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Book part
Publication date: 14 November 2016

Robert H. Herz

Abstract

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More Accounting Changes
Type: Book
ISBN: 978-1-78635-629-1

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…

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 June 2018

Victoria C. Edgar, Matthias Beck and Niamh M. Brennan

The UK private finance initiative (PFI) public policy is heavily criticised. PFI contracts are highly profitable leading to incentives for PFI private-sector companies to…

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Abstract

Purpose

The UK private finance initiative (PFI) public policy is heavily criticised. PFI contracts are highly profitable leading to incentives for PFI private-sector companies to support PFI public policy. This contested nature of PFIs requires legitimation by PFI private-sector companies, by means of impression management, in terms of the attention to and framing of PFI in PFI private-sector company annual reports. The paper aims to discuss this issue.

Design/methodology/approach

PFI-related annual report narratives of three UK PFI private-sector companies, over seven years and across two periods of significant change in the development of the PFI public policy, are analysed using manual content analysis.

Findings

Results suggest that PFI private-sector companies use impression management to legitimise during periods of uncertainty for PFI public policy, to alleviate concerns, to provide credibility for the policy and to legitimise the private sector’s own involvement in PFI.

Research limitations/implications

While based on a sizeable database, the research is limited to the study of three PFI private-sector companies.

Originality/value

The portrayal of public policy in annual report narratives has not been subject to prior research. The research demonstrates how managers of PFI private-sector companies present PFI narratives in support of public policy direction that, in turn, benefits PFI private-sector companies.

Details

Accounting, Auditing & Accountability Journal, vol. 31 no. 6
Type: Research Article
ISSN: 0951-3574

Keywords

Article
Publication date: 5 June 2017

Mubarak Shehu Musawa, Suhaiza Ismail and Hawa Ahmad

The purpose of this paper is twofold: first, it seeks the perception of public-private partnership (PPP) experts on the importance of desirable PPP information that can be…

Abstract

Purpose

The purpose of this paper is twofold: first, it seeks the perception of public-private partnership (PPP) experts on the importance of desirable PPP information that can be voluntarily reported by the private sector; and second, it determines the extent and quality of voluntary disclosure of PPP information by private entities.

Design/methodology/approach

In achieving the first objective, the study uses a questionnaire survey. The questionnaire was distributed to PPP experts and 25 usable responses were received. In addressing the second objective, a content analysis procedure was utilized to analyse the 2015 annual reports of 11 construction companies. Descriptive statistics including the mean score, frequency and percentage were employed to analyse the responses of the questionnaire instrument and the annual reports disclosure.

Findings

The results of the questionnaire survey reveal that the majority of the items were rated as very important to be disclosed by the private sector in Malaysia. However, from the content analysis, it was also revealed that the extent and quality of voluntary information disclosed by the private construction companies were low.

Originality/value

This study is important as it contributes to the scant literature on PPP disclosure in Malaysia. The study is unique as it not only investigated the extent and quality of voluntary disclosure by private entities, but also solicited the perception of PPP experts on what voluntary items should be disclosed.

Details

Asia-Pacific Journal of Business Administration, vol. 9 no. 2
Type: Research Article
ISSN: 1757-4323

Keywords

Article
Publication date: 1 January 2013

Choi Ieng Chu, Bikram Chatterjee and Alistair Brown

The purpose of this paper is to investigate the factors driving greenhouse gas reporting by Chinese companies.

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Abstract

Purpose

The purpose of this paper is to investigate the factors driving greenhouse gas reporting by Chinese companies.

Design/methodology/approach

Content analysis of annual reports and corporate social responsibility (CSR) reports for the year 2010 of the top 100 A‐share companies listed on Shanghai Stock Exchange was conducted to investigate the extent of greenhouse gas reporting. Multiple regression analysis was performed to determine the factors driving these companies' greenhouse gas reporting.

Findings

It was found that most Chinese companies reported neutral and good news. The results also indicate larger companies operating in an industry which has higher level of carbon dioxide emissions tend to have higher levels of greenhouse gas disclosures, consistent with the expectation of legitimacy theory. However, profitability and overseas listing were not significantly related to greenhouse gas reporting. This is consistent with the findings of previous literature. Finally, contrary to expectations, state‐owned companies report less greenhouse gas information than private companies.

Originality/value

The paper contributes towards theory development by testing legitimacy theory in the context of greenhouse gas reporting by Chinese companies and contributes to existing literature on greenhouse gas reporting by focussing on the large emerging economy of China. The practical contribution of the paper rests in the area of accounting practice. The results outline the dearth in greenhouse gas reporting by Chinese companies, suggesting there needs to be future development of accounting standards in this area.

Details

Managerial Auditing Journal, vol. 28 no. 2
Type: Research Article
ISSN: 0268-6902

Keywords

Book part
Publication date: 23 July 2020

Bryan Cataldi and Tom Downen

Private company investors operate in unique environments. Seed equity investors, which generally include venture capitalists and angel investors, often have the…

Abstract

Private company investors operate in unique environments. Seed equity investors, which generally include venture capitalists and angel investors, often have the particularly unusual role of becoming involved in the oversight of the investee company. This continuing involvement with the investee firm introduces conflicting interests: the desire to maximize the profit from the investment, but also the desire to maintain a positive relationship with the entrepreneur(s) (consistent with the theory of upper echelons/strategic management). We discuss in detail this unusual investment context and the role that accounting disclosures can have in this environment. We predict that accounting disclosures can influence the tradeoff between the profit motive and the relationship motive. Using 64 experienced angel investors as participants in a realistic experimental setting, we find that disclosures indicating conservatively biased accounting choice and lower account risk (variance) lead to angels increasing the valuation of the target firm and forgoing higher profits. Increasing the valuation serves to foster the relationship with the entrepreneur(s). Our findings have implications for entrepreneurs making choices about discretionary disclosures and for standard setters; we also inform theory related to overcoming anchoring.

