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This study aims to investigate the motivations behind the issuance of financial instruments with characteristics of equity (FICE), economic consequences associated with their issuance and accounting classifications based on a value-relevance approach.

Using a sample of 169 financial and nonfinancial firms from 10 jurisdictions that adopted International Financial Reporting Standards, the authors use a difference-in-differences econometric approach.

The findings reveal that FICE issuers are more leveraged companies with higher costs of equity and, in some cases, lower effective tax rates. This evidence corroborates the hypothesis that issuers of FICEs seek to increase their book values of equity (accounting treatment as equity) and, simultaneously, generate deductible expenses for tax purposes (tax treatment as liability).

This finding suggests that market participants do not treat these instruments as regular equity but rather as quasi-equity. The findings suggest that a binary classification of FICE as debt or equity may not be the accounting treatment that best represents the underlying economic substance of these contracts. Furthermore, this study reinforces the IASB indication regarding to increase the FICE disclosure to allow stakeholders to better understand the economic essence of these bonds.

This study assesses the economic outcomes and market evaluation of a specific type of FICE that has not been previously studied, which is similar to the examples provided by the IASB in their materials on the subject.

The purpose of this paper is to study the effects of sports sponsorship on brand equity using two managerially related outcomes: price premium and market share.

This study uses a best–worst discrete choice experiment (BWDCE) and compares the outcome with that of the purchase intention scale, an established probabilistic measure of purchase intention. The total sample consists of 409 fans of three soccer teams sponsored by three different competing brands: Nike, Adidas and Puma.

With sports sponsorship, fans were willing to pay more for the sponsor’s product, with the sponsoring brand obtaining the highest market share. Prominent brands generally performed better than less prominent brands. The best–worst scaling method was also 35% more accurate in predicting brand choice than a purchase intention scale.

Future research could use the same method to study other types of sponsors, such as title sponsors or other product categories.

Sponsorship managers can use this methodology to assess the return on investment in sponsorship engagement.

Prior sponsorship studies on brand equity tend to ignore market share or fans’ willingness to pay a price premium for a sponsor’s goods and services. However, these two measures are crucial in assessing the effectiveness of sponsorship. This study demonstrates how to conduct such an assessment using the BWDCE method. It provides a clearer picture of sponsorship in terms of its economic value, which is more managerially useful.

This paper aims to contribute to the management control systems (MCS) changes in public-private partnerships (PPSs) by developing a conceptual archetype explaining the relationship between trust and MCSs in PPPs, and highlighting how this relationship may evolve over time.

The paper adopts a longitudinal case study methodology focusing on a hospital built and operated under a project finance deal. The methods adopted include semistructured interviews, direct observation and internal documentation analysis. We conducted 15 semistructured interviews from 2019 to 2021. In analyzing different documents and interviews, we triangulated data to ensure solid interpretation.

The case shows how trust can take different configurations depending on the type of MCS used. The results highlight how different patterns of MCSs, about trust, can be combined to govern PPPs. The case also shows the temporal dynamics of how MCS and trust evolve at different organizational levels and how bureaucratic control matched with contractual trust and trust-based control matched with competence trust can coexist at different times and organizational levels.

Managers involved in PPPs will be aware of the role of different types of trust in shaping and managing the relationship between partners at different organizational levels. Furthermore, the findings could help policymakers to adopt more informed decisions and to promote practice-based trust at various organizational levels of PPPs.

The paper proposes a management control archetype based on bureaucracy- and trust-based patterns concerning the level of programmability of tasks, as well as defined risks.

This paper aims to explore the biodiversity and threatened species extinction reporting of 54 biodiversity-indexed companies on the Indonesia Stock Exchange (IDX). The primary objectives are to explore the rhetoric of biodiversity disclosure as a practice of virtue ethics and to identify instances of emancipatory extinction accounts on the International Union for Conservation of Nature (IUCN) Red List.

The research sample comprised 54 biodiversity-indexed companies on the IDX. A content analysis of the narrative text of their annual and sustainability reports for 2020 was conducted to discern the rhetoric of biodiversity disclosure as an ethical practice using Aristotle’s rhetoric (ethos, logos and pathos). The identification of extinction accounts listed on the IUCN Red List was conducted based on criteria established in the conceptual framework of Atkins and Maroun (2018).

