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Article
Publication date: 8 November 2022

Andrew C. Stuart, Stephen H. Fuller, Nicole M. Heron and Tracey J. Riley

This paper aims to review and synthesize the corporate social responsibility (CSR) disclosure literature in order to (1) develop a comprehensive definition of disclosure

Abstract

Purpose

This paper aims to review and synthesize the corporate social responsibility (CSR) disclosure literature in order to (1) develop a comprehensive definition of disclosure quality; (2) review the evolution of disclosure quality proxies used by accounting researchers; (3) describe the antecedents to disclosure quality; (4) describe the outcomes of disclosure quality; and (5) identify gaps in the current literature and offer suggestions for future research.

Design/methodology/approach

This study conducted a systematic review capturing articles examining CSR disclosure quality. The researchers first searched EBSCO, identifying all relevant articles by searching for “corporate social responsibility,” “CSR,” “ESG” and “sustainability reporting” anywhere in the article. Then, the results were filtered to focus on 23 of the most prominent accounting journals. The search resulted in 592 articles which were individually reviewed for relevance to the authors’ review. This study includes all articles that examine disclosure and provide insight into elements that influence disclosure quality or provide evidence of the effects of disclosure quality on user decision-making.

Findings

It is found that a comprehensive definition of CSR disclosure quality has yet to be developed and that proxies for CSR disclosure quality have evolved over time. This study synthesizes the literature on the antecedents of CSR disclosure quality, and how CSR disclosure quality affects users' decision-making and related outcomes. Overall, the review of this study suggests that assurance and a number of corporate features have important effects on disclosure quality. Also, high-quality disclosures are positively associated with many benefits to market participants.

Originality/value

This study complements Huang and Watson's (2015) CSR literature review by comprehensively reviewing and synthesizing the CSR disclosure quality literature that was only emerging when their review was published. Importantly, this study contributes to the CSR disclosure literature by developing a comprehensive definition of CSR disclosure quality that is grounded in the accounting literature and aligned with current frameworks.

Details

Journal of Accounting Literature, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0737-4607

Keywords

Article
Publication date: 16 August 2022

Jon Perkins, Cynthia Jeffrey and Martin Freedman

As more companies choose to disclose corporate social responsibility (CSR) information, it is important to gain an understanding of the quality of disclosures and factors…

Abstract

Purpose

As more companies choose to disclose corporate social responsibility (CSR) information, it is important to gain an understanding of the quality of disclosures and factors that influence quality. The purpose of this study is to examine the role of culture as a determinant of the quality of voluntary carbon emission disclosures.

Design/methodology/approach

This study uses regression analysis to test the influence of culture on the quality of carbon disclosures. The sample of this study comes from companies who voluntarily report to the carbon disclosure project. The authors operationalize the quality of disclosure using the Carbon Disclosure Leadership Index. The authors operationalize cultural values using both Hofstede’s metrics (Hofstede, 1980) and Project GLOBE (House et al., 2004).

Findings

This study predicts and finds a negative relationship between quality of disclosure and high individualism scores. This study also finds that the quality of disclosure is lower for companies located in countries with high power distance scores. The authors find that the quality of disclosure is higher for companies located in countries with gender/assertiveness scores that indicate a higher value on the environment than on the importance of economic growth. While quality is marginally related to uncertainty avoidance using Hofstede's measure, quality is not related to uncertainty avoidance using the Project GLOBE metric. The authors did not find a hypothesized negative significant relationship between quality and long-term orientation.

Practical implications

Quality is a measure of importance to users and regulators of disclosures.

Social implications

National culture is an important determinant of CSR disclosure quality.

Originality/value

This study extends the previous research by using a metric for quality based on an independent evaluation of disclosures and by the role of culture in a multi-country study.

