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To complete this case, students will need to access financial statements from the Securities and Exchange Commission’s webpage. The links are provided. Students will also need to review the conceptual framework that is typically covered in Intermediate 1 to respond to question 5.

This case is based on the three financial statement restatements that Weatherford International Ltd. made over an approximately 18-month period. The restatements were due to a fraud committed by manipulating the income tax accrual in the financial statements. The manipulation used was to overstate the amount of income used to calculate the dividend exclusion and then use a relatively high tax rate to calculate the resulting tax benefit. The tax rate used for the fraud was substantially more than Weatherford’s effective tax rate (ETR), which was a prominent part of the company’s strategic growth plan. The tax senior with the external auditors who reviewed the entry made for the dividend exclusion captured the inconsistency with the comment that “This [the entry] deserves a huh?” The case is intended for students in Intermediate 2, where financial statement restatements and their effect on the company’s financial statements are typically covered. During the years covered in this case, Weatherford was also under investigation for violations of the Foreign Corrupt Practices Act (FCPA). Weatherford’s FCPA violations included multiple instances of bribery, the inappropriate use of volume discounts, improper payments and kickbacks in the United Nation’s Oil for Food program. Weatherford received the eighth-largest fine in the history of FCPA violations (at that time) of $152m. Weatherford’s FCPA investigation expanded, and the company paid another $100m in fines for violations of sanctions law and export control law. This case focuses only on the fraudulent manipulation of the financial statements through the tax accrual and does not delve into the other investigations. However, the linkage between those investigations and the fraud in this case is Weatherford’s nonexistent internal controls.

This case was designed to be used in Intermediate 2 financial accounting classes to highlight financial statement restatements and review the conceptual framework and materiality. The students who used the case did not have difficulty with the tax aspect of the case. However, most of the students had taken one tax class previously or concurrently. If students have not had any exposure to tax, the instructor might want to walk students through the tax aspects of the case.

This paper aims to contribute to the development of the European Union (EU) regulatory environment for sustainability reporting by analyzing how materiality is defined in the Non-Financial Reporting Directive (NFRD) and Corporate Sustainability Reporting Directive (CSRD) and by examining the added value and challenges of legalizing reporting and materiality requirements from both regulatory and practical company perspectives. It provides insights on whether this is reflected by EU pharmaceutical companies and to what extent companies report information on their materiality analysis process.

Doctrinal analysis was used to examine regulatory instruments. Qualitative document analysis was used to analyze companies’ reports. The added value and challenges were examined using a governance approach. It focused on legalizing reporting and materiality requirements, with a brief extension to corporate management and organization studies.

Materiality has evolved from a vague concept in the NFRD toward double materiality in the CSRD. This was reflected by the industry, but reports revealed inconsistencies in materiality definitions and reported information. Challenges include lack of self-reflection and company-centric perceptions of materiality. Companies should explain how they identify relevant stakeholders and how input is considered in decision-making.

Managers must consider how they conduct materiality assessments to meet society’s expectations. The underlying processes should be explained to increase the credibility of reports. Sustainability reporting should be seen as a corporate governance tool.

This work contributes to the literature on materiality in sustainability reporting and to the debate on the need for a holistic, society-centric approach to enhance the sustainability of companies.

Corporate Social Responsibility (CSR) reporting has been widely accepted as a vital tool for communicating with stakeholders on a range of social, environmental, and governance issues, but how companies define, interpret, apply, integrate, and communicate their CSR efforts and impacts in corporate reporting is anything but a straightforward task. The purpose of this chapter is to explore the concept of materiality in CSR reporting and demonstrate practical examples of good CSR and Sustainable Development Goals (SDGs) reporting practices. We chose the aviation industry because of its economic relevance, constant growth, and future expected changes in the aftermath of COVID-19. In addition, airlines affect many of the SDGs directly and indirectly with contending results. This chapter is timely because of the growing willingness by companies to integrate CSR and environmental, social, and governance (ESG) thinking into the corporate strategy and business operations using materiality assessment and enhancing their competitive advantage and ability to maintain long-term value and because ESG and ethical investing have become part of the mainstream investing. Thus, this chapter contributes to an understanding of the wide range of existing and new reporting frameworks and regulations and reinforces the importance of discussing how this diversity of approaches can affect the work toward worldwide comparability of CSR and sustainability reporting.

