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Porporato, Marcela; Ruiz, Juan Ignacio
2023 Journal of Accounting in Emerging Economies
doi: 10.1108/jaee-10-2021-0325
Explore the factors making emergency procurement more prone to corruption by advancing explanations for when rules and transparency are relaxed allowing corrupt practices to emerge. Describe institutional factors, such as corruption syndrome (Johnston, 2005, 2015) and legal system, and their impact on procurement rules changes.Design/methodology/approachA qualitative event study using publicly available data offer a timeline and explanation of government procurement control mechanisms and transparency roles in emergencies by comparing two countries. Argentina and Canada had very similar and advanced food procurement systems prior to COVID-19, but they took different stances when the pandemic broke out.FindingsLegal systems and corruption syndrome are linked, where Civil Law is related to Elite Cartels (Argentina) and Common Law with Influence Markets (Canada). The study contributes to understand the role of transparency to minimize the opportunity for direct purchases (electronic trails of decisions, justifications and approvals). Judicial system's actions favor corrupt practices and are aligned with elites despite the civil society outcry.Research limitations/implicationsResearch on corrupt practices has limited access to primary data due to fear of reprisals. Informal conversations revealing glimpses of corruption were used to identify publicly available documents. Numbers play a role in emergencies and performativity theory literature is enriched by providing an example of different interpretation of information when frameworks differ between civil society and courts.Originality/valueA comparative analysis that evidences the role of pre-existing institutional and social conditions shows when emergency situations will be used as an excuse to relax procurement control and transparency mechanisms which in turn facilitate corrupt practices.
Uygur, Saffet Aras; Napier, Christopher
2023 Journal of Accounting in Emerging Economies
doi: 10.1108/jaee-08-2021-0272
Despite increasing public attention and media coverage of the Covid-19 pandemic, little research was conducted on how the crisis affected accountability practices in the not-for-profit sector. This study focusses on international non-governmental organisations (INGOs) that operate in emerging economies worldwide but are registered in England and Wales and examines how their online accountability practices changed after the Covid-19 pandemic. The purpose of this paper is to address these issues.Design/methodology/approachThe authors use the theoretical lens of the situational crisis communication theory (SCCT) and a contingency approach to not-for-profit governance in order to assess how accountability practices have been shaped by the response given by INGOs to preserve their reputation which is argued to be damaged by the COVID-19 pandemic. They use Dumont's (2013) nonprofit virtual accountability index (NPVAI) for statistical analysis. They examine whether the five dimensions of the NPVAI have changed significantly as a policy of response to the Covid-19 pandemic. They also examine the documents used to disclose information on performance, governance and mission to understand if their content was affected by the pandemic.FindingsThe authors found two of the NPVAI dimensions: accessibility and engagement to be statistically different compared to before the pandemic. They also examined the documents used to disclose information on performance, governance and mission in order to understand if their content were affected by the pandemic. Their findings suggest that INGOs focussed on keeping their donors' attention and their fund flow rather than informing how they performed and how their governance has changed as a result of the pandemic. No statistically significant change was found regarding the dimensions of performance, governance and mission.Research limitations/implicationsINGOs which focus on humanitarian relief and crises management mainly in emerging economies were also affected by the pandemic. However little attention has been given to how accountability was being shaped by the Covid-19 pandemic. An analysis of how not-for-profit sector accountability practices were affected by the pandemic is, therefore, needed. Due to the nature of the pandemic online accountability practices is an area where research could focus on, until now few studies have been conducted on online accountability. The study contributes methodologically by assessing the applicability of the NPVAI for comparisons across different time periods rather than across different types of organisation at a specific point in time. The authors conclude that the NPVAI must be supplemented by some