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This study aims to develop a model based on the financial variables for better accuracy of financial distress prediction on the sample of private French, Spanish and Italian firms. Thus, firms in financial difficulties could timely request for troubled debt restructuring (TDR) to continue business.

This study used a sample of 312 distressed and 312 non-distressed firms. It includes 60 French, 21 Spanish and 231 Italian firms in both distressed and non-distressed groups. The data are extracted from the ORBIS database. First, the authors develop a new model by replacing a ratio in the original Z”-Score model specifically for financial distress prediction and estimate its coefficients based on linear discriminant analysis (LDA). Second, using the modified Z”-Score model, the authors develop a firm TDR probability index for distressed and non-distressed firms based on the logistic regression model.

The new model (modified Z”-Score), specifically for financial distress prediction, represents higher prediction accuracy. Moreover, the firm TDR probability index accurately depicts the probabilities trend for both groups of distressed and non-distressed firms.

The findings of this study are conclusive. However, the sample size is small. Therefore, further studies could extend the application of the prediction model developed in this study to all the EU countries.

This study has important practical implications. This study responds to the EU directive call by developing the financial distress prediction model to allow debtors to do timely debt restructuring and thus continue their businesses. Therefore, this study could be useful for practitioners and firm stakeholders, such as banks and other creditors, and investors.

This study significantly contributes to the literature in several ways. First, this study develops a model for predicting financial distress based on the argument that corporate bankruptcy and financial distress are distinct events. However, the original Z”-Score model is intended for failure prediction. Moreover, the recent literature suggests modifying and extending the prediction models. Second, the new model is tested using a sample of firms from three countries that share similarities in their TDR laws.

This study aims to examine whether there are differences between financial statements prepared in accordance with International Financial Reporting Standards (IFRS) and financial statements prepared in accordance with local accounting standards in terms of its ability to present the financial conditions of companies listed on the Saudi Stock Exchange as one of the emerging markets.

Data on study variables were obtained from the published financial statements of 67 of listed companies in the Saudi Stock Exchange during the period 2014–2019. The study addressed the research hypotheses by using Altman Z-score model. Both the T-test and Wilcoxon rank test were used to investigate the significance of differences between the values of Z-score and the individual variables included in the model in the pre- and post-IFRS mandatory adoption periods.

The results revealed a decrease in the values of Z-score as well as the values of the individual variables included in the model in the period following the adoption of IFRS than it was before the adoption of IFRS, which indicates the ability of IFRS to show the financial conditions of companies more transparently than local accounting standards. However, the results of the T-test and Wilcoxon test showed that these decreases were not statistically significant.

This study has some limitations, including the small sample size as a result of the small size of the Saudi Stock Exchange, As well as the reliance of this study only on the Altman model with its five variables in assessing financial conditions without examining the impact of other factors that may affect the financial conditions of companies.

Financial conditions of the companies have important implications for multiple parties such as management, government, investors and others as an early warning sign that enables them to take the necessary measures early before the actual bankruptcy occurs and what results in costs.

Although assessing financial conditions of the companies is one of the basic uses of accounting information, this topic has not received sufficient attention as a means to test the benefits of adopting IFRS, especially in emerging markets such as Saudi Stock Exchange. This is the first study to examine the impact of adopting IFRS on the transparency of financial reporting in assessing financial conditions in Saudi Arabia.

This paper aims to synthesize the diverse literature on nomination and remuneration committees and provide avenues for future research.

This study provides a comprehensive literature review of theoretical and empirical studies published in reputable international journals indexed by Scopus.

The literature review reveals several aspects of the nomination and remuneration committee. These aspects have been classified into the definition of the nomination and remuneration committee, dimensions of the nomination and remuneration committee, measurement and research review results, reasons for conflict empirical findings, company dynamics and research on moderators, as well as recommending future research.

Our literature review shows that nomination and remuneration committees play a role in improving board performance and company performance, reducing agency conflicts and improving corporate governance to provide implications for companies, regulators and investors and pave the way for future research.

This paper identifies issues related to nomination and remuneration committees, their theoretical and practical implications and avenues for future research.

The paper investigates if the process that led to the birth of the Euro Area had a significant impact in homogenizing the capital structure decisions of European firms since the first introduction of the common currency.