Details

Sustainability Accounting, Management and Policy Journal, vol. 13 no. 5
Type: Research Article
ISSN: 2040-8021

Keywords

Book part
Publication date: 23 August 2021

Mohammad Nurunnabi

The study aims at reviewing a synthesis of disclosure, transparency, and International Financial Reporting Standards (IFRS) implementation in an attempt to provide…

Abstract

The study aims at reviewing a synthesis of disclosure, transparency, and International Financial Reporting Standards (IFRS) implementation in an attempt to provide directions for future research. Prior research overwhelmingly supports that the IFRS adoption or effective implementation of IFRS will enhance high-quality financial reporting, transparency, enhance the country’s investment environment, and foreign direct investment (FDI) (Dayanandan, Donker, Ivanof, & Karahan, 2016; Gláserová, 2013; Muniandy & Ali, 2012). However, some researchers provide conflicting evidence that developing countries implementing IFRS are probably not going to encounter higher FDI inflows (Gheorghe, 2009; Lasmin, 2012). It has also been argued that the IFRS adoption decreases the management earnings in countries with high levels of financial disclosure. In general, the study indicates that the adoption of IFRS has improved the financial reporting quality. The common law countries have strong rules to protect investors, strict legal enforcement, and high levels of transparency of financial information. From the extensive structured review of literature using the Scopus database tool, the study reviewed 105 articles, and in particular, the topic-related 94 articles were analysed. All 94 articles were retrieved from a range of 59 journals. Most of the articles (77 of 94) were published 2010–2018. The top five journals based on the citations are Journal of Accounting Research (187 citations), Abacus (125 citations), European Accounting Review (107 citations), Journal of Accounting and Economics (78 citations), and Accounting and Business Research (66 citations). The most-cited authors are Daske, Hail, Leuz, and Verdi (2013); Daske and Gebhardt (2006); and Brüggemann, Hitz, and Sellhorn (2013). Surprisingly, 65 of 94 articles did not utilise the theory. In particular, four theories have been used frequently: agency theory (15), economic theory (5), signalling theory (2), and accounting theory (2). The study calls for future research on the theoretical implications and policy-related research on disclosure and transparency which may inform the local and international standard setters.

Details

International Financial Reporting Standards Implementation: A Global Experience
Type: Book
ISBN: 978-1-80117-440-4

Keywords

Article
Publication date: 18 May 2022

Shidi Dong, Lei Xu and Ron P. McIver

Based on institutional theory, this paper aims to examine whether, and if so which, institutional forces influence the quality of China’s listed financial institutions…

Abstract

Purpose

Based on institutional theory, this paper aims to examine whether, and if so which, institutional forces influence the quality of China’s listed financial institutions’ (FIs) sustainability disclosures.

Design/methodology/approach

Using univariate statistical and multiple regression analyses, this study quantitatively examines the impacts of coercive pressure from the government and stock exchanges, imitation within subsectors and normative pressure from industry associations and regulators on the quality of China’s listed FIs’ sustainability disclosures. Assessment of the robustness of regression results uses panel random-effects and generalized methods of moments estimation.

Findings

Financial sector corporate social responsibility (CSR) disclosure quality did not increase dramatically following issue of the “Guiding Opinions on Establishing a Green Finance System.” However, a convergence in quality is found over time. State ownership concentration and state links to dominant shareholders negatively impact the quality of financial sector sustainability disclosures, whereas stock exchange index listing requirements and industry association reporting guidance have positive influences.

Research limitations/implications

First, data availability limits the sample to listed financial firms with RKS quality scores. Thus, results may not be generalizable to the broader listed and unlisted financial sector. Second, this study only examines the influence of external forces based on institutional theory. However, internal institutional forces, such as corporate governance, may require examination. This study’s results indicate that coercive pressure, as represented by issue of the “Green Finance” policy, has not yet prompted the financial sector to improve reporting quality; however, normative pressure has had significant influence in influencing FIs’ CSR practices, with China’s banks potentially taking a leading role.

