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Article
Publication date: 11 October 2021

Mahmoud Elmarzouky, Khaldoon Albitar and Khaled Hussainey

This paper aims to investigate whether Covid-19 related information is associated with a higher level of performance disclosure in the annual reports. Furthermore, it examines the…

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Abstract

Purpose

This paper aims to investigate whether Covid-19 related information is associated with a higher level of performance disclosure in the annual reports. Furthermore, it examines the moderating effect of corporate governance on the relationship between Covid-19 and the performance disclosure by using three governance mechanisms: board size, board independence and gender diversity.

Design/methodology/approach

The authors use quantitative content analysis. The authors applied an automated textual analysis technique to measure the level of Covid-19 information and performance disclosure for the UK Financial Times Stock Exchange all-share non-financial firms.

Findings

The authors found a significant positive relationship between the Covid-19 disclosure and the firm performance disclosure in the annual reports. The authors also find that both board independence and gender diversity moderate the relationship between the Covid-19 related information and the level of performance disclosure in the annual reports. The authors further run a robustness analysis, which confirms the main results.

Practical implications

The finding is beneficial for the regulatory setters to better understand whether firms provide generic or meaningful Covid-19 information linked to the firm’s performance. The unique findings of this paper are relevant to regulators, governments, management, shareholders and academics.

Originality/value

The authors contribute to the literature in a unique and core research area not researched previously. The paper links the Covid-19 disclosure with the firm performance from the corporate narrative perspective. The paper underlines governance factors as a moderating role in this relationship by considering three main mechanisms: board size, board independence and gender diversity.

Details

International Journal of Accounting & Information Management, vol. 29 no. 5
Type: Research Article
ISSN: 1834-7649

Keywords

Article
Publication date: 18 March 2022

Khaldoon Albitar, Mahmoud Elmarzouky and Khaled Hussainey

This paper aims to examine the impact of ownership concentration on Covid-19 disclosure in the narrative sections of corporate annual reports. It also explores the mediating role…

Abstract

Purpose

This paper aims to examine the impact of ownership concentration on Covid-19 disclosure in the narrative sections of corporate annual reports. It also explores the mediating role of corporate leverage on the ownership concentration–Covid-19 disclosure relationship.

Design/methodology/approach

This paper uses automated textual analysis to measure Covid-19 disclosure in annual reports. It also applies different regression models to test the research hypotheses and to address the endogeneity problem. It uses univariate and multivariate analyses through correlations and ordinary least squares.

Findings

The analysis shows that ownership concentration has a negative impact on Covid-19 disclosure. It also shows that corporate leverage negatively affects Covid-19 disclosure, and it has a partial mediating effect on the ownership concentration–Covid-19 disclosure relationship.

Practical implications

The results offer important practical implications for the government, management, shareholders and policymakers. For example, corporate managers are encouraged to consider small shareholders’ interests and provide a sufficient level of Covid-19 disclosure to avoid violating their rights. Also, the government may consider forming a mechanism for balancing the ownership structure to protect small investors and weaken large shareholders’ tunnelling behaviours.

Originality/value

This paper offers two important contributions to governance and disclosure literature. First, it provides new empirical evidence on the relationship between ownership concentration and Covid-19 disclosure. Second, it provides new evidence on the mediating role of the leverage ratio on the ownership concentration–Covid-19 disclosure relationship.

Details

International Journal of Accounting & Information Management, vol. 30 no. 3
Type: Research Article
ISSN: 1834-7649

Keywords

Article
Publication date: 28 November 2023

Neef Alwadani, Habiba Al-Shaer and Khaldoon Albitar

This study aims to explore whether firms that have a sustainability committee operating on the board, publish separate sustainability reports that are externally assured by an…

Abstract

Purpose

This study aims to explore whether firms that have a sustainability committee operating on the board, publish separate sustainability reports that are externally assured by an independent external audit and have large and active boards are more likely to be engaged in environmental practices and have better environmental performance.

Design/methodology/approach

Based on a sample of firms listed on the Saudi Stock Exchange, covering the period 2014–2021, this study applies panel data models to examine the research hypotheses.

Findings

The findings show significant positive associations between the existence of a sustainability committee, the publication of separate sustainability reports and the independent external assurance of these reports and environmental performance. This study also finds that the composite internal governance index is significant and positively associated with environmental performance.

Practical implications

Policymakers should support the creation of a sustainability committee on the boards of Saudi firms and review its role and responsibilities. The findings of this study inform regulators of the importance of the existence of independent external assurance of the sustainability reports of Saudi firms to enhance the credibility and reliability of these reports. Managers need to establish devoted committees committed to sustainability-related tasks that help coordinate communications between the firm and stakeholders.

