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This whistleblowing case study engages students in discussions about when and how to disclose differences of opinion on a revenue recognition matter with higher-ups in an organization. Factors to consider include the morality of whistleblowing, confidentiality obligations, the rules of conduct in the American Institute of Certified Public Accountants (AICPA) Code, Sarbanes–Oxley Act (SOX), Dodd–Frank, and the US Supreme Court ruling in Digital Realty, Inc. v. Somers that addresses when to report matters to the Securities and Exchange Commission (SEC). Case questions are designed to promote students’ critical thinking skills, ethical reasoning skills, and decision-making. A flowchart of AICPA ethics rule 2.130.020 (Subordination of Judgment) provides the framework for making decisions when differences exist in financial reporting. The case provides learning objectives, implementation guidance, and teaching notes. The case was used in an accounting ethics course taught at the undergraduate senior level but can also be used in auditing, fraud examination, and advanced financial reporting courses.

The purpose of this research is to examine the impact of audit committee financial experts on the risk of financial corruption in public companies.

A time-lagged, matched-pairs sample of 352 corporations was utilized to test the study's hypotheses (176 financially corrupt firms plus 176 compliant firms). To uncover financially corrupt firms, 2,895 Accounting and Auditing Enforcement Releases from the Securities and Exchange Commission were thoroughly evaluated.

The results show that financial experts on audit committees generally increased financial corruption. However, the impact was reversed when audit committees had three or more financial experts, showing that having at least three financial experts reduced financial corruption.

The study's findings call into question the long-held practice of appointing at least one financial expert to audit committees. This study offers a novel approach to improve corporate oversight and reduce financial corruption by having at least three financial experts on audit committees.

The primary objective of this research is to chronicle how the Environmental Protection Agency (EPA) and other United States Federal Government Agencies (USFGA) agencies have played a role in shaping the trajectory of financial reporting for sustainability, with a particular emphasis on triple bottom line (TBL). This exploration extends to other indexes reporting sustainability data encompassed within financial, social and environmental reporting.

This study adopts an illustrative methodology, utilizing data sourced from governmental, business and international organizational documents.

Sustainability accounting predominantly finds its place within the framework of TBL. However, it is crucial to note that sustainability reporting remains voluntary rather than mandatory. Nevertheless, accounting firms and professional accounting societies have embraced it as a supplementary facet of financial accounting reporting.

The research highlights the historical evolution of sustainability within the USFGA and corporate entities. Corporations’ interest in accounting for sustainability performances has significantly contributed to the emergence of voluntary sustainability accounting rules, as embodied by the TBL.

Taking advantage of a unique measure of corporate culture obtained from advanced machine learning algorithms, this study aims to explore how corporate culture strength is influenced by board independence, which is one of the most crucial aspects of the board of directors. Because of their independence from the corporation, outside independent directors are more likely to be unbiased. As a result, board independence is commonly used as a proxy for board quality.

In addition to the standard regression analysis, the authors execute a variety of additional tests, i.e. propensity score matching, an instrumental variable analysis, Lewbel’s (2012) heteroscedastic identification and Oster’s (2019) testing for coefficient stability.

The results show that stronger board independence, measured by a higher proportion of independent directors, is significantly associated with corporate culture. In particular, a rise in board independence by one standard deviation results in an improvement in corporate culture by 32.8%.

Conducting empirical research on corporate culture is incredibly difficult due to the inherent difficulties in recognizing and assessing corporate culture, resulting in a lack of empirical research on corporate culture in the literature. The authors fill this important void in the literature. Exploiting a novel measure of corporate culture based on textual analysis, to the best of the authors’ knowledge, this study is the first to link corporate culture to corporate governance with a specific focus on board independence.

The purpose of this research paper is to investigate the perspectives of key stakeholders on strategies to improve the effectiveness of audit committees (ACs) in African economies, with a specific focus on the Libyan banking sector.

The study uses a mixed-methods approach, combining questionnaire surveys and semi-structured interviews. The data collection process involves gathering responses from participants through questionnaires and conducting in-depth interviews to gain deeper insights into the subject matter.

The research findings highlight several key points. Firstly, fortifying Libya’s accounting and auditing profession emerges as the most widely endorsed suggestion for enhancing AC effectiveness. Secondly, participants identified various actions that can strengthen ACs, including appointing members with financial expertise, refining the legal requirements governing AC responsibilities, securing board support, enhancing Libya’s legal and regulatory framework, adequately compensating AC members and reducing government intervention in AC practices.