A large sample of firms was constructed, and a Tobit-censored regression model was utilized to investigate the determinants of firms' observed capital structures. The Black–Scholes–Merton model was used to infer market values of assets, as well as the volatility of those values, from the observed market values of equity and the corresponding volatility. The existing differences in national tax rules were considered for estimating firm-specific marginal tax rates.

It was found that, despite the currency union and the institutional harmonization process, certain factors still play a different role. In particular, the impact of profitability is consistent with the pecking order view in some countries, and with the trade-off theory in others. Assets risk, measured as the annualized volatility of the market enterprise value, is the best predictor of observed leverage ratios. The sector of activity is significant in determining leverage decisions even when assets' risk is taken into account. Despite the monetary union and the increased financial and institutional integration in the Euro Area, the country of origin still plays a significant role in capital structure decisions, suggesting that other country-level factors may affect firms' financing behaviour.

The paper indicates that, despite the long harmonization process of institutions, regulations and public budget required to join the Euro, firms' financing decisions are still affected by country-specific factors once the common currency is introduced. Therefore, new entrant countries in the Euro area should not expect their companies to immediately conform with those located in other countries within the common currency area.

This article investigated the impact of the currency change from national currencies to the Euro on the determinants of capital structure choices. It was shown that, despite the long harmonization process that led to the birth of the Euro Area, national factors still affect firms' financing decisions. This provides guidance for policymakers in countries that are planning to join the Euro about the impact this will have on firms' financing decisions in the entrant country.

The unique dynamics of family firms (FFs) shape the management of financial crises. Religious and secular reasons, as a defining characteristic of this type of firm, provide a reference system for key management decisions. This paper aims to explore the under-researched topic of differences in FFs' crisis management between religious and secular family decision-makers (FDMs), considering secularization in developed countries.

The paper draws on a qualitative-empirical study of 14 large FFs from the DACH region (Germany, Austria and Switzerland), through both a media analysis and semi-structured interviews with FDMs who have significant influence on key management decisions.

Despite secularization, religion continues to influence managerial decisions such as crisis management in the DACH region. The findings show that crisis management differs across religious and secular FDMs, demonstrating the substantial impact of religious and secular reasons on operational and financial measures. Thus, religious and secular reasons may partially explain the complex and ambivalent crisis management of FFs. This indicates that religion shapes FF's key management decisions in the increasingly secularized DACH region. Religious FDMs are accountable to both the firm and to God, which fosters their own personal and financial resources during crisis management.

This paper contributes to the existing literature by exploring the impact of religion and secularization within developed countries. Further, it offers deeper insights into FF's crisis management and is one of the first studies to assess the impact of religion and secularization on operational and financial measures. This research derives five propositions for further research and discusses a broad range of original implications for theory and practice.

This study reviews and discusses the accounting literature that analyzes the role of auditors and enforcers in the context of fraud.

This literature review includes both qualitative and quantitative studies, based on the idea that the findings from different research paradigms can shed light on the complex interactions between different financial reporting controls. The authors use a mixed-methods research synthesis and select 64 accounting journal articles to analyze the main proxies for fraud, the stages of the fraud process under investigation and the roles played by auditors and enforcers.

The study highlights heterogeneity with respect to the terms and concepts used to capture the fraud phenomenon, a fragmentation in terms of the measures used in quantitative studies and a low level of detail in the fraud analysis. The review also shows a limited number of case studies and a lack of focus on the interaction and interplay between enforcers and auditors.

This study outlines directions for future accounting research on fraud.

The analysis underscores the need for the academic community, policymakers and practitioners to work together to prevent the destructive economic and social consequences of fraud in an increasingly complex and interconnected environment.

This study differs from previous literature reviews that focus on a single monitoring mechanism or deal with fraud in a broadly manner by discussing how the accounting literature addresses the roles and the complex interplay between enforcers and auditors in the context of accounting fraud.

This paper aims to investigate the impact of corporate dividend policy on the capital structure in the Korean stock market. To distinctly discern the voluntariness of changes in corporate dividend policy, we analyze companies that, following a substantial increase, do not reduce dividends for the subsequent two years or, after a significant decrease, do not raise dividends for the following two years. Our empirical findings indicate that companies that increase dividends experience a significant decrease in both book and market leverage, even after controlling for variables such as target leverage ratios. This result suggests that a large increase in dividends can effectively reduce information asymmetry, leading to a lower cost of equity. On the contrary, after a decrease in dividends, both book leverage and market leverage significantly increase, revealing a symmetric relationship between dividend policy and capital structure. In conclusion, large dividend increases in Korean companies not only reduce information asymmetry but also lower the cost of equity capital, resulting in observable changes in the leverage ratio.

