11-11 Siddharth M. Bhambhwani, Allen H. Huang
Decentralized finance (DeFi), which executes financial transactions using blockchain without an intermediary, has attracted over US$250 billion in total value locked (TVL) at its peak. However, little is known about how DeFi protocols assure users of the safety of their investments. This paper provides the first empirical evidence on DeFi audit services that check and verify the smart contracts underlying
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Labor protection and stock price crash risk: Evidence from international equity markets The British Accounting Review (IF 4.761) Pub Date : 2023-11-10 Wei Chen, Lili Dai, Xiaohua Fang, Wenjun Zhang
We utilize the exogenous intertemporal variation in employment protection across countries and study the impact of employment protection on international equity markets. We find robust evidence that firms located in countries with weak labor protection regulation exhibit a low level of one-year-ahead stock price crash risks relative to those in countries with strong labor protection regulation. It
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Measuring the ownership and control of UK listed firms: Some methodological challenges The British Accounting Review (IF 4.761) Pub Date : 2023-11-07 Marc Goergen, Svetlana Mira
While scholars in business, management, accounting and finance frequently use data on the ownership and control structure of companies in their research, we show that determining this structure for a UK public limited company using publicly available information can be fraught with a number of difficulties. The latest changes to the UK Listing rules following the Hill Review (2021) may further exacerbate
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Are FinTech lending apps harmful? Evidence from user experience in the Indian market The British Accounting Review (IF 4.761) Pub Date : 2023-10-28 Akbar Ali, Vijaya B. Marisetty
Lower regulatory hurdles and ease of penetration has made FinTech lending grow rapidly across the world. Using around 2.19 million reviews from users of FinTech loan applications registered in Google Play Store in India, we investigate users' experience on FinTech lending. Our text analytics-based results indicate that around 20 percent of the negative experience is associated with fraud. FinTech lending
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What’s in a shade? The market relevance of green bonds’ external reviews The British Accounting Review (IF 4.761) Pub Date : 2023-10-28 Marco Ghitti, Gianfranco Gianfrate, Florencio López de Silanes, Marco Spinelli
With the growth of green bonds as an asset class, the certification of the actual climate footprint of projects financed with these bonds is gaining momentum among investors and policymakers. We investigate the informative content of Second Party Opinions (SPOs) issued by external reviewers to assess the quality of green bonds collecting a global sample of over 1200 corporate green bonds and matching
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Social trust and the choices to provide audited financial statements by private firms in emerging markets The British Accounting Review (IF 4.761) Pub Date : 2023-10-19 Nan-Ting Kuo, Cheng-Few Lee
Our study explores the association between social trust and private firms' choices to provide audited financial statements. By exploring an international sample from emerging markets, we find that private firms in countries with higher social trust are less likely to provide audited financial statements. This finding arises because social trust helps address contracting imperfections, substituting
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The impact of hedge fund activism on audit pricing The British Accounting Review (IF 4.761) Pub Date : 2023-10-09 Huimin (Amy) Chen, Bill B. Francis, Yinjie (Victor) Shen, Qiang Wu
The extant literature focuses on the economic effect of significant changes that activist hedge funds enact, but shows mixed findings about the effect on the information environment. We investigate the informational effect on the third party — namely, the auditor — and argue that the potential significant changes in target firms heighten the complexity and uncertainty of the information environment
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Determinants and consequences of sales/production report issuance The British Accounting Review (IF 4.761) Pub Date : 2023-10-06 Renhui Fu, Chen Ma, Yamin Zeng, Junsheng Zhang
This study empirically examines the determinants and consequences of firms’ issuance of sales/production reports. Our findings demonstrate that firms choose to issue these reports in order to meet the information needs of investors, supply chain participants, and industry peers. As a result, these firms experience higher firm value, attributed to improvements in the information environment, increased
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CEO equity incentive duration and expected crash risk The British Accounting Review (IF 4.761) Pub Date : 2023-10-06 Zhenjiang Gu, Louise Yi Lu, Yangxin Yu
