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Article
Publication date: 11 March 2019

Neal Arthur, Huifa Chen and Qingliang Tang

The purpose of this study is to investigate whether a country’s ownership concentration affects the financial reporting quality in a cross-country setting.

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Abstract

Purpose

The purpose of this study is to investigate whether a country’s ownership concentration affects the financial reporting quality in a cross-country setting.

Design/methodology/approach

This paper uses six accounting and auditing indicators to construct a comprehensive index to measure the country-level financial reporting quality.

Findings

The authors find a non-linear nature of the relationship between the national financial reporting quality and national ownership structure. Specifically, the relation is negative in a relatively spread ownership structure with no controlling shareholders, implying the entrenchment effects dominate. When ownership is highly concentrated, particularly with controlling shareholders whose interest is aligned with that of the firm, the relation turns to positive and alignment effects dominate.

Originality/value

The study is an important extension of prior research examining the financial reporting quality effect of ownership concentration. It enhances the understanding of the role of ownership concentration in determining a country’s financial reporting quality and has potential important policy implications for countries’ reformers and regulators who are concerned with the transparency of financial reporting and the quality of corporate governance.

Details

Journal of Financial Reporting and Accounting, vol. 17 no. 1
Type: Research Article
ISSN: 1985-2517

Keywords

Article
Publication date: 14 February 2022

Huifa Chen, Yuan George Shan, Qingliang Tang and Junru Zhang

This study aims to investigate why companies use the internal price of carbon (IPC) for carbon management.

Abstract

Purpose

This study aims to investigate why companies use the internal price of carbon (IPC) for carbon management.

Design/methodology/approach

The authors adopt sustainable transition management theory to design the research and explain the findings of empirical models. The sample includes companies that participated in the Carbon Disclosure Project (CDP) questionnaire survey, derived from 37 countries and regions for the period 2015–2018.

Findings

The results first reveal that transition management facilitates an upward adoption trend annually during the study period. Second, the authors find that the proxies for transition management are all correlated with the adoption of the IPC in the predicted direction. Third, the authors identify spatial patterns and driving factors for adoption of the IPC.

Originality/value

This study provides additional insight beyond the limited prior literature in this area. In particular, the findings regarding the influence of physical environment on climate-related decisions have not been documented in extant literature. IPC is expected to interact with and complement external price of carbon for climate change governance. Thus, the exploring results of the paper fill an important gap and pave the way for future study to examine emerging issues in the burgeoning field of carbon accounting for climate change.

Details

Meditari Accountancy Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2049-372X

Keywords

Article
Publication date: 26 June 2019

Linhan Zhang and Qingliang Tang

Water management is an emerging practice. This paper aims to propose a theoretical model of a corporate water management system (WMS) and empirically explores whether…

Abstract

Purpose

Water management is an emerging practice. This paper aims to propose a theoretical model of a corporate water management system (WMS) and empirically explores whether superior water management improves water use performance.

Design/methodology/approach

Our model of WMS consists of 10 structural elements. We draw on self-discipline theory to predict the results and use archival data from the Carbon Disclosure Project to measure and evaluate the overall quality and effectiveness of the water management of our sample companies.

Findings

Companies motivated to adopt self-discipline tend to proactively implement high-quality WMSs. However, further analyses suggest that water management without regulatory sanctions appears insufficient for reducing water usage, at least in the short term. Overall, this study reveals a clear and growing tendency for businesses to manage water risks and a corresponding momentum toward more rigid control of water consumption.

Research limitations/implications

Corporate participation in the Carbon Disclosure Project survey is voluntary. Thus, the data in this paper are subject to self-selection bias, and what the companies claim concerning their behavior may not reflect the reality of their business practices. In addition, the inferences drawn here are based on data from only large firms. Future researchers could investigate whether and how corporate WMS continued to develop or decline in recent years, and how such practices integrate with other aspects of management (including carbon and energy).

Practical implications

This paper responds to water scarcity by exploring how the development of corporate WMS is driven by self-discipline motivation. This study sets out an agenda for the future of water accounting and management which can be used to guide research and stimulate extension in practice. Governments and non-governmental organizations may utilize the results to guide and bind corporations to achieve sustainability.

Social implications

The efficient use of freshwater is essential for sustainability, but limited studies have addressed the issue. The current paper explores this important issue, and our findings suggest regulatory institution is necessary to effectively enhance water usage.

Originality/value

This paper represents an early attempt to model corporate water management practices. A WMS should facilitate resilience in water management, measurement of water performance, and comparability among firms. This study contributes to the conceptualization and empirical assessment of self-discipline in motivated water management and enhances the validity and applicability of the theory of self-disciplining in sustainability research.

Details

Sustainability Accounting, Management and Policy Journal, vol. 10 no. 3
Type: Research Article
ISSN: 2040-8021

Keywords

Article
Publication date: 1 July 2019

Ragini Rina Datt, Le Luo and Qingliang Tang

The purpose of this study is to examine the impact of legitimacy threats on corporate incentive to obtain external carbon assurance.

