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This study examines how bilateral international trade among mandatory International Financial Reporting Standards (IFRS) adopter countries moderates the relation between IFRS adoption and firms’ financial reporting quality.

The authors use data from 2007 to 2015 and focus on publicly listed firms from non-European Union countries that adopted IFRS on a mandatory basis.

The authors find that the interaction between mandatory IFRS adoption and a country’s bilateral trade with other countries using IFRS is negatively and significantly related to accruals-based earnings management, which is an inverse measure of financial reporting quality. This result is driven by firms in less developed countries. The improvement in accounting quality is for firms located in countries that both fully and partially adopt IFRS. The authors also find a significant and negative coefficient for the relation between real earnings management and the interaction between mandatory IFRS adoption and a country’s bilateral trade with other IFRS countries in the post-global financial crisis period.

Overall, the authors’ results are consistent with the notion that the mandatory adoption of IFRS creates a positive externality where firms improve their accounting quality because increased financial statement comparability means that foreign customers and suppliers can monitor the quality of earnings more easily.

This study aims to examines both accrual and real-based earnings management (EM) behavior of listed corporations in tax-free countries during different economic situations. It also addresses the link between firm- and country-level determinants of accrual and real-based EM and explores economic conditions' influence on these determinants.

The study examines 1,608 firm-years, covers sixteen years (2004–2019), clustered into three periods according to the global financial crisis (GFC): four years prior (2004–2007), two years during (2008–2009), and ten years post the GFC (2010–2019). We employ the modified Jones model (performance-matched) developed by Kothari et al. (2005) to measure the accrual-based EM (positive and negative discretionary accrual EM) and the three levels model for Dechow et al. (1998) to measure the real-based EM (cash flow from operating, discretionary expenses and abnormal production cost).

The study finds a significant increase in EM practices in the listed corporations in tax-free countries during the economic downturn. These corporations are found to understate their earnings during the economic stress period. Simultaneously, the firm-level determinants of EM practices were at the same level of significance during different economic conditions in accrual-based EM. In contrast, the country-level EM determinants vary based on the economic conditions.

Financial reports' users gain a deep understanding of the quality of financial reports in the context of tax-free country. And, the study outcomes inspire policymakers to develop relevant legislation to mitigate financial reports' risk and adequately protect the financial reports' users.

This study examines whether country-level financial integration affects firms' accounting choices and the quality of financial information.

This study employs Propensity Score Matching (PSM), and panel regressions of a large sample of data from 20 emerging markets over the period 1987–2018.

This study finds evidence that increased level of financial integration is significantly positively associated with firms' accruals earnings management (AEM) and real earnings management (REM).

Findings in the study have implications for standard-setting bodies that aim to enhance the usefulness of financial reporting quality. The study also has implications for various initiatives by governments in emerging markets aimed at raising investor confidence and fostering stock market development through greater financial integration.

Findings in the study have implications for standard-setting bodies that aim to enhance the usefulness and quality of financial reporting. The findings can be of interest to analysts, auditors and other monitoring institutions who play a crucial role in detecting earnings management and reducing information asymmetry. Finally, the study has implications for various initiatives by governments in emerging markets aimed at raising investor confidence and fostering stock market development through greater financial integration.

Findings in the study reveal how country-level financial integration affects accruals and real earnings management in a sample of firms from 20 emerging markets. Further, the study adds to the growing body of literature on emerging markets where capital markets mechanisms, regulatory environment and firm's corporate governance are distinct to developed markets.

This study aims to examine the impact of national culture on classification shifting in Eastern European Member States of EU Eastern European countries (EEU) vis-à-vis the Western Member States of EU (WEU). The EEU provides a unique sample to study the quality of financial reporting that the authors measure with classification shifting given that for more than five decades they were following the model of a centrally planned economy, where market-based financial reporting was absent. Yet, the EEU transitioned to a market-based economy and completed its accession to the EU.

This study uses a panel data set of firm year observations from 1996 and 2020 that covers the full transition of EEU. This empirical analysis is based on fixed effects panel regression analysis where the authors report a plethora of identifications.