Originality/value

The Saudi Arabian Government has implemented a range of policies and initiatives aimed at improving environmental performance, which is a main focus of Saudi Vision 2030 to achieve environmental sustainability. Therefore, this study provides unique evidence and new insights on the impact of internal governance on corporate environmental performance in the Saudi context.

Details

International Journal of Accounting & Information Management, vol. 32 no. 1
Type: Research Article
ISSN: 1834-7649

Keywords

Article
Publication date: 10 May 2022

Khaled Hussainey, Khaldoon Albitar and Fadi Alkaraan

This paper aims to provide early evidence on corporate transformation towards Industry 4.0 (CTTI4) in the UK, particularly by examining the effect of corporate governance on the…

Abstract

Purpose

This paper aims to provide early evidence on corporate transformation towards Industry 4.0 (CTTI4) in the UK, particularly by examining the effect of corporate governance on the narrative reporting of CTTI4.

Design/methodology/approach

The authors analyse all UK financial times stock exchange all-share non-financial firms that have published their annual reports for the period of 2013–2018. The authors use computerised textual analysis to measure the level of corporate reporting on Industry 4.0 (I4.0) for 1,001 firm-year observations. The authors used different regression models to test the research hypotheses.

Findings

The findings contribute to the growing literature on business model transformation in UK companies towards the I4.0 strategy. The findings show that the level of reporting on CTTI4 is improving over the sample period and varies between industries. The authors also find that better governance quality enhances the level of reporting on CTTI4.

Practical implications

The findings of this study inform decision makers and regulators about factors driving UK companies to report information about their actionable strategies to direct I4.0 endeavours.

Originality/value

The paper makes an important and novel contribution to corporate disclosure literature. So far as the authors know, it is the only paper to examine the impact of corporate governance on corporate narrative reporting on I4.0 technologies. Moreover, to the best of the authors’ knowledge, it is the first paper to show that the quality of corporate governance adds value to this strategic type of corporate disclosure.

Details

International Journal of Accounting & Information Management, vol. 30 no. 4
Type: Research Article
ISSN: 1834-7649

Keywords

Article
Publication date: 19 May 2021

Khaldoon Albitar, Habiba Al-Shaer and Mahmoud Elmarzouky

The COVID-19 pandemic has been adding pressures on companies to commit to their social and ethical responsibilities. Corporate social responsibility (CSR) reporting is the main…

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Abstract

Purpose

The COVID-19 pandemic has been adding pressures on companies to commit to their social and ethical responsibilities. Corporate social responsibility (CSR) reporting is the main tool through which companies communicate their social behaviour and the need for credible information is censorious during the crisis. This paper aims to measure the level of COVID-19 disclosures in CSR reports by using an automated textual analysis technique based on a sample of UK companies and investigate whether the level of disclosure is enhanced for companies that subject their CSR reports to an assurance process.

Design/methodology/approach

The study sample consists of FTSE All-share non-financial listed companies. The authors use a computer-aided textual analysis, and we use a bag of words to capture COVID-related information in the CSR section of the firm’s annual reports.

Findings

The results suggest that the existence of independent external assurance is significantly and positively associated with the provision of COVID-19 information in CSR reports. The authors also find that when assurance is provided by Big 4 accountancy firms, the disclosure of COVID-related information is enhanced. Furthermore, large companies are more likely to disclose COVID-related information in their CSR reports that are externally assured from top-tier accountancy firms, suggesting that assurance could be a burden for smaller firms. Overall, the findings suggest that assurance on CSR reports provides an “insurance-like” protection that mitigates the risks and signals the management’s ethical behaviour during the pandemic.

Practical implications

The study approach helps to assess the level of corporate engagement with COVID-19 practices and the extent of related disclosures in CSR reports based on the COVID-19 Secure Guidelines published by the UK government. This helps to emphasise how companies engage and communicate COVID-19-related information to stakeholders through CSR reports and ensure a safe working environment during this pandemic. Managers will need to assess the costs and benefits of purchasing assurance on CSR disclosures, giving the ethical signal that assurance sends to the market and protection that it covers during the crisis.

Originality/value

This paper provides a shred of unique evidence of the impact of the existence of external assurance and the type of assurer on the disclosure of COVID-related information in CSR reports. To the best of authors’ knowledge, no study has yet investigated the corporate disclosure on an unforeseen event in CSR reports and the role of CSR assurance in this respect.