This study examines the effect of CEO equity incentive duration on firm-specific ex ante crash risk. Using a measure that explicitly accounts for the length of stock and option grant vesting terms (Gopalan et al., 2014), we find that longer CEO equity incentive duration reduces investors' perceived crash risk, gauged by the steepness of option implied volatility smirk. This finding holds for alternative
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How auditors identify and report key audit matters - An organizational routines perspective The British Accounting Review (IF 4.761) Pub Date : 2023-09-13 Warren Maroun, Alan Duboisée de Ricquebourg
Despite the volume of auditing research over the last decade, relatively little is known about how auditors apply specific codified requirements. We use organisational routines as a schematic and Power's (2003) distinction between the front and backstage of an audit to explore the link between the broad prescriptions in ISA 701 and the micro-level performances of individual auditors to report key audit
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Idiosyncratic volatility and return: A finite mixture approach The British Accounting Review (IF 4.761) Pub Date : 2023-09-04 Zhuo (June) Cheng, Jing Fang, Yinglei Zhang
Using finite mixture normal regressions, we find that the relation between idiosyncratic volatility (IVOL) and realized return is negative for one latent group and positive for the other latent group. The intercept is larger for the group with a positive relation than for the group with a negative relation; the negative relation concentrates in firms with large negative realized return in the bottom
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Let's have a relook at accountability The British Accounting Review (IF 4.761) Pub Date : 2023-09-04 Gloria Agyemang
2020 Distinguished Accounting Academic Keynote Address presented at the Annual British Accounting and Finance in April 2022, University of Nottingham. This paper examines how Gloria Agyemang, the BAFA Distinguished Accounting Academic award winner of 2020, has studied accountability in her work. It does this by analysing her previous research contributions to public sector accountability, nongovernment
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Climate theory & managerial decisions on cross-border mergers The British Accounting Review (IF 4.761) Pub Date : 2023-08-30 Antonios Siganos
We explore the significance of climate theory concerning managerial decisions in cross-border mergers. We report that temperature offers a good familiarity proxy showing that country pairs that experience little (large) distance in temperature experience relatively more (less) acquisitions. A one-unit decrease in the difference of the temperature in a country pair is linked with an increase in the
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To datafication and beyond: Digital transformation and accounting technologies in the healthcare sector The British Accounting Review (IF 4.761) Pub Date : 2023-08-29 Christos Begkos, Katerina Antonopoulou, Matteo Ronzani
Prior accounting research problematizes the implications of individual technologies on digitization, digitalization, and digital transformation. However, it often conflates such terms and ignores the pervasive role of datafication in the process. To address such issues, this study develops a processual view of digital transformation to explore how multiple accounting technologies and widespread digitization
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Hybridity, institutional logics and value creation mechanisms in the corporatisation of social care The British Accounting Review (IF 4.761) Pub Date : 2023-08-15 Laurence Ferry, Piotr Wegorowski, Rhys Andrews
Hybridisation of public services has increased under neoliberalism and New Public Management policies, over the past four decades since the 1980s. Hybrid arrangements for service provision blend public, private and nonprofit approaches to organising in ways imbued with a range of institutional logics impinging on their value creation mechanisms. Within this context, the corporatisation of public services
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Boosting credit risk models The British Accounting Review (IF 4.761) Pub Date : 2023-07-29 Bart Baesens, Kristien Smedts
In this article, we give various recommendations to boost the performance of credit risk models. It is based upon more than two decades of research and consulting on the topic. Building credit risk models typically entails four steps: gathering and preprocessing data, modelling of probability of default (PD), Loss Given Default (LGD) and Exposure at Default (EAD), evaluating the credit risk models
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Learning to be green: Accounting comparability and environmental violations The British Accounting Review (IF 4.761) Pub Date : 2023-07-29 Justin Chircop, Monika Tarsalewska, Agnieszka Trzeciakiewicz
Over recent years there has been an increasing awareness of the costs to the environment of corporate actions. We posit that accounting comparability between a firm and its peers, facilitates firm learning of the impact peer firm activities have on the environment. This learning allows the firm to reduce its own environmental violations. In line with this conjecture, our findings show that accounting