This study finds classification shifting in the EEU countries since their transition to the market-based economy, though they have no long record of market-based financial reporting. This study also notices that cultural factors are associated with classification shifting across all Member States of the EU. This study further examines the impact of interactions between cultural characteristics and special items and reveal variability between WEU and EEU. As part of the robustness analysis, this study also tests the impact of culture on real earnings management measures for both WEU vs EEU, confirming the variability of the impact of culture on earnings management.

Future research could explore the role of religion differences in WEU vis-à-vis EEU states, as they are also subject to cultural differences.

The findings are important for regulators, external monitors and investors, as they show that cultural factors affect earnings management with some variability across countries in the EU, and they should be acknowledged in policymaking.

The findings show that cultural differences between EEU and the “old” Member States of the EU could explain classification shifting.

To the best of the authors’ knowledge, this is the first study that sheds light on the impact of national culture on classification shifting in EEU of EU vis-à-vis the “old” WEU of EU.

This study aims to investigate the effect of income and asset diversification on earnings management using discretionary loan loss provisions (LLP) in banks, and the role of risk level in mediating this effect.

A sample of banks operating in Middle East and North Africa countries was used to test the mediation model of Baron and Kenny (1986) with different measures of diversification and risk.

The results show that bank income and asset diversification have unique and combined effects on earnings management. The results also support the idea that a risk-mediating effect contributes to explaining this relationship among banks. Specifically, bank diversification strategies positively affect LLP-based earnings management by increasing bank risk. This result is relevant for conventional banks. However, only a direct and positive effect of diversification strategies on LLP-based earnings management can be observed in Islamic banks, and the indirect effect is not supported.

This study extends previous research by examining the unique and combined effects of income and asset diversification strategies on earnings management in the banking sector. Specifically, it provides new evidence that diversification strategies increase LLP-based earnings management, both directly and indirectly, through bank risk.

The purpose of this study is to investigate the moderating effect of board gender diversity on the relationship between sustainability reporting (SR) and earnings management (EM) in the East Africa Community (EAC).

The study analyzed a sample of 71 publicly traded companies from 2011 to 2021.

The study finds that both SR and board gender diversity have a negative and significant effect on EM and that board gender diversity moderates the relationship between SR and EM.

The findings suggest that boards should support the adoption of SR and increase female representation as a practical way to reduce EM. Policymakers should also implement appropriate measures, such as imposing mandatory SR and gender quotas on corporate boards, to address EM.

This research adds to the limited knowledge of SR and EM in the EAC and also fills a gap in the existing literature by investigating the influence of board gender diversity on the link between SR and EM.

The purpose of this paper is to examine the relationship between accounting conservatism and pledging of shares by controlling shareholders of a firm to obtain a loan. The pledging of shares by the controlling shareholders of a firm results in alterations to the payoff and risk structure for these shareholders. Since accounting numbers have valuation implications, pledging of shares by a controlling shareholder has an impact on accounting policy choices made by the firm. The purpose of this paper is to examine the impact of controlling shareholder share pledging to obtain a loan on a specific accounting policy choice, namely, conservatism.

The paper uses a large data set from India comprising 14,786 firm years consisting of 1,570 firms belonging to 58 industries for a period of 11 years (2009–2019). The authors use ordinary least square regression with robust standard errors. The authors conduct robustness checks and the results are consistent across alternative statistical methodologies and alternative measures of the primary dependent and independent variables.

The primary results show that pledging of shares by the controlling shareholders results in higher conditional conservatism and lower unconditional conservatism. Further analysis reveals that the relationship is stronger when the controlling shareholder holds a majority ownership in the firm. Additionally, the results show that for business group affiliated firms, which are unique to developing countries, both the conditional and the unconditional conservatism are incrementally lower when the controlling shareholder pledges the shares. For family firms with a family member as CEO, the conditional conservatism is incrementally higher and the unconditional conservatism is incrementally lower. Finally, the authors show that the results hold when the pledge intensity variable is measured with a one-year lag and finally, the authors show that conditional conservatism is incrementally higher in the year of the increase in the pledge and the year after, but there is no such incremental impact on unconditional conservatism.

The research is limited to the listed firms in India. Since majority of the listed firms are controlled by families and the family firms around the world are heterogeneous the findings of the research may not be applicable to other countries.

