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Article
Publication date: 3 August 2021

Nemiraja Jadiyappa, L. Emily Hickman, Ram Kumar Kakani and Qambar Abidi

The Indian Companies Act 2013 mandated auditor rotations in the financial year 2018–2019. Similar regulations are being considered in many countries, based on the…

Abstract

Purpose

The Indian Companies Act 2013 mandated auditor rotations in the financial year 2018–2019. Similar regulations are being considered in many countries, based on the assumption that longer tenure is detrimental to audit quality; yet, the evidence from investigations of this assumption is inconclusive. This paper aims to examine the effect of moderating factors on the relation between audit quality and audit tenure, given the regulatory trend and the lack of consensus in extant literature.

Design/methodology/approach

This paper examines the relationship between audit quality and audit tenure among Indian firms from 2001 to 2015 and tests for moderating factors including auditor compensation, business group affiliation and chief executive officer (CEO) duality.

Findings

Contrary to the objective of mandatory rotations, this study finds that longer auditor tenure generally enhanced audit quality among Indian firms prior to mandatory rotations. However, for companies paying abnormally high compensation to auditors, this paper finds that longer tenure decreases audit quality, particularly if the firm is affiliated with a business group or firms where the CEO also serves as the board chair. Thus, the potential benefits of mandated shorter tenure appear to be confined to high-fee paying companies with a business group affiliation and/or a dual-role CEO.

Originality/value

This study is one of the first to examine conditioning factors that affect the relationship between audit quality and auditor tenure. Results suggest that regulations limiting auditor tenure would be beneficial only to the shareholders of a narrow group of firms; while for the majority of firms, limiting auditor tenure may actually be counter-productive.

Details

Managerial Auditing Journal, vol. 36 no. 5
Type: Research Article
ISSN: 0268-6902

Keywords

Article
Publication date: 15 October 2019

Nemiraja Jadiyappa, Bhanu Sireesha, L. Emily Hickman and Pavana Jyothi

Prior literature demonstrates that the effectiveness of bank monitoring decreases when multiple banks are involved, due to a free rider problem, leading to lower firm…

Abstract

Purpose

Prior literature demonstrates that the effectiveness of bank monitoring decreases when multiple banks are involved, due to a free rider problem, leading to lower firm value. The purpose of this paper is to investigate whether this free rider problem exists in an emerging market context, and whether the relationship between multiple banking relationships and firm value is conditioned on bankers’ incentives to monitor.

Design/methodology/approach

The authors use multivariate panel regression to examine the hypotheses. The conditioning effect of the incentive to govern (the amount of average bank lending) is modeled using an interaction variable. Based on the result of the Hausman test, the authors employ two-way fixed effects estimator to estimate the coefficients.

Findings

First, the negative relationship between multiple banking relationships and firm value holds true among Indian firms. Second, the authors show that this negative relationship is lessened for firms with high average bank debt or higher free cash flows. The analyses suggest that these moderating effects are related to a reduction in the free rider problem rather than a decrease in financial constraints. However, these results are only significant among larger firms.

Originality/value

Prior literature has not considered the conditioning impact of the “incentives to govern” when examining the free rider problem, inherent in situations where multiple actors are involved. The authors show in this study that the free rider problem disappears when the incentives to govern are considered in the overall research framework.

Details

Managerial Finance, vol. 46 no. 1
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 2 December 2019

L. Emily Hickman

This paper aims to investigate the motivations behind the publication of corporate social responsibility (CSR) reports, and particularly the effect of information…

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Abstract

Purpose

This paper aims to investigate the motivations behind the publication of corporate social responsibility (CSR) reports, and particularly the effect of information asymmetry between firms and their owners.