Abstract

Purpose

The purpose of this study is to examine the impact of legitimacy threats on corporate incentive to obtain external carbon assurance.

Design/methodology/approach

The sample consists of the largest US companies that disclosed carbon emissions to CDP (formerly the Carbon Disclosure Project) over the period 2010-2013. Based on legitimacy theory, firms are more likely to obtain carbon assurance when they are under greater legitimacy threat. Carbon assurance is measured using CDP data. Three proxies are identified to measure legitimacy threat related to climate change: carbon emissions intensity, firm size and leverage.

Findings

This paper finds that firms with higher levels of emissions are more likely to obtain independent assurance, and large firms show the same tendency, as they are probably under pressure from their large group of stakeholders. In sum, the findings suggest that firms with higher carbon emissions face greater threats to their legitimacy, and the adoption of carbon assurance can mitigate risks to legitimacy with enhanced credibility of carbon disclosure in stakeholders’ decision-making.

Research limitations/implications

The study has some limitations. The authors have relied on CDP reports for analysis and focus on the largest companies in the US. Caution should be exercised when generalising the results to smaller firms, other countries or voluntary carbon assurance information disclosed in other communications channels.

Practical implications

This study provides extra insights into and an improved understanding of determinants and motivation of carbon assurance, which should be useful for policymakers to develop policies and initiatives for carbon assurance. The collective results should be useful for practicing accountants and accounting firms.

Originality/value

The paper investigates how legitimacy threats affect firms’ choice of external carbon assurance in the context of US, which has not been documented previously. It contributes to the understanding of legitimacy theory in the context of voluntary carbon assurance.

Details

Accounting Research Journal, vol. 32 no. 2
Type: Research Article
ISSN: 1030-9616

Keywords

Article
Publication date: 5 December 2016

Qingliang Tang and Le Luo

The purpose of this paper is to investigate how firm- and country-level determinants affect corporate ecological transparency.

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Abstract

Purpose

The purpose of this paper is to investigate how firm- and country-level determinants affect corporate ecological transparency.

Design/methodology/approach

The study utilizes multiple theories that are commonly used by corporate social responsibility studies to explain the corporate ecological transparency. Based on a sample of 243 Global 500 firms, the authors examine the impact of shareholders’ interest in ecological information, creditors’ concern, firm size, industry membership, the presence of emission trading scheme (ETS), stringency of environmental regulations on corporate ecological transparency.

Findings

The paper documents evidence that larger firms, firms in GHG-intensive sectors, and highly leveraged firms tend to produce more ecological disclosures. In addition, ecological transparency is higher in countries with an ETS and increases with more stringent environmental regulation. Finally, the authors find little evidence that shareholders of these firms are concerned with this information.

Research limitations/implications

The sample is restricted to the largest firms with relevant carbon profile information. Thus, caution should be exercised when generalizing the inferences.

Practical implications

Sustainability has become one of the most importance topics in business agenda. Firms’ attitude and decision about the ecological transparency will affect internal firm performance, external stakeholder engagement, and policy makers’ attention. It determines the firms’ long-term operation and development.

Originality/value

The study contributes to the literature by utilizing multiple theories to explain ecological transparency. Each of the theories provided only a partial explanation for ecological transparency. Thus, we need to consider the firms’ behaviors from multiple dimensions. In particular, stakeholder theory and institutional theory are the dominant perspectives accounting for managers’ propensity to disclose a firm’s ecological footprint.

Details

Asian Review of Accounting, vol. 24 no. 4
Type: Research Article
ISSN: 1321-7348

Keywords

Article
Publication date: 3 September 2018

Jibriel Elsayih, Qingliang Tang and Yi-Chen Lan

The purpose of this paper is to explore the association between corporate governance (CG) mechanisms and the extensiveness of carbon disclosure.

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Abstract

Purpose

The purpose of this paper is to explore the association between corporate governance (CG) mechanisms and the extensiveness of carbon disclosure.

Design/methodology/approach

This paper uses Ordinary Least Squares (OLS) regression model with data from 2009 to 2012 for largest Australian companies that voluntarily disclose their information to the carbon disclosure project.

Findings

The authors find that board independence, board diversity and managerial ownership are significantly correlated with the degree of carbon transparency, while the existence of environmental committee is not.

Practical implications

The findings of this paper should be useful for government and capital market regulators who concern the quality of CG and carbon actions. First, the evidence in this paper suggests that current CG practice that emphasize board diversity and independence seems encouraging an environment friendly decision and adopt carbon reduction initiatives. Second, however, the current version of CG codes need more stress on none financial goals that should help corporate executives to balance value enhancement vis-à-vis ecosystem protection. Finally, another implication for policy-makers is CG should be re-structured so as to motivate firms to pursue long-term sustainable development instead of taking short-sight view of firm performance.