Originality/value

The financial sector has a lower direct environmental impact than traditional polluting industries and different operating and reporting structures, features often used to argue for its exclusion in prior studies. However, its indirect environmental impact via lending and investing activities is significant, suggesting evidence on the determinants of sustainability disclosure quality is required. This study uses evidence from China’s financial sector to reduce this gap in the literature.

Details

Meditari Accountancy Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2049-372X

Keywords

Article
Publication date: 19 May 2022

Ahmad Ibrahim Karajeh

This study covers all banks listed on the Amman Stock Exchange. It used (1) dividend-paying status, dividend changes and dividend persistence to measure dividend quality

Abstract

Purpose

This study covers all banks listed on the Amman Stock Exchange. It used (1) dividend-paying status, dividend changes and dividend persistence to measure dividend quality, (2) a checklist instrument consisting of 40 items to measure financial disclosure quality, (3) nationality and (4) the percentage of females and males on the board of directors to measure board diversity. Hierarchical regression analysis was employed to investigate the influence of the board diversity on the relationship between financial disclosure quality and dividend quality.

Design/methodology/approach

This study investigates the relationship between financial disclosure quality and dividend quality among Jordanian-listed banks. Moreover, it examines the moderating effect of board diversity on the relationship between financial disclosure quality and dividend quality.

Findings

The results in this work imply that banks with high financial disclosure quality have high-quality dividends. Furthermore, nationality and females on the board of directors play a main role as moderators that influence managers' motivations toward the quality of financial disclosure practices and bank dividends. This paper shows that the boards in Jordanian banks have not changed dividend policies and tend to follow a long-term fixed strategy for paying earnings.

Originality/value

Because of the limited number of practical research on the nexus between financial disclosure quality and dividends quality, this study fills a gap in the literature by examining the relationship between them. In addition, a lack of research exists on the effects of board diversity on the nexus of financial disclosure quality and dividends quality. Therefore, this study makes an original contribution to the literature by using nationality and females and males on the board of directors as moderating variables to investigate the effects of board diversity on the relationship between financial disclosure quality and dividend quality among Jordanian banks.

Details

Asia-Pacific Journal of Business Administration, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1757-4323

Keywords

Article
Publication date: 12 May 2022

Teerooven Soobaroyen, Dinesh Ramdhony, Afzalur Rashid and Jeff Gow

This paper examines the evolution and determinants of the extent and quality of corporate social responsibility (CSR) disclosure in a developing country (Mauritius).

Abstract

Purpose

This paper examines the evolution and determinants of the extent and quality of corporate social responsibility (CSR) disclosure in a developing country (Mauritius).

Design/methodology/approach

CSR disclosures from annual reports of all listed companies were hand-collected for a 12-year period (2007–2018). The extent of disclosure was measured using a dichotomous index (41 items) while the quality of each disclosure item was assessed on a three-point scale. We rely on organisational legitimacy and resource dependence theories to investigate (1) trends in CSR disclosure extent and quality (2) the role of selected board and firm characteristics, namely the business qualifications of board members, extent of cross-directorships and the firm’s use of employee volunteering scheme, on CSR disclosure.

Findings

CSR disclosure extent, notably in relation to environment and human resources, gradually increased to an overall score of 45%. Comparatively, the quality of disclosures was low, with an average score of 20%. The proportion of business-qualified directors is only positively associated with CSR disclosure extent. The extent of cross-directorships is negatively associated with CSR disclosure quality while employee volunteering is positively associated with disclosure extent and quality.

Originality/value

The findings reveal the relatively low quality of information being disclosed, and in spite of CSR and governance reforms, there seems to be limited influence from the board of directors and their networks; prompting a call to foster greater board engagement on CSR matters. The results also highlight the need for a multi-dimensional assessment of CSR disclosure.