Design/methodology/approach

A natural experiment contrasting the CSR reporting of private vs public firms is used to test whether the degree of information asymmetry is a significant factor in the decision to publish CSR reports. Using a hand-collected sample of the 239 largest US private companies matched with publicly-traded firms, the effect of these inherently different information environments on CSR reporting is tested through logistic regression. Factors suggested by stakeholder and legitimacy theories are tested for their differential impact on private vs public firms’ decisions to publish a CSR report.

Findings

Results indicate that private firms are less likely to publish a CSR report than similar public firms. Public firms also follow Global Reporting Initiative guidelines more frequently, consistent with signaling report quality to dispersed investors. A subsample of private companies facing greater information asymmetry is found to be similar to public firms in their reporting behavior, reinforcing the link between information asymmetry and CSR disclosure. Further analysis suggests that non-owner stakeholders play an important role in private companies’ CSR reporting decisions.

Practical implications

In addition to accounting and governance scholars, the findings should interest private firm managers preparing for an initial public offering (IPO), as the evidence suggests that CSR reporting is used to communicate information to dispersed investors. The insight into reporting motivations should be useful to accountants engaged in CSR consultation and assurance.

Social implications

With the growing attention paid to the CSR performance of firms, demonstrated by the growth in socially responsible investing, the study provides evidence that effective communication of CSR information to investors may play a key role in CSR-engaged firms’ disclosure strategies.

Originality/value

To the best of the author’s knowledge, this study is the first to analyze the CSR reporting decisions of a large sample of publicly-traded and privately-held firms. The results add to our understanding of what motivates firms to publish CSR reports, highlighting the importance of information asymmetry between the firm and its owners.

Details

Sustainability Accounting, Management and Policy Journal, vol. 11 no. 1
Type: Research Article
ISSN: 2040-8021

Keywords

Article
Publication date: 15 April 2022

Nemiraja Jadiyappa, Emily Hickman and Namrata Saikia

Energy efficiency is critical for global sustainability (International Energy Agency, 2019). The purpose of this paper is to examine how agency conflicts arising from…

Abstract

Purpose

Energy efficiency is critical for global sustainability (International Energy Agency, 2019). The purpose of this paper is to examine how agency conflicts arising from pyramidal ownership structures impact the energy intensity (EI) of group-affiliated Indian firms. Group-affiliated firms face unique governance challenges. For instance, parent owners (promoters) may transfer profits from one group-affiliated firm to another firm in which they have greater ownership. The authors hypothesize that such governance issues will lead to underinvestment in energy-saving projects among group firms in which promoters have a low ownership stake, resulting in their greater EI.

Design/methodology/approach

The authors measure EI as the ratio of total energy expense to total sales revenue (EI) and as the industry-adjusted version of this ratio. Group-affiliated Indian firms are divided into high- and low-stake firms based on the sample’s median promoter ownership.

Findings

Results support the authors’ prediction: group firms in which promoters have low ownership are more energy intensive, consistent with these firms being exposed to greater governance challenges and agency conflicts that result in operating inefficiencies and/or underinvestment in energy-saving projects.

Practical implications

Given energy efficiency will be key in addressing climate change, this study could raise awareness among activists, motivate regulators to consider agency problems among group-affiliated firms in emerging markets and may underscore the importance of environmental-related corporate disclosures.

Originality/value

To the best of the authors’ knowledge, this study is the first to identify the significant impact that firm ownership structure and associated governance challenges have on corporate EI.

Article
Publication date: 21 August 2019

Leila Emily Hickman and Jane Cote

Drawing on new insights from the experiences and perspectives of a prominent reporting client and its assurance team, the purpose of this paper is to explore the question…

Abstract

Purpose

Drawing on new insights from the experiences and perspectives of a prominent reporting client and its assurance team, the purpose of this paper is to explore the question: what are challenges to the legitimacy of corporate social responsibility (CSR) reporting and assurance?

Design/methodology/approach

Using a qualitative research approach, in-depth, semi-structured interviews are conducted with a Fortune 200 firm’s Vice President responsible for CSR oversight (including CSR reporting), and with the report’s assurance team from a Top 20 accounting firm. Questions are informed by existing literature, and analysis focuses on new insights that conform to, or contrast with, prior studies in areas that may challenge the legitimacy of CSR reporting.

