International Journal of Accounting and Information Management

Uyar, Ali; Elbardan, Hany; Kuzey, Cemil; Karaman, Abdullah S.

2023 International Journal of Accounting and Information Management

doi: 10.1108/ijaim-04-2022-0086

This study aims mainly to test the effect of audit committee independence and expertise attributes on corporate social responsibility (CSR) reporting, assurance and global reporting initiative (GRI) framework adoption and to investigate how CSR committee existence moderates this main relationship.Design/methodology/approachThe study uses a large global sample that includes all (59,172) firm-year observations having CSR-related data in the Thomson Reuters Eikon database for a period between 2002 and 2019. The empirical analyses are based on random-effects logistic panel regression and Hayes methodology for the moderation analysis.FindingsThe study finds that audit committee independence and expertise are significantly associated with CSR reporting, CSR report assurance and GRI framework adoption. Moderation analysis largely supports the existence of a substitution role between audit and CSR committees and implies that audit committees are significant predictors of CSR reporting, assurance and GRI framework adoption mostly in the absence of the CSR committee.Practical implicationsThe findings propose audit committee members be extra-vigilant in CSR reporting and assurance practices arising from undertaking substitution roles with the CSR committee. Hence, firms may configure their corporate structure in line with the results such as augmenting the audit committee with independent and expert members if they do not constitute a CSR committee. If firms establish a CSR committee, audit committee members may allocate less time to CSR reporting and assurance and more time to financial reporting quality.Originality/valueThis is the first study, to the best of the authors’ knowledge, to investigate the direct and indirect effect of audit committees’ attributes not only on CSR disclosure but also on GRI implementation and CSR reporting external assurance, considering the CSR committee’s possible substitutability or complementarity moderating role. This research develops a deeper understanding of audit committees’ non-financial role.

Neves, Maria Elisabete; Cancela, Beatriz Lopes; Gabriel, Vítor Manuel de Sousa

2023 International Journal of Accounting and Information Management

doi: 10.1108/ijaim-05-2022-0107

This study aims to understand which factors determine the corporate performance of Portuguese and Spanish listed companies between 2011 and 2018, also considering the sub-period marked by the presence of the Troika in Portugal, between 2011 and 2014.Design/methodology/approachTo achieve this aim, panel data methodology was used, specifically the generalized method of moments (GMM) estimation method proposed by Arellano and Bond (1991), Arellano and Bover (1995) and Blundell and Bond (1998) for 110 non-financial companies from the Iberian Peninsula.FindingsThe results point out different signs and significance of the variables in the companies of the two countries. Regarding the sub-period, our results suggest that the intervention of the Troika in Portugal acted in a very different way from the neighboring country.Originality/valueThis research shows the importance of studying countries individually, even with small dimensions, to reinforce the path that is still necessary for more sustainable companies. Furthermore, when companies have strong governance structures, the harmful contagion from one neighboring country to another may not happen.

Neves, Maria Elisabete; Proença, Catarina; Cancela, Beatriz

2023 International Journal of Accounting and Information Management

doi: 10.1108/ijaim-08-2022-0166

This paper aims to analyze the corporate governance and corporate social responsibility (CSR) determinants of the Portuguese listed companies’ performance, considering a different point of view by managers, shareholders and other external stakeholders and investors.Design/methodology/approachTo achieve this aim, the authors have used a sample of 34 nonfinancial listed companies in Euronext Lisbon between 2015 and 2020. The authors use the panel data methodology to test the hypotheses formulated according to the literature review, specifically the generalized method of moments (GMM) system estimation model proposed by Arellano and Bond (1991).FindingsThe main results point out that the determinants of the corporate performance vary depending on the dependent variable considered. From the managers’ perspective, the existence of an audit committee and expenses with the environment increase costs and reduce results, negatively influencing corporate performance, but the company’s maturity adds synergies in resource management and positively influences performance. Shareholders consider that gender diversity and board independence positively influence performance, whereas, for external stakeholders and long-term investors, gender diversity and the social responsibility committee harm the performance of Portuguese companies. However, environmental and social expenditures have a positive effect, showing that the market’s perception is that, in the long run, it is essential to eradicate poverty and protect the environment.Originality/valueTo the best of the authors’ knowledge, this study is the first one to analyze corporate governance and CSR determinants on the performance of listed Portuguese companies. This study shows that in a small banking-oriented country, there is still a long way to go in terms of increasing social responsibility and governance among different stakeholders. It is essential to promote actions that lead to effective governance and awareness of social responsibility.