All 54 companies used ethos, logos and pathos in their biodiversity disclosure as a virtuous practice. These disclosures improve the tone of corporate communications and enhance accountability and transparency. Low-profile companies showed a greater propensity for reporting biodiversity disclosures compared to high-profile companies. Additionally, the authors identified 14 companies informing extinction accounts that qualify as emancipatory accounts, with high-profile companies disclosing extinction more frequently than low-profile ones. Emancipatory accounting highlighted species such as turtles, orangutans, elephants, rhinos, turtles and medicinal plants. These accounts are intended as a form of accountability to the species.

The limitation of this research is the observation of annual reports in one period. Future studies can add more observation periods to see the consistency of companies in disclosing biodiversity and extinction.

Companies can adopt the rhetorical strategy of ethos, logos and pathos in disclosing their biodiversity. For policymakers, it is important to establish regulations to encourage companies to disclose biodiversity. The implications for accountants, to contribute more to biodiversity and extinction reporting, considering that previously sustainability accounting reporting was mostly carried out by nonaccountants.

Regarding social implications, emancipatory accounts aimed at preventing the extinction of animals such as birds, orangutans and rhinos will have significant social and natural impacts.

This research represents the first use of Aristotelian rhetoric and virtue to understand biodiversity disclosure as virtue rhetoric and extinction disclosure as emancipatory accounting. This rhetoric is a benevolent persuasion tool that can shape the audience’s thinking and behavior in a more ethical manner concerning biodiversity issues. It provides evidence of the role of accounting as a social and moral practice, which is particularly relevant in the face of a complex reality and increasing concerns, notably regarding the threat of biodiversity loss and extinction.

Since the withdrawal of IFRIC 3 in 2005, there has been a regulatory freeze in accounting for emission rights that contrasts with the international momentum of climate-related financial disclosures. This paper explores how different narratives and institutional dynamics explain the failure to produce guidance on accounting for emission rights.

This paper mobilises the notion of field-configuring events to examine a sequence of six events between 2003 and 2016, including four public consultations and two dialogues between standard setters. The paper presents a qualitative analysis of documents produced in this space that investigates how different practices and narratives configured the field's positions, agenda, and meaning systems.

Accounting for emission rights was gradually decoupled from climate change and carbon markets, relegated to the research pipeline, and forgotten. The obstacles that the IASB and EFRAG found in presenting themselves as central in the recurring events, the excess of representations, and the increasingly technical and abstract debates eroded the 2003 momentum for regulation, making the different initiatives to revitalise the project vulnerable and open to scrutiny. Lukes (2021) refers to nondecision-making to express that some issues are suffocated before they are expressed.

The regulation of accounting for emission rights, an area that has received scant attention in the literature, provides some insights into the different narrative mechanisms that, materialising in specific times and spaces, draw regulatory attention to particular accounting issues, which are problematised and, eventually, forgotten. This study also illustrates that identifying interests is problematic as actors shift from alternative positions over a long period. The case examined also raises some doubts about the previous effectiveness of international standard setters in dealing with matters of connectivity between the environment and finance, as is the case for accounting for emissions rights.

The interplay between individual and collective creativity and its translation into innovation is a critical yet complex challenge in the ever-evolving innovation landscape. This study delves into the intricate relationship between managerial ability, intellectual property rights (IPRs) and research and development (R&D) investments contextualized within the dynamics of leverage, firm life stages and tangibility for pharmaceutical firms in the Asia-Pacific region. By exploring how micro-level factors influence macro-level innovation processes, this study aims to contribute to the broader understanding of creativity and innovation, a theme at the heart of addressing contemporary global challenges.

Econometric methodologies were used to analyse a data set comprising 2,660 firm-year observations spanning the decade from 2011 to 2020.

A key finding was that companies with lower managerial prowess strategically leverage R&D intensity to signal their value to the market and accrue reputational currency. The research unearths a significant positive relationship between managerial ability, IPRs and R&D investment. In environments characterized by strong managerial acumen and robust IPR safeguards, firms exhibit a heightened propensity to allocate resources to R&D endeavours. This underscores the role of intellectual leadership and legal protections in shaping R&D strategies within the pharmaceutical domain. Incorporating firm life stages as a moderating factor reveals that firm maturity fundamentally influences the interplay between managerial ability, IPRs and R&D expenditure.