Details

Journal of Accounting in Emerging Economies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2042-1168

Keywords

Article
Publication date: 2 March 2022

Hani Alkayed and Bilal Fayiz Omar

This study aims to investigate the determinants of the extent and quality of corporate social responsibility disclosure (CSRD) in Jordan. The study examines a number of…

Abstract

Purpose

This study aims to investigate the determinants of the extent and quality of corporate social responsibility disclosure (CSRD) in Jordan. The study examines a number of factors that influence the extent and quality of CSR disclosure, such as corporate characteristics, corporate governance and ownership structure.

Design/methodology/approach

A quantitative approach and a content analysis technique is used to measure the extent and quality of CSRD from annual reports. The sample is drawn from the annual reports of 118 Jordanian companies between 2010 and 2015. A CSRD index is constructed, which includes the disclosures of the following categories: environmental, human resources, product and consumers, and community involvement. This is the first study that presents a new measurement for CSR disclosure quality by using images and charts in a seven-point scale measurement.

Findings

The result reveals that the extent of CSRD is higher than quality in Jordan. Regarding the determinants of CSR disclosures, the following factors were found to have a significant relationship with both the extent and quality of CSRD: board size, non-executive directors, age of firm, foreign members on the board, number of boards meetings, the presence of audit committees, big 4, government ownership, size of firm and industry type. Non-executive directors was found to have a significant correlation with the extent of CSRD.

Research limitations/implications

The current study has some limitations; first, the study findings are limited to the Jordanian environment. Second, the study adopted a purely quantitative method, and future research could include interviews and questionnaires to gather data from financial managers and chief executive officers (CEOs). Third, the potential influences on the level and quality of CSR are not limited to the variables tested in this study. Future research can be done on new determinants, such as CEO interlocking and profitability. Finally, the sample included companies from two main sectors – the services and industrial sectors; thus, this limited the results to these two main sectors.

Practical implications

Practitioners, as firms, should develop new strategies and ensure that CSR is included in their reports. Thus, companies can achieve legitimacy for their products and activities. Policymakers must consider introducing new laws that mandate CSRDs since it has many advantages for companies and society. In addition, this research suggests amending the law to require companies to have 33% of their directors be non-executives since this will remove the negative effect on CSR disclosure. Investors must pay attention to the social activities of the companies they invest in, as CSR could have a positive effect on their market value.

Social implications

The study has indicated that Jordanian companies became increasingly more involved in CSR activities, as this growth in CSRD is linked with global increases in CSR. Moreover, the study has revealed that the highest category of CSR disclosures is related to products or services and employee information. On the other hand, the lowest category of CSR disclosures is related to community and other disclosures (extent) and environmental disclosures (quality). Furthermore, the results show that the services sector was found to have more disclosures regarding employees and community, whereas the industrial sector was more concerned about environmental and product information.

Originality/value

To the best of the authors’ knowledge, this is the first study that presents a new measurement for CSR disclosure quality by using images and charts in a seven-point scale measurement. This new seven-point scale will be adopted to distinguish between poor and excellent disclosures. In addition, to the best of the authors’ knowledge, this is the first study in Jordan which examines the determinants of the extent and the quality of CSR for three categories, namely, corporate characteristics, corporate governance and ownership structure.

Details

Journal of Financial Reporting and Accounting, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1985-2517

Keywords

Article
Publication date: 1 April 2022

Kathyayini Kathy Rao, Roger Leonard Burritt and Katherine Christ

There is a growing concern over the need for greater transparency of quality information by companies about modern slavery to contribute toward elimination of the…

Abstract

Purpose

There is a growing concern over the need for greater transparency of quality information by companies about modern slavery to contribute toward elimination of the practice. Hence, this paper aims to examine factors behind the quality of voluntary modern slavery disclosures and major sources of pressure on Australian company disclosures in a premodern slavery legislated environment.

Design/methodology/approach

Content analysis and cross- sectional regression modeling are conducted to analyze factors determining the quality of voluntary modern slavery disclosures of the top 100 firms listed on the Australian Stock Exchange and their implications for institutional pressures.