Franke, Franziska; Hiebl, Martin R.W.

2023 International Journal of Accounting and Information Management

doi: 10.1108/ijaim-12-2021-0246

Existing research on the relationship between big data and organizational decision quality is still few and far between, and what does exist often assumes direct effects of big data on decision quality. More recent research indicates that such direct effects may be too simplistic, and in particular, an organization’s overall human skills are often not considered sufficiently. Inspired by the knowledge-based view, we therefore propose that interactions between three aspects of big data usage and management accountants’ data analytics skills may be key to reaching high-quality decisions. The purpose of this study is to test these predictions based on a survey of US firms.Design/methodology/approachThe authors draw on survey data from 140 US firms. This survey has been conducted via MTurk in 2020.FindingsThe results of the study show that the quality of big data sources is associated with higher perceived levels of decision quality. However, according to the results, the breadth of big data sources and a data-driven culture only improve decision quality if management accountants’ data analytics skills are highly developed. These results point to the important, but so far unexamined role of an organization’s management accountants and their skills for translating big data into high-quality decisions.Practical implicationsThe present study highlights the importance of an organization’s human skills in creating value out of big data. In particular, the findings imply that management accountants may need to increasingly draw on data analytics skills to make the most out of big data for their employers.Originality/valueThis study is among the first, to the best of the authors’ knowledge, to provide empirical proof of the relevance of an organization’s management accountants and their data analytics skills for reaching desirable firm-level outcomes. In addition, this study thus adds to the further advancement of the knowledge-based view by providing evidence that in contemporary big-data environments, interactions between tacit and explicit knowledge seem crucial for driving desirable firm-level outcomes.

Naz, Aziza; Sheikh, Nadeem Ahmed

2023 International Journal of Accounting and Information Management

doi: 10.1108/ijaim-08-2022-0163

The purpose of this study is to investigate whether capital structure affects accruals and real earnings management (AEM and REM) of nonfinancial firms listed on Pakistan Stock Exchange (PSX). Moreover, to investigate whether institutional development (ID) moderates the relation between capital structure and earnings management (EM).Design/methodology/approachData were taken from annual reports of nonfinancial firms listed on the PSX during 2012–2019. Data of 150 firms for a period of eight years were found completed with respect to the variables used in this study. The generalized moments of methods estimator is used to estimate the effects of explanatory variables on earning management. Furthermore, fixed and random effects methods were used to estimate the impact of capital structure on AEM and REM.FindingsResults show that all three measures of capital structure (i.e. total debt ratio, long-term debt ratio and short-term debt ratios) are inversely related to AEM. In contrast, all measures of capital structure are positively related to abnormal cash flow from operations. Total debt ratio and long-term debt ratio are negatively while short-term debt ratio is positively related to abnormal discretionary expenses. Total debt ratio and short-term debt ratio are significant and negatively related to abnormal production cost. Additionally, interaction terms of ID (i.e. rule of law and regulatory quality) significantly moderate the controlling role of debt on discretionary accruals. In sum, results show that the use of debt induces lender's monitoring. Consequently, managers move toward REM because of lower probability of being exposed.Practical implicationsFindings of this study have significant implications for managers and regulatory authorities. For instance, the use of debt increases the lender’s influence which restricts the managers to be involved in EM practices. Moreover, regulatory authorities are required to address the loopholes in regulations to refrain the managers to be engaged in EM.Originality/valueTo the best of the authors’ knowledge, this is the first study in Pakistan that has explored the impact of capital structure on AEM and REM. More importantly, a careful review of the literature affirms that this study is among the few studies that have used ID as a moderating variable to explain the relation between capital structure and EM.