Findings

The study documents that reporting and assurance may often serve the respective commercial and professional interests of the firm and the assuror, rather than providing accountability to the public interest. Specifically, the authors find that legitimacy-challenging instances of managerial capture of CSR reporting may co-exist in a firm with management-as-CSR-champion, in contrast with existing literature. Prior research has assumed these two constructs are not likely to co-exist within a single organization. The interviews suggest that managerial influence is fostered by the lack of reporting standards and the absence of agreement regarding the over-arching purpose of CSR reports and their assurance.

Research limitations/implications

Going forward, researchers should consider the multifaceted role management can play in CSR reporting and assurance, rather than treating managerial capture and management-as-champion as mutually exclusive. Future research could also examine how standards may balance desired comparability with flexibility in CSR reporting.

Practical implications

The study will interest report users who may assume that a seemingly supportive management would not play a restrictive role in the reporting and assurance processes. Reporters and assurors will benefit from reading the perspectives provided by professionals engaged in similar work, including the challenges they face, such as the consequences resulting from the lack of standards for CSR reporting and assurance.

Originality/value

The study is the first to provide a behind-the-scenes view of the report–assuror dyad by interviewing both the reporting firm and the assurance team engaged on the same CSR report.

Details

Journal of Applied Accounting Research, vol. 20 no. 4
Type: Research Article
ISSN: 0967-5426

Keywords

Article
Publication date: 4 March 2019

Nemiraja Jadiyappa, Pavana Jyothi, Bhanu Sireesha and Leila Emily Hickman

The purpose of this paper is to examine the effect of CEO gender on the performance of Indian firms and to explain the economic channel for any such effect.

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Abstract

Purpose

The purpose of this paper is to examine the effect of CEO gender on the performance of Indian firms and to explain the economic channel for any such effect.

Design/methodology/approach

Using a panel of 100 Indian firms, the authors test whether there is a significant difference in the performance – measured as return on assets (ROA) and return on equity (ROE) – of firms with male vs female CEOs, in both time and space dimensions, using the difference-in-differences approach.

Findings

The average ROA of the sample firms decrease by about 10 percent after a female enters the CEO role. This negative result remains robust in both the time series as well as cross-sectional analyses. The decline is also observed when using ROE to measure performance. Further, the authors show that this negative effect is associated with an increase in agency costs that is observed following the appointment of a female CEO.

Originality/value

Previous studies have produced mixed results regarding the effect of having a female CEO on firm performance, and the research to date has not explored the economic channel through which this effect occurs. In this study, the authors show that the decline in performance observed among Indian firms flows from an increase in agency costs under female management.

Details

Journal of Economic Studies, vol. 46 no. 2
Type: Research Article
ISSN: 0144-3585

Keywords

Article
Publication date: 1 June 1941

DAMAGE to libraries has assumed dimensions which make it unlikely that any private beneficence alone will be able to effect restoration. Nor is it probable that we have…

Abstract

DAMAGE to libraries has assumed dimensions which make it unlikely that any private beneficence alone will be able to effect restoration. Nor is it probable that we have reached anything like the end of the destruction. Libraries are in the nature of things in great centres of population which are main targets of the enemy and they suffer accordingly. There is every hope that after the war the most determined effort will be made to repair every form of loss, and the libraries must be kept well to the fore by those who have charge of them; but the effort, in which we certainly hope such benevolent institutions as the Carnegie and similar trusts will assist, must be a universal one. It will also be considered a state obligation, we hope, based partly upon the State Insurance Scheme. In connexion with this, some librarians have had difficulty in persuading their authorities to insure books for anything like the money it would cost to replace them; it is curious that public men appear to think that books cost little or nothing! A reflection of this from the other side was the remark of a District Valuer on a claim for damage which certainly could not replace the lost books, that it was “excessive.” Cover should certainly be adequate.