analysis of the content of key online documents and other material.Practical implicationsThe authors’ findings provide important implications for crisis management and its effect on accountability practices in INGOs that operate in emerging economies and the not-for-profit sector in general. The findings suggest that the crisis led to only limited changes in mission and governance as changes in these dimensions tend to occur over the long term. Although they expected the pandemic to lead to more performance information being released, this did not happen. The enhancement of online accountability practice in the engagement and accessibility dimensions shows that INGOs focussed more on maintaining their fund flow rather than on actions to target the pandemic. This is especially apparent as regardless of size the donation and fundraising links have increased throughout the pandemic. Overall, the study provides important findings specific to the effects of the Covid-19 pandemic on online accountability practices in the not-for-profit sector. The study's empirical contribution is to assess how not-for-profit organisations shape their online accountability practices to preserve their reputation and legitimacy.Social implicationsThe authors have expanded the discussion of the paper's contribution to theory, methodology and knowledge about online accountability and crisis management in the conclusion section of the paper. They found that INGOs have reacted to the pandemic by becoming more anxious about their ability to generate funds, and content analysis showed that there was little additional information about how INGOs' performance had been affected by the pandemic, which suggests that INGOs need to pay more attention to how they manage accountability in times of crisis.Originality/valueThe authors construct a conceptual framework using theories that have the potential to explain how external factors such as the Covid-19 pandemic can affect online accountability practices. Their paper also responds to the call for studies of the effectiveness of various accountability mechanisms in NGOs (Unerman and O’ Dwyer, 2006). Unlike previous studies they did not compare various sectors at a single point in time, but rather they assessed the impact of the Covid-19 pandemic and the reaction of INGOs by comparing online disclosures across time. This is a novel use of Dumont's NPVAI and therefore provides an important contribution to the literature.
da Silva Flores, Eduardo; Sampaio, Joelson Oliveira; Beiruth, Aziz Xavier; Brugni, Talles Vianna
2023 Journal of Accounting in Emerging Economies
doi: 10.1108/jaee-10-2021-0317
The main purpose of this study is to evaluate whether the COVID-19 pandemic has stimulated earnings management among publicly traded companies in Brazil and the USA.Design/methodology/approachThe authors analyzed the above-mentioned effects based on 22,244 observations of Brazilian companies and 139,856 observations of American companies from 1998 to 2020. The proxy used to detect earnings management based on discretionary accruals (DAC) was obtained by using the Modified Jones Model (MJM) (Dechow et al., 1995), with adjustments suggested by Kothari et al. (2005). In accordance with previous studies (e.g. Brown et al., 2015; Enomoto et al., 2015; Galdi et al., 2020; Huang and Sun, 2017; Roychowdhury, 2006), the authors also employed a second proxy to detect earnings management through real activities associated with unusual losses for fixed assets (property, plant and equipment (PPE)).FindingsThe study’s findings indicate that the discretionary accruals of Brazilian companies varied in a more accentuated manner during the COVID-19 pandemic, making it possible to deduce that a recent history of economic depression may entail greater incentives for earnings management in an emerging economy. In addition, the authors verified that the effects of the current crisis on earnings management proxies denote a signal that is distinct from previous economic crises, which may be interpreted as an attempt to postpone the effects of the pandemic on financial statements, especially those of the Brazilian capital markets.Originality/valueUnlike previous crises, this pandemic has led to direct restrictions on a wide variety of economic segments rather than indirect contagion due to anomalies in the financial markets, making it a phenomenon with the characteristics of a quasi-natural experiment for studies related to the quality of accounting information. Considering that both Brazil and the USA provide an opportune economic contrast, given their discrepancies in terms of economic growth over the past two decades, the researchers believe that there is an unusual opportunity to understand how earnings management can be an incentive for managers in environments where crises arose from natural causes.