Ahmed, Hussein Mohsen Saber; El-Halaby, Sherif; Albitar, Khaldoon

2023 International Journal of Accounting and Information Management

doi: 10.1108/ijaim-04-2022-0088

This paper aims to examine the mediating role of big data adoption (BDA) on the association between board governance (BG) and audit report lag (ARL).Design/methodology/approachThis study uses data extracted from financial reports for a sample from EGX100 over the period from 2015 to 2019. This study applies content analysis approach to measure the level of BDA. This study uses ordinary least squares, structure equation modelling and principal component analysis to investigate the relationship between BG, BDA and ARL.FindingsThe findings indicate that BDA can be used as a predictor of ARL for companies listed on the Egyptian stock exchange. The results show that board diversity has a significant effect on ARL when BDA is used as a mediator.Research limitations/implicationsThis study only includes technology, telecommunications and health-care industries in the sample.Practical implicationsThis paper raises investor and stakeholder awareness for the importance of BDA and corporate governance (CG) procedures in reducing audit report delays in developing countries such as Egypt. This study can assist regulators in developing audit report requirements and enforcing regulations to guarantee timely audit report publication.Originality/valueThis paper provides a shred of unique evidence on the role of BDA in mediating the relationship between BG and ARL in a developing country.

Abdelhak, Engy ELsayed; Hussainey, Khaled; Albitar, Khaldoon

2023 International Journal of Accounting and Information Management

doi: 10.1108/ijaim-05-2022-0108

This study aims to examine the impact of internal corporate governance and audit quality on the level of COVID-19 disclosure in Egypt.Design/methodology/approachThe authors use manual content analysis to measure levels of COVID-19 disclosure in the narrative sections of annual reports. The authors analyze all companies listed on the Egyptian Stock Exchange over 2020–2021. The authors use different regression models to test the research hypotheses.FindingsThe analysis adds to the literature in two crucial respects. First, it provides a measure for COVID-19 disclosure in Egypt. Second, it provides evidence that governance mechanisms (board diversity, audit committee [AC] independence), auditor type and audit opinion affect the level of COVID-19 disclosure. The higher level of COVID-19 disclosure is associated with firms with more female directors on the board, being audited by one of the big four audit firms and receiving standard clean audit opinion. While the inexistence of an AC and more executives on the AC negatively affect COVID-19 disclosure levels.Originality/valueTo the best of the authors’ knowledge, it is the only paper that examines COVID-19 disclosure in the Egyptian context. It is also the first paper that provides evidence on the impact of internal governance and audit quality on COVID-19 disclosure.

Elmarzouky, Mahmoud; Hussainey, Khaled; Abdelfattah, Tarek

2023 International Journal of Accounting and Information Management

doi: 10.1108/ijaim-08-2022-0178

This paper aims to investigate the relationship between key audit matters (KAMs) and audit costs and whether board size and independence affect this relationship. Furthermore, this paper examines the moderating effect of corporate governance on the relationship between KAMs and audit costs.Design/methodology/approachThe authors hypothesise that disclosing more KAMs in the audit report is positively associated with audit costs because of the greater effort. The agency theory suggests that firms with good governance will mitigate the agency conflict of interest and improve financial reporting quality. Thus, good governance might moderate the relationship between reported KAMs and audit costs. The authors use a quantitative approach. The authors are using a sample of the UK FTSE all-share non-financial firms from 2014 to 2018 for the UK Financial Times Stock Exchange all-share non-financial firms.FindingsThe authors provide evidence of a significant positive relationship between KAMs and audit costs. The relationship is relatively higher when considering the independent directors' percentage as a moderating factor. These results came consistent with the agency theory literature. However, the authors found no empirical evidence to support a moderating effect of board size on the relationship between KAMs and audit cost.Practical implicationsThe finding benefits the regulatory setters to better understand the consequences of the new auditing standards. This paper has theoretical and practical implications for regulators, standard setters, professional bodies, shareholders and academics.Originality/valueThis paper contributes to the literature assessing the regulatory changes related to audit reform and adds to the debate on the impact on audit costs. This paper underlines governance factors as a moderating role in this relationship between KAMs and audit costs.