Originality/value

This paper contributes in the increasing body of literature indicating that CG encourages a proactive corporate strategy in general and carbon disclosure in particular. The authors add new empirical evidence which has policy implication that CG should be improved so as to encourage executives to engage in more sustainable development and stakeholder long-term value protection.

Details

Accounting Research Journal, vol. 31 no. 3
Type: Research Article
ISSN: 1030-9616

Keywords

Article
Publication date: 3 October 2016

Qingliang Tang, Huifa Chen and Zhijun Lin

The purpose of this study is to measure the financial reporting quality of 38 main countries (regions) in the world from 2000 to 2014.

3812

Abstract

Purpose

The purpose of this study is to measure the financial reporting quality of 38 main countries (regions) in the world from 2000 to 2014.

Design/methodology/approach

This paper uses six accounting and auditing indicators to construct a comprehensive index for the measurement of country-level financial reporting quality. To test the validity of the methodology, the index to test institutional impacts on national financial reporting quality is used.

Findings

It was found that the results are consistent with the predictions and previous studies. The evidence suggests that the quality measure in this paper is innovative and appropriate and can provide a useful tool for researchers who are concerned with financial reporting quality at the country level.

Originality/value

The study is the first in the literature to use both accounting and auditing data to construct financial reporting quality indicators. The study should help international investors assess investment risks in foreign financial markets so as to make an informed decision. In addition, the diversity of financial reporting practices documented in the paper should prompt market regulators, accounting standard setters and professional accounting bodies to reinforce the efforts on international convergence of accounting and financial reporting standards and practices.

Article
Publication date: 27 September 2019

Ragini Rina Datt, Le Luo and Qingliang Tang

This study aims to examine whether good carbon performers disclose more carbon information overall than poor performers, and if yes, how firms select different types of…

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Abstract

Purpose

This study aims to examine whether good carbon performers disclose more carbon information overall than poor performers, and if yes, how firms select different types of carbon information to signal their genuine superior carbon performance.

Design/methodology/approach

The level of disclosure is measured based on content analysis of Carbon Disclosure Project (CDP) reports. The study sample consists of 487 US companies that voluntarily participated in the CDP survey from 2011 to 2012. The authors use the t-test and multiple regression models for analyses.

Findings

The results consistently indicate that firms with better carbon performance disclose a greater amount of overall carbon information, supporting the signalling theory. In addition, in contrast to previous studies that merely consider the overall disclosure level, the authors also investigate disclosure of each major aspect of carbon activities. The results show that good carbon performers disclose more key carbon items, such as goods and services that avoid greenhouse gas (GHG) emissions, external verification and carbon accounting, to signal their true type.

Research limitations/implications

This study has some limitations. The authors rely on CDP reports for analysis and focus on the largest companies in the USA. Caution should be exercised when generalising the results to other countries, smaller firms or voluntary carbon information disclosed in other communications channels.

Practical implications

Because carbon disclosure has already been moving from a voluntary to mandatory requirement in many jurisdictions, the format and content of CDP reports might be considered for a formal standalone GHG statement. Based on the results, the authors believe that there should be industry-specific disclosure guidelines, and more disclosure should be made at the project level.

Originality/value

In the context of climate change, this study provides support for the signalling theory by utilising the relationship between voluntary carbon disclosure and performance. The study also provides empirical evidence on how companies may use different types of carbon information to signal their underlying carbon performance.

Details

Accounting Research Journal, vol. 32 no. 3
Type: Research Article
ISSN: 1030-9616

Keywords

Article
Publication date: 1 May 2000

Qingliang Tang and Amy Lau

Compares China‘s financial reporting systems before and after the reforms of 1993, which is seen as a dramatic turning point. Analyses the economic factors driving…

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Abstract

Compares China‘s financial reporting systems before and after the reforms of 1993, which is seen as a dramatic turning point. Analyses the economic factors driving accounting reforms and examines in more detail the influence of the developing capital market and increasing foreign investment. Tabulates the differences between the format, contents and types of financial statements and disclosures and financial ratios, before and after reform. Gives examples of some remaining problems, summarizes the key features of the new system and urges Chinese accountants and policy makers to adjust Western principles and systems to the unique environment of China.

Details

Managerial Finance, vol. 26 no. 5
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 15 December 2003

Lloyd Yang, Alan Dunk, Alan Kilgore, Qingliang Tang and Z.Jun Lin

China is conducting an open market policy and Chinese firms are seeking independent audit services. As a result, the Chinese accounting profession is expanding at a…

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Abstract

China is conducting an open market policy and Chinese firms are seeking independent audit services. As a result, the Chinese accounting profession is expanding at a tremendous speed, and has played an important role in economic reform. However, Chinese auditing operates in a very different environment from those experienced in Western countries. Consequently, there is considerable concern about auditor independence in China. The purpose of this paper is to examine some reasons for a lack of independence in the Chinese audit profession. We critically review empirical evidence regarding auditor practice in China. We then make some suggestions that might improve auditor independence.

Details

Managerial Finance, vol. 29 no. 12
Type: Research Article
ISSN: 0307-4358

Keywords

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