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The hidden cost of organisation capital: Evidence from trade credit The British Accounting Review (IF 4.761) Pub Date : 2023-07-22 Joye Khoo, Adrian (Wai Kong) Cheung
Organisation capital is an important firm-specific resource that is linked to value created by key talents, and the risk arising from the unexpected departure of key talents is detrimental to the firm. We find that trade credit decreases with organisation capital, particularly when labour mobility is greater or employees have more outside opportunities. This supports the agency view of organisation
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Exporting corporate social responsibility: Evidence from foreign bank entry The British Accounting Review (IF 4.761) Pub Date : 2023-07-21 Yanyan Shen, Xiaojia Zheng
This paper examines the effect of foreign bank entry on local firms' social performance. We find that foreign bank entry is associated with better performance of local firms in regard to corporate social responsibility (CSR). The effect is more pronounced when firms face less favorable financial conditions and when corporate governance is weaker. Meanwhile, the role of foreign banks in promoting CSR
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Bitcoin under the microscope The British Accounting Review (IF 4.761) Pub Date : 2023-07-20
This paper explores and describes historical on-chain transaction data recorded on the Bitcoin blockchain, constructs a panel of all individual Bitcoin users, and computes their balances in the cross-section and over time. We run clustering algorithms to combine addresses that belong to the same user into wallets and we find that using wallets over addresses as the unit of analysis allows for more
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NGOs’ performance, governance, and accountability in the era of digital transformation The British Accounting Review (IF 4.761) Pub Date : 2023-07-18 Carolyn J. Cordery, Galina Goncharenko, Tobias Polzer, Danielle McConville, Ataur Belal
Digital transformation creates opportunities and challenges for non-governmental organisations (NGOs) and their stakeholders. In NGOs, digital transformation affects different accounting modes. While many challenges brought about by digital transformation are universal, NGOs can be acutely affected due to the diversity of their stakeholders, regulatory and funder demands, and ongoing resource constraints
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When a gift resembles a trojan horse: CEO stock gift and stock price crash risk The British Accounting Review (IF 4.761) Pub Date : 2023-07-09 Man Duy Marty Pham, Thu Ha Nguyen
This study presents a new interpretation of executives’ stock gifts as an agency cost of managerial bad news hoarding. In a sample of US firms, we document a higher stock price crash risk associated with CEO stock gifts. This evidence suggests that stock gifting could be an exit for opportunistic managers to dispose of their unwanted shares and avoid wealth losses when they can no longer withhold negative
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Does CEO extraversion pay off when in need? Evidence from the global financial crisis The British Accounting Review (IF 4.761) Pub Date : 2023-07-07 Shushu Liao, Nhut H. Nguyen, Cameron Truong
We examine the effect of CEO extraversion on corporate performance during the Global Financial Crisis (GFC). Contrary to the expectation that extraverted CEOs should shield firms better from GFC adversities, we document that the extraversion characteristic of CEOs places a significant, though negative, effect on corporate performance during the financial crisis. Our findings are robust to controlling
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The impact of terrorist attacks and mass shootings on earnings management The British Accounting Review (IF 4.761) Pub Date : 2023-07-04 Seda Oz
This study investigates the role of salient events on accrual-based and real earnings management activities. For people using availability heuristics, the salience of an event may temporarily increase perceived risk even though the actual risk does not change, and individuals making decisions by availability heuristics are subsequently more likely to assign a higher probability to unrelated negative
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Opening the black box of human resource allocations in audit firms: The assignment of audit partners to audit engagements The British Accounting Review (IF 4.761) Pub Date : 2023-06-30 Bin Wu, Yaqian Wu, Min Zhang, Jiyuan Li
Using unique and detailed data on audit partners, this study examines how audit firms make human resource allocation decisions. The empirical results show that clients with higher risks (i.e. tax, legal, and asset valuation risks) are more likely to be audited by partners with corresponding domain-specific expertise, and these partner–client matches are more likely to happen when audit firms have strong
