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We investigate the interaction of debt covenants and tax accounting on the adoption of Financial Interpretation No. 48 (FIN 48). We examine how firms respond to the potential tightening of covenant slack upon FIN 48 adoption and whether these actions are penalized by creditors and anticipated by equity markets. We find that upon FIN 48 adoption, the majority of sample corporate borrowers increase their tax reserves and reduce equity. Firms close to debt covenant violation were even more likely to increase tax reserves upon FIN 48 adoption; however, the size of the adjustment was relatively smaller, suggesting that the FIN 48 standards limited, but did not eliminate, firms use of discretion in reporting uncertain tax positions to avoid costly covenant violations. For firms near net worth debt covenant violation, the act of decreasing equity upon FIN 48 adoption imposes real economic costs, as the average cost of debt increased by 43 basis points. Finally, we extend prior research on the market response to FIN 48 by showing how the market response to FIN 48 adoption is a function of debt covenant slack and tax aggressiveness. Specifically, the cumulative abnormal return at the FIN 48 exposure draft release date is negative only for tax aggressive firms that are close to debt covenant violation.

This research aimed to determine how COVID-19 affected Micro small and medium enterprises’ (MSMEs) participation in sustainable development goals (SDGs) and their adoption of Fin-tech developing nations like India. Involving women in the workforce through microenterprises is crucial to accomplishing the SDGs, and its subsection is focused on decent work and small industries. Data related to knowledge of digital finance was collected using a convenience sample method. Nonetheless, descriptive research was conducted, and although interesting, no definitive findings could be determined. Women entrepreneurs aged between 25 and 35 years provided input into creating this link based on the United Theory of Acceptance and Use of Technology (UTAUT) concept. Using SMART-PLS, we found a significant relationship between the UTAUT model of sustainable development and the level of Fin-tech literacy among women in low-income households in developing countries like India. However, we also know that MSMEs’ adoption of Fin-tech and SDG is less tightly linked to the UTUAT model. The trend towards online transactions or digital payments and the widespread adoption of digital technology applications are changing the face of the global economy. The COVID-19 period saw the rise of contactless transactions as the primary payment method. Because of this shift in public opinion, small- and medium-sized enterprises (SMEs) have begun implementing Fin-tech for long-term growth. People worldwide use it for transactions and other economic functions. However, there is a scarcity of research incorporating this kind of data from India and the rest of the developing world.

Schiff and Hoffman (1996) found evidence that nonfinancial measures explain more of the variance in evaluations that focus on individual retail department managers while financial measures explain more variance in evaluations of the overall department. These findings are consistent with Attribution Theory, which holds that evaluators of performance ascribe cause to individual or environmental factors as they make judgments. This study expands this research by being the first to examine whether financial and nonfinancial measures affect multidivisional balanced scorecard performance evaluations differently when the focus of the evaluation is on the individual division president versus when the focus is on the overall division. The results of this study suggest that when evaluating individual performance, nonfinancial measures clearly affect the performance evaluations more than financial measures. When the focus is on the division, the influence of nonfinancial and financial measures is not differentiated. Additionally, the results suggest that the participants perceived nonfinancial measures to be more controllable than financial measures.

We examine the relationship between tax-related accounting misstatements and changes in the uncertain tax benefits accrual account in the year of the disclosure of a misstatement. We find that the disclosure of a tax-related misstatement is associated with an increase in unrecognized tax benefits during that year. We show that the increase in unrecognized tax benefits in the year of disclosure is from uncertain tax positions taken in prior periods. Overall, this finding is consistent with increase in financial reporting conservatism upon disclosure of tax-related accounting misstatement.

In recent times, mobile banking has become the best alternative for transactions associated with payments like bills, fees, and peer-to-peer payments. Therefore, the pace of adoption is increasing day after other. However, the numbers of customers are not equal to the expectations as there are several challenges and threats hindering in the way of excellence and growth of mobile banking. Therefore, this chapter has been written purposively to address all the elements that are associated with the use of mobile banking with special emphasis on Pakistan and other developing sides of Asia. In fact, concern towards Asian sides is mandatory as the continent has the massive charm to attract users towards the use of mobile banking, but there is a need for proper policy and concern from stakeholders in order to give a push to the technology, which is fruitful for society, environment, as well as economy. The study includes an in-depth discussion on factors that need attention to make the study implicative and thorough for conducting further research in the field of Fin-Tech and mobile banking.

To better detect potential audit issues, since 2010, the Internal Revenue Service has required firms to file a separate schedule individually disclosing each of their uncertain tax positions (UTPs). This study uses an experiment to examine how this increase in detection risk from the newly created IRS schedule influences both a firm’s tax reporting and financial reporting concurrently. We find that corporate tax professionals were more likely to recommend an UTP when their firm had a strong UTP reporting quality, regardless of the detection risk level of the reporting environment. However, we find an interaction effect for the recording of the tax reserve. In a low detection risk environment, corporate tax professionals recorded a higher (lower) tax reserve when their firm had a weak (strong) UTP reporting quality. However, in a high detection risk environment, corporate tax professionals recorded a lower (higher) tax reserve when their firm had a weak (strong) UTP reporting quality. Overall, the results provide insight into the dual nature of UTP reporting and the determinants that influence each reporting behavior.

The aim of this chapter is to understand effects of the recent crisis on the financial constraints that small and medium size enterprises have experienced in emerging economies. Using the firm level survey data provided by the World Bank, a descriptive analysis is conducted by calculating the average of the financial obstacles that the firms had experienced before and after the crisis, and the existence of statistical difference between the two periods is tested. The results indicate that the small and medium size enterprises suffer more from financial constraints relative to large firms. Financial constraints that the small and medium size firms had experienced are largely affected by the recent global financial crisis, relative to the large firms. However, effects of the financial constraints on real variables such as investment, innovation, and research and development expenditures cannot be examined due to data limitations. This chapter contributes to the limited literature of financial constraints experienced by the small and medium enterprises in emerging economies by taking the effect of the recent global financial crisis into account. The novelty of this chapter comes from the dataset: “The World Bank’s World Business Environment Surveys,” which provides a large sample of emerging countries.

This contribution discusses how multinational firms could serve poorer consumers in developed regions like Europe and through which business models, beyond the traditional corporate social responsibility (CSR) actions. MNEs have still limited capacity to address poverty in developed countries, notwithstanding some experience they have matured in developing markets and the striking figures of rising poverty in Europe and the United States. This research focuses on a specific issue: the role of MNEs in addressing poverty in developed markets, either leveraging on their previous expertise gained in developing countries or designing novel ad hoc solutions. The capacity of Western multinationals to tackle effectively the challenge of profitably doing business at the base of the pyramid (BoP) represents a controversial issue in literature and an intriguing topic for international business studies. The empirical research is based on three case studies. The companies have already gained experience in targeting BoP markets in developing countries. They are analyzed in order to understand better their approaches and their applicability in Europe.