Details

New Library World, vol. 43 no. 11
Type: Research Article
ISSN: 0307-4803

Article
Publication date: 10 July 2017

Jana Lay-Hwa Bowden, Jodie Conduit, Linda D. Hollebeek, Vilma Luoma-aho and Birgit Apenes Solem

Online brand communities (OBCs) are an effective avenue for brands to engage consumers. While engaging with the brand, consumers simultaneously interact with other OBC…

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Abstract

Purpose

Online brand communities (OBCs) are an effective avenue for brands to engage consumers. While engaging with the brand, consumers simultaneously interact with other OBC members; thus engaging with multiple, interrelated engagement objects concurrently. The purpose of this paper is to explore both positively and negatively valenced consumer engagement with multiple engagement objects, the interplay between these, and the spillover effect from consumers’ engagement with the OBC to their engagement with the brand.

Design/methodology/approach

Drawing on 16 in-depth interviews with OBC members of a luxury accessory brand, a constant comparative method was adopted using axial and selective coding procedures. The objective was to understand the nature of participants’ engagement with the brand, the OBC, and the interplay between individuals’ engagement with these objects. The coding framework and resultant interpretive frameworks address engagement valence, outcomes, and direction.

Findings

This study illustrates consumer expressions of consumers’ positively and negatively valenced engagement with a focal brand, and with the OBC. Further, it demonstrates the interplay (spillover effect) that occurs between consumers’ engagement with the OBC, to their engagement with the brand. While the existence of positively valenced engagement with the OBC was found to further enhance consumer brand engagement (i.e. reflecting an engagement accumulation effect), negatively valenced engagement with the OBC was found to reduce consumer brand engagement (i.e. reflecting an engagement detraction effect).

Originality/value

While consumer engagement has been recognized to have both positive and negative manifestations, this study demonstrates that consumers’ engagement valence may differ across interrelated engagement objects (i.e. the brand and the OBC). Further, we demonstrate the existence of engagement spillover effects from the OBC to the brand for both positively and negatively valenced engagement.

Details

Journal of Service Theory and Practice, vol. 27 no. 4
Type: Research Article
ISSN: 2055-6225

Keywords

Article
Publication date: 1 May 1939

ALL who have visited Liverpool for any length of time have affection for her. She lies alongside a noble river, watched over by the lofty Liver building and the perhaps…

Abstract

ALL who have visited Liverpool for any length of time have affection for her. She lies alongside a noble river, watched over by the lofty Liver building and the perhaps more architecturally perfect offices of the Mersey Dock authorities. Even in these days, when the very largest ships have been diverted to Southampton, splendid vessels come from and go to the ends of the earth almost daily. The river is the essential fact about Liverpool; she was born of the river and her waterfront is one of the world's rendezvous. As a city she compares favourably with any English town, and perhaps excels most in her few splendid buildings, amongst which the new and rapidly growing Cathedral takes first rank.

Details

New Library World, vol. 41 no. 10
Type: Research Article
ISSN: 0307-4803

Article
Publication date: 1 February 1978

The most obvious symptom of the most obvious trend in the building of new libraries is the fact that, as yet, no spade has entered the ground of the site on Euston Road…

Abstract

The most obvious symptom of the most obvious trend in the building of new libraries is the fact that, as yet, no spade has entered the ground of the site on Euston Road, London, upon which the new building for the British Library Reference Division has to be erected. Some twenty years of continued negotiation and discussion finally resulted in the choice of this site. The UK and much more of the world awaits with anticipation what could and should be the major building library of the twentieth century. The planning and design of a library building, however large or small, is, relatively speaking, a major operation, and deserves time, care and patience if the best results are to be produced.

Details

Library Review, vol. 27 no. 2
Type: Research Article
ISSN: 0024-2535

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