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Validating implied cost of capital with realized returns by using alternative measures of cash-flow news The British Accounting Review (IF 4.761) Pub Date : 2023-07-03 Simeon Ketterer, Dionysia Dionysiou, Brigitte Eierle, Ioannis Tsalavoutas
We outline analytically that, when testing different implied cost of capital (ICC) estimates for validation by employing the Vuolteenaho (2002) framework, the cash-flow news in the validation framework should be defined in a way that considers the ICC model specific assumed sequence of future cash flows. This is based on market expectations, as proxied by analysts' forecasts. We then propose adjusting
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Does lowball guidance work? An analysis of firms that consistently beat their guidance by large margins The British Accounting Review (IF 4.761) Pub Date : 2023-06-25 Jing Chen, Michael J. Jung, Michael Tang
Lowball guidance is the practice of firm managers issuing overly cautious guidance that is later exceeded by a large margin upon earnings announcement. In this study, we examine this practice at the episode level, where a firm engages in it over multiple consecutive quarters. Using a control sample of firms that exhibited episodes of meet or small beats, we draw inferences specific to lowball guidance
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Does budget target setting lead managers to engage in unethical behavior for the organization? The British Accounting Review (IF 4.761) Pub Date : 2023-06-19 Kazunori Fukushima, Akihiro Yamada
Recent accounting and management research findings suggest that unethical behavior in organizations can be normalized as a result of management control processes, such as performance evaluations and incentive compensation, and as a result of actions that attempt to serve the organization, such as unethical pro-organizational behavior. We investigate the relationship between budget target setting, which
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Creative Corporate Culture and Corporate Tax Avoidance The British Accounting Review (IF 4.761) Pub Date : 2023-05-22 Tahseen Hasan, Kose John, Haimeng Teng, Qiang Wu
This study examines the association between creative corporate culture and corporate tax avoidance. We construct a novel measure of creative corporate culture through the textual analysis of public firms’ 10-K reports. We find that firms with highly creative culture avoid taxes to a greater extent than firms with less creative culture. This effect is incremental to previously documented effects of
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Short-selling activities in the time of COVID-19 The British Accounting Review (IF 4.761) Pub Date : 2023-05-12 Ellie Luu, Fangming Xu, Liyi Zheng
This study examines the daily short-selling activities in the U.S. market during the early 2020 outbreak of the COVID-19 global pandemic. Our findings indicate firms that are more sensitive to the shock (i.e., with high foreign exposure, low financial or operating flexibility, or high supply-chain exposure) were shorted more heavily. Moreover, short-selling activities during the COVID-19 pandemic,
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Actors constructing accountability in hybrid organisations: The case of a Swedish municipal corporation The British Accounting Review (IF 4.761) Pub Date : 2023-04-12 Joshua Maine, Timur Uman, Emilia Florin-Samuelsson
Coping with accountability challenges is an essential part of how actors in hybrid organisations make sense of their responsibility to distinctive groups of stakeholders. Drawing on institutional theory and a logics perspective, we explore how the strategic apex in a Swedish municipal housing corporation constructs accountability in relation to the tensions that arise therein. Our case study highlights
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Asymmetric Reactions of Abnormal Audit Fees Jump to Credit Rating Changes The British Accounting Review (IF 4.761) Pub Date : 2023-03-30 June Cao, Mong Shan Ee, Iftekhar Hasan, He Huang
Considering the inherent stickiness of abnormal audit fees, our study contributes to the literature by decomposing abnormal audit fees into a jump component and long-run sticky component. We investigate whether and how changes in credit ratings asymmetrically affect the jump component of abnormal audit fees. We document a positive association between rating downgrades and the jump component. We find
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When a financially oriented performance measurement system supports hybrid collective sensemaking: The case of a cooperative bank The British Accounting Review (IF 4.761) Pub Date : 2023-03-27 Nathalie BÉNET, Aude DEVILLE, Séverine VENTOLINI
A performance measurement system (PMS) is supported by the idea that performance measurements are drivers of organisational performance. Under that assumption, scholars have discussed and tried to develop comprehensive PMSs that include both financial and non-financial measurements. Building on the specific context of a hybrid organisation and findings from a case study, this paper explores how an