Details

Advances in Accounting Behavioral Research
Type: Book
ISBN: 978-1-83867-402-1

Keywords

Article
Publication date: 1 October 2010

L.J. Stainbank

Differential reporting was introduced in South Africa with the enactment of the Corporate Laws Amendment Act 24 2006. Since it was urgent that the standard‐setters provide…

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Abstract

Differential reporting was introduced in South Africa with the enactment of the Corporate Laws Amendment Act 24 2006. Since it was urgent that the standard‐setters provide limited interest companies with interim guidance as to the preparation and presentation of financial statements, South Africa adopted the International Accounting Standards Board’s International Financial Reporting Standard for Small and Mediumsized Entities in its draft form. This study looks at the development of accounting standards for small and mediumsized entities in South Africa. It also examines analyses of prior research on differential reporting and the due process of the International Accounting Standards Board on this topic, as well as the due process of the South African standard‐setter. The paper provides a contextual analysis of the unique reporting environment of South African companies and concludes that adopting the draft IFRS for SMEs may have been the best option for the standard‐setting body in providing relief for limited interest companies from the cost of complying with the International Financial Reporting Standards while still enabling auditors to express an opinion on the financial statements.

Details

Meditari Accountancy Research, vol. 18 no. 2
Type: Research Article
ISSN: 1022-2529

Keywords

Article
Publication date: 2 August 2019

Suhaiza Ismail, Mubarak Shehu Musawa and Hawa Ahmad

The purpose of this paper is to examine the extent public listed construction firms in Malaysia disclose mandatory information on public private partnership (PPP…

Abstract

Purpose

The purpose of this paper is to examine the extent public listed construction firms in Malaysia disclose mandatory information on public private partnership (PPP) projects. This paper is important as the level of disclosure of PPP information reflects the extent of transparency as practiced by the companies involved in PPP projects.

Design/methodology/approach

In achieving the aim, a content analysis procedure was carried out to analyse the 2015 annual reports of the construction companies. Descriptive statistics including the mean score, frequency and percentage were employed to analyse the disclosure of the annual report.

Findings

The overall mean disclosure score of the sampled companies is 40 per cent, which connotes a low level of disclosure of mandatory information on PPP. The companies also tend to disclose more mandatory financial information than non-financial information.

Originality/value

This paper is one of the few studies that investigated the level of mandatory disclosure of PPP information, thus contributing to the scanty literature on PPP transparency not only in Malaysia but also internationally.

Details

Built Environment Project and Asset Management, vol. 9 no. 5
Type: Research Article
ISSN: 2044-124X

Keywords

Article
Publication date: 24 June 2019

Muttanachai Suttipun

The purpose of this paper is to investigate the extent and pattern of the sufficiency economy philosophy (SEP) reporting of listed companies from the Stock Exchange of…

Abstract

Purpose

The purpose of this paper is to investigate the extent and pattern of the sufficiency economy philosophy (SEP) reporting of listed companies from the Stock Exchange of Thailand (SET) between 2012 and 2016, and to compare the SEP scores of reporting in the companies’ corporate annual reports during the period studied and between four groups of interest, based on ownership status, country of origin of company, type of auditor and type of industry.

Design/methodology/approach

Listed companies of the SET were used as the population, whereas a sample of 70 firms was investigated in the study. Content analysis by checklist was used to quantify the extent and pattern of SEP reporting in annual reports.

Findings

The results showed that the average score for SEP reporting was 44.28 out of a possible 64 categories of reporting included in the checklist. Moreover, there was a significant increase in the SEP reporting score during the period studied. The results also indicated that there was a significant difference in the SEP reporting scores between groups, based on country of origin, auditor type and industry type.

Originality/value

As the first longitudinal study of SEP reporting in Thailand, the study demonstrated the effective rule of SET to Thai listed companies providing higher voluntary information reporting during period being study.

Details

Asia-Pacific Journal of Business Administration, vol. 11 no. 2
Type: Research Article
ISSN: 1757-4323

Keywords

Article
Publication date: 30 September 2014

Hannu Ojala, Mervi Niskanen, Jill Collis and Kati Pajunen

This paper aims to focus on economic consequences of audit outcomes by investigating the concept of audit quality operationalised as seven components of audit benefits to…

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Abstract

Purpose

This paper aims to focus on economic consequences of audit outcomes by investigating the concept of audit quality operationalised as seven components of audit benefits to owner-managers of small companies.

Design/methodology/approach

The authors analyse survey data collected in 2013 from 642 small private companies above the audit exemption threshold in Finland.

Findings

No significant association was found between engagement of a Big 4 auditor (proxy for audit quality) and any of the audit benefits tested. However, the results provide consistent evidence of a positive relationship between the owner-manager’s perception of the competence and reliability of the external accountant and the perceived benefits of audit. It was also found that companies which do not incorporate e-processes in the accounting system are more likely to value the internal control benefits provided by audit.

Research limitations/implications

Small business surveys suffer from poor response rates. To some extent, the authors overcame this problem by using two focused sampling frames and reminders. Care must be taken when generalising the results, as the definition of “small” varies across jurisdictions.

Originality/value

By focusing on small private companies, the research contributes to the audit quality literature. Contrary to studies of listed companies, the authors conclude that use of a Big 4 auditor is not a sufficient surrogate for audit quality in small companies. The authors go beyond aggregate measures of audit quality used in previous studies and identify specific audit benefits.

Details

Managerial Auditing Journal, vol. 29 no. 9
Type: Research Article
ISSN: 0268-6902

Keywords

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