This study aims to measure impact of several firm-specific factors on alternative measures of leverage. The authors also aim to study impact of the subprime crisis on such associations.

The authors utilized an unbalanced panel data of 973 firm-year observations on 47 UK listed non-financial firms for the years 1990–2019. Book-based and market-based long-term and total leverage measures have been used as explained variables. The explanatory variables are profitability, size, two measures of growth, asset tangibility, non-debt tax shields, firm age and product uniqueness. Fixed effect and random effect models with clustered robust standard errors have been utilized for data analysis. To find the effect of subprime crisis, original dataset was split to create pre-crisis and post-crisis datasets.

The authors find that profitability significantly reduces leverage while firms having more tangible assets use significantly more debt in capital structure. Firm size and non-debt tax shield have statistically insignificant positive impact on leverage. Having more unique products reduces use of external debt, albeit insignificantly. Growth, when measured as market-to-book ratio, has inconsistent impact, whereas capital expenditure insignificantly reduces leverage. Age is found to be an insignificant predictor of leverage. After the subprime crisis, firms started relying more on internal fund instead of external debt, more particularly short-term debt. Having more collateral is gradually becoming more important for availing external debt.

Data limitations restrict generalization of the findings.

This is one of the pioneering attempts to show how subprime crisis altered the theoretical domain of capital structure research in the UK.

There is still an ongoing debate on the value relevance of capital structure and its determinants. Recently the issue has been explored in family firms after being explored in mature firms. This paper investigates the role of institutional investors and the firm's innovation activity in influencing the firm's decision and ability to acquire debt capital.

A large sample of 700 privately-held family firms in Italy from 2010 to 2019. Two analysis techniques are used: panel analysis and path analysis. The value of debt and the debt ratio are used as leverage measures. The value of patent (as a proxy for innovation) and institutional investor are the explanatory variables.

The results show that institutional investors have no relationship with financial leverage measures except when controlling for an interaction variable (Institutional investors × Lombardy region). The patent value is positively correlated with debt; however, the ratio patent-to-asset is negatively related to financial leverage indicating higher risk exposure. The nonlinearity test demonstrates a turning point when the relationship between patent value and debt inverts.

Firms should monitor their innovation activity since excessive innovation increases risk exposure and affects financing opportunities and value. The involvement of institutional investors does not always enhance value.

Existing literature focuses separately on family firm innovations and financial leverage as outcome variables, emphasizing the role of institutional investors in both fields by adopting agency theory and socioemotional wealth framework. In this study, the authors go further by merging both relationships, investigating the dynamics of the institutional-family firm innovation relationship in influencing the firm's capital structure. The authors contribute to the ongoing debate by providing original findings on capital structure, governance and innovation, supported by rigorous methods to enhance family firms' decision-making.

In 2000, Cañibano et al. published a literature review entitled “Accounting for Intangibles: A Literature Review”. This paper revisits the conclusions drawn in that paper. We also discuss the intervening developments in scholarly research, standard setting and practice over the past 20+ years to outline the future challenges for research into accounting for intangibles.

We conducted a literature review to identify past developments and link the findings to current accounting standard-setting developments to inform our view of the future.

Current intangibles accounting practices are conservative and unlikely to change. Accounting standard setters are more interested in how companies report and disclose the value of intangibles rather than changing how they are determined. Standard setters are also interested in accounting for new forms of digital assets and reporting economic, social, governance and sustainability issues and how these link to financial outcomes. The IFRS has released complementary sustainability accounting standards for disclosing value creation in response to the latter. Therefore, the topic of intangibles stretches beyond merely how intangibles create value but how they are also part of a firm’s overall risk and value creation profile.

There is much room academically, practically, and from a social perspective to influence the future of accounting for intangibles. Accounting standard setters and alternative standards, such as the Global Reporting Initiative (GRI) and European Union non-financial and sustainability reporting directives, are competing complementary initiatives.

Our results reveal a window of opportunity for accounting scholars to research and influence how intangibles and other non-financial and sustainability accounting will progress based on current developments.