The study has implications for policy-making and monitoring of the pledging by the controlling shareholders. It also helps the investors in making investment decisions with respect to family firms in India.

The study is unique as it focuses on the relationship between pledging of shares by the controlling shareholders and its impact on accounting conservatism. To the best of the authors’ knowledge, this is the first research integrating these two aspects.

The study aims to examine whether board gender diversity and corporate social responsibility (CSR) affect real earnings management (REM) practices of public companies in Nigeria.

The study analyzes data of public companies for the period of 2011 through 2020. Data on board gender diversity, CSR and REM were collected from audited financial statements.

The empirical findings show that companies with greater diverse board are effective in restraining REM, thus supporting the theoretical framework of the study. Also, the result provides strong evidence of association between CSR performance and REM for policy management decision.

The study is constrained by not considering all public companies in the country. Furthermore, it considered only gender among numerous important board attributes and environmental, social and governance (ESG) among numerous CSR attributes. Hence, future studies should consider other important attributes on REM and important attributes of board diversity and CSR on real earnings management.

To the best of the authors’ knowledge, this study is the first to investigate the relationship between heterogeneous board gender diversity, CSR via ESG and REM in emerging markets such as Nigeria. Therefore, it provides appropriate treatment of CSR with science and technology via EGS viewpoint of organizational operations and behavior of managing earnings. Therefore, developing better policy management for sustainable development

This paper aims to review, discuss and synthesize the literature focusing on the Indian initial public offering (IPO) market. Understanding the Indian IPO market can help answer broader corporate finance questions. The growing number of IPOs in the Indian context, coupled with the increasing importance of the Indian economy in the global market, makes this review an essential topic.

The systematic literature review methodology was adopted to review 111 papers published between 2002 and 2021. The authors used the Preferred Reporting Items for Systematic Reviews and Meta-Analyses approach during the review process. Additionally, the authors use a bibliometric review methodology to examine the pattern and trend of research in this area of interest. Furthermore, the authors conduct a critical review and synthesis of the top 20 papers based on citations. The authors also use a co-citation network and manual content analysis method to identify key research themes.

This review helps in identifying major themes of research in this area of interest. The authors find that majority of the research has focused on IPO performance whereas post-IPO performance needs critical attention as well. The authors develop a comprehensive framework and future research agenda based on their discussion.

Meta-analysis of the literature can be conducted to gain better insights into the findings of prior studies.

This review paper develops a comprehensive overview on Indian IPO market which can be of interest not only to Indian scholarship. India as an economy is increasingly gaining attention at the global level. Hence, the future research objectives as illustrated in the study can be of interest for the global scholarship also.

To the best of the authors’ knowledge, this is the first comprehensive review paper that examines, synthesizes and outlines the future research agenda on Indian IPO studies. This review can be useful for researchers, business policymakers, finance professionals and anyone else interested in the Indian IPO market.

The purpose of this study is to investigate the moderating role of honesty-humility of financial managers on aggressive financial reporting behavior.

To test the research hypotheses, a scenario-based questionnaire taken from Brink et al. (2018) was used. Using a cross-sectional survey design, the authors collected primary data of 160 financial managers of firms in Iran using structured questionnaires. The research sample selected was based on Cohen et al.’s (2000) table. To test the research hypotheses, analysis of variance was used.

The results showed that increasing honesty-humility of financial managers decreases the impact of social pressure and risk appetite interaction on aggressive financial reporting. In addition, the results of further analysis showed that reducing the honesty-humility of financial managers increases the impact of risk appetite on aggressive financial reporting. Moreover, the results indicate that reducing the honesty-humility of financial managers increases the impact of social pressure on aggressive financial reporting.

This finding provides significant evidence for auditor, managers and policymakers in Iran. Policymakers, auditor and company managers can emphasize compliance with the code of ethics, internal control and corporate governance to increase ethics and reduce negative economic consequences.

To the best of the authors’ knowledge, this is the first case in an emerging economy to survey the moderating role of honesty-humility of financial managers on aggressive financial reporting behavior. Also, this study contributes to understanding how factors at the individual, social and organizational level combine to influence financial managers’ aggressive financial reporting behavior.