Details

International Journal of Accounting & Information Management, vol. 29 no. 3
Type: Research Article
ISSN: 1834-7649

Keywords

Article
Publication date: 17 January 2023

Engy ELsayed Abdelhak, Khaled Hussainey and Khaldoon Albitar

This study aims to examine the impact of internal corporate governance and audit quality on the level of COVID-19 disclosure in Egypt.

Abstract

Purpose

This study aims to examine the impact of internal corporate governance and audit quality on the level of COVID-19 disclosure in Egypt.

Design/methodology/approach

The authors use manual content analysis to measure levels of COVID-19 disclosure in the narrative sections of annual reports. The authors analyze all companies listed on the Egyptian Stock Exchange over 2020–2021. The authors use different regression models to test the research hypotheses.

Findings

The analysis adds to the literature in two crucial respects. First, it provides a measure for COVID-19 disclosure in Egypt. Second, it provides evidence that governance mechanisms (board diversity, audit committee [AC] independence), auditor type and audit opinion affect the level of COVID-19 disclosure. The higher level of COVID-19 disclosure is associated with firms with more female directors on the board, being audited by one of the big four audit firms and receiving standard clean audit opinion. While the inexistence of an AC and more executives on the AC negatively affect COVID-19 disclosure levels.

Originality/value

To the best of the authors’ knowledge, it is the only paper that examines COVID-19 disclosure in the Egyptian context. It is also the first paper that provides evidence on the impact of internal governance and audit quality on COVID-19 disclosure.

Details

International Journal of Accounting & Information Management, vol. 31 no. 1
Type: Research Article
ISSN: 1834-7649

Keywords

Article
Publication date: 3 May 2022

Husam Ananzeh, Hamzeh Al Amosh and Khaldoon Albitar

This paper aims to investigate whether and how better corporate governance practices can lead to philanthropic behavior among companies in the UK. In particular, this study…

Abstract

Purpose

This paper aims to investigate whether and how better corporate governance practices can lead to philanthropic behavior among companies in the UK. In particular, this study attempts to determine whether corporate governance quality in general, as well as its specific mechanisms, affects corporate giving.

Design/methodology/approach

The analysis is based on a sample of Financial Times Stock Exchange All-Share nonfinancial companies. Data on firm donations, including donations amount and donations intensity, were manually collected from companies’ annual reports for the period 2018–2020. This paper uses panel data models to examine the research hypotheses.

Findings

The results of this study indicate that both donations amount and donations intensity are positively associated with the practice of better corporate governance. Board independence is positively associated with donations amount, but not with the intensity of donations. Furthermore, board size, board gender diversity and the establishment of a corporate social responsibility (CSR) committee are likely to have a positive impact on the amount and the intensity of firms’ donations. However, neither the chief executive officer board membership nor the audit committee’s independence is related to the firm’s donations.

Practical implications

This study sheds light on specific governance factors that affect firm donations in the context of UK companies. This allows regulators and legislators to evaluate the donations activities in the country and issue more directives to reinforce corporate governance practices that support corporate donations. In addition, the findings of this study are considered crucial to investors who prefer investing in companies with significant CSR-related activities to improve the value relevance of their investments.

Originality/value

This study provides a shred of unique evidence on the impact of corporate governance practices on firms’ donations.

Details

International Journal of Accounting & Information Management, vol. 30 no. 4
Type: Research Article
ISSN: 1834-7649

Keywords

Article
Publication date: 10 October 2022

Ali Meftah Gerged, Shaojie Yao and Khaldoon Albitar

This study aims to investigate the possible implications of compliance with corporate governance (CG) provisions, including board composition and ownership structures, on the…

Abstract

Purpose

This study aims to investigate the possible implications of compliance with corporate governance (CG) provisions, including board composition and ownership structures, on the firm’s likelihood of falling into financial distress.

Design/methodology/approach

The study applies a random-effects logistic regression model as a baseline analysis using a sample of 110 FTSE 350 manufacturing companies from 2014 to 2019. This technique is supported by conducting a two-stage Heckman regression model to overcome the potential existence of endogeneity problems.

Findings

The empirical evidence suggests that board composition and ownership structure are heterogeneously associated with financial distress probabilities in that they might have either reduced or increased the financial distress of the sampled firms. Specifically, board independence, board gender diversity, audit committee independence and institutional ownership negatively influence the likelihood of financial distress. In contrast, and consistent with the expectations, ownership concentration is positively attributed to financial distress, while the board size, audit committee size and managerial ownership have insignificant impacts on financial distress.

Originality/value

The study extends the existing body of knowledge by examining the collective effect of board characteristics and ownership structures on firms’ financial distress likelihood among a sample of manufacturing firms within the FTSE 350 index post the 2008 global financial crisis and following the recent CG reforms in the UK during the study period from 2014 to 2019.