These findings’ implications resonate profoundly within policy-making circles and pharmaceutical firms’ day-to-day operational strategies, underscoring the pivotal role of intellectual capital and legal safeguards in shaping the future of innovation in the Asia-Pacific pharmaceutical sector.

Prior studies have found that managers adjust operational activities to tackle climate risk. However, the effects of climate risk on accounting practices are largely ignored in the literature. This paper investigates whether and how climate risk influences managers’ decision-making on the level of accounting conservatism and explains the results based on two competing channels: valuation demand and contracting demand.

Using firm level climate risk measures, we build a modified Basu (1997) model to conduct our econometric tests. In the baseline model, we use earnings before extraordinary items as the dependent variable, referred to as the earnings model. We control for different levels of fixed effect to identify the shocks of climate risk and mitigate potential concerns on endogeneity and bias in the model. A series of robustness tests provide supporting evidence for our baseline results and our explanation.

Using a sample of 35,832 firm-year observations on listed US firms over the period 2002 to 2019, we find that the perception of climate risk drives managers to choose the less conservative accounting policies. We conclude that the results are consistent with the valuation demand explanation but inconsistent with the contracting demand explanation.

The study provides additional evidence on how managers respond to climate risk by adjusting their corporate polices, specifically accounting policies. Our findings contradict the results of prior studies. We explain our results from a unique perspective. Overall, the study provides valuable insights for academics, investors, managers and policymakers.

This study explores the integration of corporate reporting by Mitsubishi, a large Japanese company, using a culturally sensitive narrative that combines and reconciles Japanese and Western corporate values in one story.

We use an analytical framework drawing on insights borrowed from narratology and the notion of wrapping – the traditional art of packaging as communication.

We find that Mitsubishi is a survivor company that uses different corporate reporting frameworks during its reporting journey to construct a bespoke narrative of its value creation and cultural values. It emplots narratives to convey a story presenting the impression that Mitsubishi is a Japanese corporation but is compatible with Western neo-liberal ideology, making bad news palatable to its stakeholders and instilling confidence in the future.

Wrapping is a culturally sensitive form of impression management used in the integration of corporate reporting. Therefore, rather than assuming that companies blatantly manipulate their image in corporate reports, we suggest that future research should focus on how narratives are constructed and made sense of, situating them in the context of local culture and traditions.

The findings should interest scholars, report preparers, policymakers, and the IFRS, considering the recent release of the IFRS Sustainability Disclosure Standards designed to reduce the so-called alphabet soup of corporate reporting. By following Mitsubishi’s journey, we learn how and why the notion of integrated reporting was adopted and integrated with other reporting frameworks to create narratives that together convey a story of a global corporation compliant with Western neoliberal ideology. It highlights how Mitsubishi used integrated reporting to tell its story rather than as a rigid reporting framework, and the same fate may apply to the new IFRS Sustainability Reporting Standards that now include integrated reporting.

The study offers a new perspective on corporate reporting, showing how the local societal discourses of cultural heritage and modernity can shape the journey of the integration of corporate reporting over time.

The purpose of this study is to examine the impact of key audit matters (KAMs) on the timeliness of financial statement reporting, measured as audit report lag (ARL), within the context of Kuwait's evolving financial market.

Using a sample of 136 unique firms and 841 firm-year observations over the period 2016–2022, the study employs a random effects model on a panel data set to examine the correlation between the number and type of KAMs disclosed in audit reports and the length of ARL. In addition, we employ sub-sample analysis and two-stage least squares (2SLS) regression to enhance overall reliability.

The results indicate a positive relationship between an increased number of reported KAMs and the length of ARL. Specific categories of KAMs, such as those related to investments and the implementation of new standards, also significantly impact the delay. Additionally, the findings reaffirm the importance of several determinants of ARL, which is consistent with prior research.

This study is among the first to offer new insights by examining the relationship between both the number and specific types and/or categories of KAMs on ARL in emerging markets.