Findings

Results indicate that size, assurance by Big-4 firms and publication of stand-alone modern slavery statements are significant drivers of disclosure quality in the sample. Profitability, listing status and the degree of internationalization are found to be unrelated to the quality of voluntary modern slavery disclosures. Industry classification is significant but only partly supports the prediction, and further investigation is recommended.

Practical implications

This paper provides a foundation for regulators and companies toward improving the quality of their modern slavery risk disclosures with a particular focus on prior experience, assurance and size. In practice, contrary to suggestions in the literature, results indicate that monetary penalties are unlikely to be an effective means for improving the quality of modern slavery disclosure. Results of the study provide evidence of poor quality of disclosures and the need for improvement, prior to introduction of modern slavery legislation in Australia in 2018. It also confirms that regulation to improve transparency, through the required publication of a modern slavery statement, is significant but not enough on its own to increase disclosure quality.

Originality/value

To the best of the authors’ knowledge, this is the first research examining company level factors with an impact on voluntary modern slavery disclosure quality and the links to institutional pressures, prior to the introduction of the Commonwealth Modern Slavery Act 2018.

Details

Pacific Accounting Review, vol. 34 no. 3
Type: Research Article
ISSN: 0114-0582

Keywords

Article
Publication date: 14 January 2022

Husam Ananzeh

This paper is motivated by the absence of rules that govern the practice of corporate social responsibility disclosure (CSRD). The purpose of this paper is to investigate…

Abstract

Purpose

This paper is motivated by the absence of rules that govern the practice of corporate social responsibility disclosure (CSRD). The purpose of this paper is to investigate the corporate governance factors that impact the quality of CSRD. This study further examines the moderating role of family ownership and educational qualifications of female directors on the relation between board gender diversity and CSRD quality.

Design/methodology/approach

This study adopts a sample of 94 non-financial companies listed on the Amman Stock Exchange to collect data on CSRD based on a checklist of 41 items for seven years from 2010–2016. The quality of CSRD is measured using a four-dimensional method that encompasses relative quantity, disclosure intensity, degree of accuracy and management outlook.

Findings

This study finds that CSRD quality is far from satisfactory in Jordan. The results also suggest that board size, auditor type, company size and profitability are positively associated with CSRD quality. On the other hand, factors such as chief executive officer duality, board diversity, ownership concentration and financial leverage are negatively associated with CSRD quality. In addition, the results of the empirical analysis suggest that the negative relationship between the quality of CSRD and the presence of female board members is stronger for family-owned companies. By contrast, the negative relationship between the quality of CSRD and the presence of female board members is weakened when the company has more educated, skilled and qualified female directors.

Originality/value

The originality of this study is manifested in the development of a quantitative measurement of CSRD quality.

Details

Society and Business Review, vol. 17 no. 2
Type: Research Article
ISSN: 1746-5680

Keywords

Article
Publication date: 22 November 2011

Florence Cavélius

Institutional investors use the information disclosed by listed companies to analyze the performance of their investments. The purpose of this paper is to open the “black…

1359

Abstract

Purpose

Institutional investors use the information disclosed by listed companies to analyze the performance of their investments. The purpose of this paper is to open the “black box” of the construction of financial disclosure by analyzing the internal reporting systems of firms with reference to the information disclosed.

Design/methodology/approach

Using indexes, the quality of the financial disclosure and the internal reporting systems are measured, and analyzed with a view to finding some links between them. It is expected that the quality of disclosure is dependent on the quality of the internal reporting.

Findings

Complex interactions between internal reporting and financial disclosure are revealed, which leads to the identification of a typology of practices. The dependence of the relationship may be troubled by the willingness of the firm to communicate, or by the internal methods of control. According to the various cases, different levels of usefulness of the information for the investor are expected.

Originality/value

This paper is a first attempt to analyse information disclosed by firms with regards to the internal information at their disposal.

Details

Journal of Applied Accounting Research, vol. 12 no. 3
Type: Research Article
ISSN: 0967-5426

Keywords

1 – 10 of over 22000