Details

Corporate Governance: The International Journal of Business in Society, vol. 23 no. 3
Type: Research Article
ISSN: 1472-0701

Keywords

Article
Publication date: 27 March 2020

Khaldoon Albitar, Khaled Hussainey, Nasir Kolade and Ali Meftah Gerged

This paper aims to investigate the effect of environmental, social and governance disclosure (ESGD) on firm performance (FP) before and after the introduction of integrated…

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Abstract

Purpose

This paper aims to investigate the effect of environmental, social and governance disclosure (ESGD) on firm performance (FP) before and after the introduction of integrated reporting (IR) further to exploring a potential moderation effect of corporate governance mechanisms on this relationship.

Design/methodology/approach

Ordinary least squares and firm-fixed effects models were estimated based on data related to FTSE 350 between 2009 and 2018. The data has been mainly collected from Bloomberg and Capital IQ. This analysis was supplemented with applying a two-stage least squares (2 SLS) model to address any concerns regarding the expected occurrence of endogeneity problems.

Findings

The results show a positive and significant relationship between ESGD score and FP before and after 2013, among a sample of FTSE 350. Furthermore, the study is suggestive of a moderation effect of corporate governance mechanisms (i.e. ownership concentration, gender diversity and board size) on the ESGD-FP nexus. Additionally, this paper finds that firms voluntarily associated with IR have a tendency to achieve better firm financial performance.

Practical implications

The findings of the present study have several policy and practitioner implications. For example, managers may engage in ESGD to enhance their firms’ financial performance by the voluntary involvement in IR, which believed to help investors to rationalise their investment decisions. Likewise, the results reiterate the crucial need to integrate more social, environmental and economic regulations to promote sustainability in the UK. The paper also offers a systematic picture for policymakers in the UK as well as future researchers.

Social implications

The findings of this paper indicate that IR plays a significant role in the relationship between ESGD and FP, where IR firms seemed to be achieving better FP as compared with their non-IR counterparts. This implies that stakeholders may have played a magnificent effort to encourage firms’ voluntary engagement in IR in the UK.

Originality/value

To the best of the authors’ knowledge, this is the first study to explore the potential moderating effect of ownership concentration, gender diversity and board size on the relationship between ESGD and FP and to examine whether firms’ voluntary involvement in IR can lead to better FP after the introduction of IR in 2013 in the UK.

Details

International Journal of Accounting & Information Management, vol. 28 no. 3
Type: Research Article
ISSN: 1834-7649

Keywords

Article
Publication date: 23 September 2020

Khaldoon Albitar, Ali Meftah Gerged, Hassan Kikhia and Khaled Hussainey

This paper aims to discuss the theoretical impact of COVID-19 social distancing outbreak on audit quality.

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Abstract

Purpose

This paper aims to discuss the theoretical impact of COVID-19 social distancing outbreak on audit quality.

Design/methodology/approach

This paper uses a desk study method to explore the possible impact of COVID-19 crisis on five key considerations for audit quality during the pandemic. These include audit fees, going concern assessment, auditor human capital, audit procedures and audit personnel salaries.

Findings

As many believe that the COVID-19 outbreak is as yet not a financial crisis, the authors, on the contrary, believe that the effects of the COVID-19 pandemic would be the toughest challenge for auditors and their clients since the 2007–2008 global financial crisis. Specifically, the authors believe that the COVID-19 social distancing can largely affect audit fees, going concern assessment, audit human capital, audit procedures, audit personnel salaries and audit effort, which ultimately can pose a severe impact on audit quality.

Practical implications

Due to the implementations of work-from-home strategy, audit firms are highly recommended to invest more in digital programs, including artificial intelligence, blockchain, network security and data function development. This can help them to be more adaptable to working from home experience, which is ultimately expected to enhance the effectiveness and the flexibility of communication between auditors and their clients. Also, the authors recommend stock markets and other governmental bodies to provide temporary relaxations in compliance requirements to corporations. This procedure is expected to help firms that apply work-from-home strategy to report better earnings figures, which is appeared to be positively associated with audit quality.

Originality/value

To date, to the best of the authors’ knowledge, there is no academic study that explores the potential impact of the COVID-19 outbreak on audit quality. This paper, therefore, fills an important research gap in the auditing literature. In addition, this paper can be used as a base to construct a research instrument (e.g. questionnaire or interviews) to provide empirical evidence on the potential impact of COVID-19 on audit quality.

Details

International Journal of Accounting & Information Management, vol. 29 no. 1
Type: Research Article
ISSN: 1834-7649

Keywords

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