This research contributes to the field of corporate governance by providing valuable insights into the perspectives of stakeholders on enhancing AC effectiveness in the Libyan banking sector, within the broader context of African economies. The findings offer actionable plans for regulators and policymakers seeking to improve AC effectiveness in Libya.

This paper undertakes an extensive and systematic review of the literature on earnings management (EM) over the past three decades (1992–2022). Furthermore, the study identifies emerging research themes and proposes future avenues for further investigation in the realm of EM.

For this study, a comprehensive collection of 2,775 articles on EM published between 1992 and 2022 was extracted from the Scopus database. The author employed various tools, including Microsoft Excel, R studio, Gephi and visualization of similarities viewer, to conduct bibliometric, content, thematic and cluster analyses. Additionally, the study examined the literature across three distinct periods: prior to the enactment of the Sarbanes-Oxley Act (1992–2001), subsequent to the implementation of the Sarbanes-Oxley Act (2002–2012), and after the adoption of International Financial Reporting Standards (2013–2022) to draw more inferences and insights on EM research.

The study identifies three major themes, namely the operationalization of EM constructs, the trade-off between EM tools (accrual EM, real EM and classification shifting) and the role of corporate governance in mitigating EM in emerging markets. Existing literature in these areas presents mixed and inconclusive findings, suggesting the need for further theoretical development. Further, the study findings observe a shift in research focus over time: initially, understanding manipulation techniques, then evaluating regulatory measures, and more recently, investigating the impact of global accounting standards. Several emerging research themes (technology advancements, cross-cultural and cross-national studies, sustainability, behavioral aspects and non-financial indicators of EM) have been identified. This study subsequent analysis reveals an evolving EM landscape, with researchers from disciplines like data science, computer science and engineering applying their analytical expertise to detect EM anomalies. Furthermore, this study offers significant insights into sophisticated EM techniques such as neural networks, machine learning techniques and hidden Markov models, among others, as well as relevant theories including dynamic capabilities theory, learning curve theory, psychological contract theory and normative institutional theory. These techniques and theories demonstrate the need for further advancement in the field of EM. Lastly, the findings shed light on prominent EM journals, authors and countries.

This study conducts quantitative bibliometric and thematic analyses of the existing literature on EM while identifying areas that require further development to advance EM research.

This study aims to examine whether two periods of extreme market conditions – the governance crisis and Sarbanes-Oxley Act regulatory shock of 2002 and the 2007–2008 global financial crisis – incrementally impacted the self-fulfilling prophecy effect, by examining the propensity of US firms receiving going concern modification (GCM) opinions to go bankrupt relative to their non-GCM distress risk-matched counterparts during these two crisis periods.

To assess the potential influence of the governance/regulatory shock of 2002 and the global financial crisis moderate or mitigate the self-fulfilling prophecy effect, the authors use multivariate logit analysis, regressing t + 1 bankruptcy status on time t GCM and other bankruptcy determinants, interacting crisis period dummies with the GCM variable.

GCM firms were more likely to declare bankruptcy than their distressed non-GCM counterparts, confirming prior research documenting the existence of a self-fulfilling prophecy effect. The authors also find that the self-fulfilling prophecy effect was exacerbated by the governance crisis/Sarbanes-Oxley Act regulatory shock, but not the global financial crisis, a financial/banking sector shock.

This study contributes to the financial crisis and auditing literatures by examining whether exogenous shocks exacerbate the self-fulfilling prophecy effect. The present analysis and findings have implications for future academic research related to systemic shocks and for auditors in documenting the inducement effect arising from the issuance of GCMs during crisis periods.

The purpose of this study is to examine both accruals and real earnings management in a large sample of private companies in the UK using data from 2002 to 2009 following the implementation of the UK Act of 2006.

A panel data analysis using GMM has been adopted to examine the objectives of the study and answer the research questions.

The results of this study showed that the imposition of the Companies Act of 2006, on its own, did lead to changes in earnings management behaviour, in both accruals-based earnings and real earnings management. Moreover, this study also found that firms that chose to provide IFRS financial statements tended to show less discretionary earnings management, however, it tended to have no impact on real earnings management.

In accordance with the research findings, standard setters with some insight tend to determine how capital markets see the information provided under the legislation such as the UK Act of 2006 in developed countries and thereby ensure long-term sustainability in a modern and sophisticated financial world. This study provides an insight into the successful implementation of the UK act of 2006, and its influence on the aspect of financial reporting.

The novel conclusion reached in the study is that there exists a strong and direct link between the smooth implementation of UK Act of 2006 and the practices of both accruals and real earnings management in real-world business and financial scenarios, particularly, in private companies.