Harymawan, Iman; Putri, Fiona Vista
2023 Journal of Accounting in Emerging Economies
doi: 10.1108/jaee-10-2021-0318
How does the internal audit function make external auditors work more efficiently at the early stage of the COVID-19 pandemic? This study examines the relationship between internal audit function, audit report lag and audit fee at the early stage of the COVID-19 pandemic.Design/methodology/approachThis study uses data from all public firms listed on the Indonesia Stock Exchange from 2018 to 2019 using the difference-in-difference test technique to answer the proposed hypothesis. In addition, this study also tested the issue of endogeneity using Coarsened Exact Matching (CEM) and Two-Stage Least Square (Heckman, 1979).FindingsThis study finds that, at the early stage of the COVID-19 pandemic, a good internal audit function significantly reduced audit report lag and audit fee. These findings indicate that good corporate governance implemented through an internal audit function during the COVID-19 pandemic can give assurance to prevent and mitigate the firm's risk so that external auditors can work more efficiently. Furthermore, this study also carries out an additional analysis by subsampling the high and low technological industries. Based on the robustness test, it is revealed that the results of this study are consistent.Originality/valueThis study contributes to the novelty of literature in auditing studies that highlights the audit process at the early stage of the COVID-19 pandemic
Al-Qadasi, Adel; Baatwah, Saeed Rabea; Omer, Waddah Kamal
2023 Journal of Accounting in Emerging Economies
doi: 10.1108/jaee-08-2021-0269
The worldwide spread of the coronavirus disease 2019 (COVID-19) has significant effects on financial markets and companies, causing an unprecedented level of uncertainty in reporting and auditing companies' financial statements. This study explores whether and how COVID-19 affects audit fees.Design/methodology/approachUsing a sample of 268 firm-year observations from the Omani capital market between 2017 and 2020, the ordinary least squares (OLS) regression with a robust standard error is applied to answer the research question of this study.FindingsThe authors find that the pandemic has a significant and positive association with audit fees and abnormal audit fees. This finding suggests that the threat of risk, complexity and legal liability circumstances resulting from the pandemic can be compensated by charging higher audit fees. In addition, the authors provide evidence that Big4 audit firms are those most responding to COVID-19 by charging higher audit fees. Finally, the authors conclude that large companies are less sensitive to the pandemic.Practical implicationsUsers of financial reports and audit firms should anticipate changes in the audit efforts resulting in increased audit fees during COVID-19. Thus, this paper may guide practitioners and businesses in determining the audit fees and associated costs of any potential pandemic.Originality/valueThe study results are among the earliest empirical insights into the effect of COVID-19 on audit fees in Oman.
Tetteh, Lexis Alexander; Krah, Redeemer; Ayamga, Timothy Azaa; Ayarna-Gagakuma, Leticia Apieleg; Offei-Kwafo, Kwasi; Gbade, Vivian Aku
2023 Journal of Accounting in Emerging Economies
doi: 10.1108/jaee-07-2021-0242
The study investigates the experiences of undergraduate students in using online learning platforms to study Accounting-related courses during the COVID-19 pandemic.Design/methodology/approachThe study uses qualitative research approach and 89 undergraduate Accounting students from University of Professional Studies, Accra (UPSA) were purposively interviewed using semi-structured interview guide, observation and documentary evidence to achieve triangulation of data and results.FindingsThe study discovers that due to the Covid pandemic, the online Accounting learning system has a relative advantage over the physical classroom learning as the online pedagogy ensures that the students are safe and do not contract the virus. The findings further indicate that the university's engagement framework includes three units: engaging students with content on the university's Learning Management System (LMS), engaging students with their peers via group course WhatsApp platform and Zoom/Google Meet lectures, and engaging students with their instructors via the LMS, Zoom/Google Meet, and Group WhatsApp. Each unit is based on research-based best practices and strategies for online education such as the use of media (videos) to augment written course content and to improve student-to-content engagement, positive cognitive, collaborative, behavioural and emotional engagement of students. The university's strategies also encourage student-to-student involvement, as well as assessment and feedback. Regarding behavioural and emotional engagements, the study discovered that some lecturers' attitudes toward students coupled with insufficient administrative support influenced students to develop negative reactions to the use of online learning platforms for Accounting education.Practical implicationsThis paper has the potential to inform and improve implementation of online Accounting education in developing countries where the digital divide is staggering and digital inclusion and infrastructure for online education are at a precarious stage that cannot be remedied overnight.Social implicationsThe new context of Accounting education enables an increase in student enrolment because it does not require students to travel to or stay in a hostel for an extended period of time in order to earn an Accounting degree.Originality/valueThis study contributes to the Accounting education literature on emerging economies by providing new evidence of perception differences between higher education institutions and students. Education providers in emerging economies frequently adopt Western modes of online education without making structural adjustments. By empirically exploring students' opinions, this study challenges these managerial perceptions, and the findings will assist regulators and policymakers in making appropriate changes.