In the last two decades, risk reporting has followed a normative and calculative culture rather than the “materiality” of data. Although integrated reporting (IR) has become flooded with extra information, it does not adequately disseminate material information to stakeholders. In addition, the poor tone from the top diminishes creativity. This study aims to investigate how companies creatively address issues of the materiality of risk information in IR and how IR can be aligned with enterprise risk management.

Qualitative research was conducted via interviews with 50 chief risk officers and senior management executives in the Indian and UK insurance markets.

Overall, five institutions were observed to exhibit elements of being early adopters of institutional creativity. This confirmed the present study’s theoretical contribution of five divergent types of early adopters. The motivations for creativity are reflected in the resources available to these institutions.

To the best of the authors’ knowledge, this study provides a new insight into IR from internal mechanisms to deal with issue of materiality.

Despite the growing interest in the field of supply chain sustainability (SCS), little exploration of new theories exists. Therefore, this paper aims to introduce practice theories to SCS studies through a practice turn.

This is a conceptual paper in nature. Hence, based on theoretical arguments, the authors elaborate on how the practice turn can arise in the SCS field.

The theoretical elaboration is rooted in the understanding that sustainability is not limited to the materiality of environmental and social issues, as often observed. Instead, there is a need to include immaterial, emotional and intangible elements to better comprehend SCS practice. The authors argue that a continuum exists for a practice turn, including practice-based view, practice-based studies and critical practice theory.

The authors provide a research agenda with a comprehensive perspective of understanding the application and implications of practice theories to SCS.

The practice turn in SCS studies can support managers to better understand their practices not only through recognizing explicit activities but also mainly by reflecting on hidden elements that affect their performance.

SCS studies can better engage with grand challenges through a practice turn, which helps increase its contribution to solving social problems.

Unlike previous literature, the paper elaborates on how practice theories are powerful in supporting both scholars and practitioners in moving away from an extremely economic focus to genuinely embrace sustainability practice. In doing so, the practice turn appears as an important phase for SCS field maturity.

The effects of the spread of COVID-19 across the world are devastating, both from a health and an economic perspective. However, we also see encouraging examples of collaborative and innovative initiatives, in society and in organizations. The purpose of this paper is to focus on initiatives related to digital business model innovation. The authors explore how organizational characteristics provide a variety of opportunities for digital responses to the COVID-19 pandemic and discuss the potential consequences for the speed of digital transformation in organizations and society.

In this paper, the authors analyze how organizations attempt to mitigate the negative effects of fighting COVID-19 using digital business model responses. The authors draw on a qualitative study where they have collected data from the retail and service industries. They have analyzed the data in relation to theory to better understand this ongoing phenomenon.

The authors have identified four categories of organizations (crisispreneurs, accelerators, endurers and thrivers). Each category faces different challenges and shows a different intensity in their digital transformation. The authors propose that the rapid turn toward digital business models will have enduring effects, as organizations have gained transformational capabilities that will remain, and that the digital trajectory has, as a result, changed forever.

The findings in this paper point toward new challenges for leaders and policymakers in terms of how to support initiatives and meet the needs of different categories of organizations while simultaneously being conscious of the potential societal effects of this rapid digital shift. The authors hope that this paper can be of value for managing this shock and learning how to adapt for the future taking certain aspects of current business models as the departure point.

This paper aims to examine the processes of sustainability reporting assurance (SRA) and the influence they have on shaping perception from disclosures. Given the evidence of inconsistencies and ambiguities in assurance processes, this paper examines how legitimacy is attained and maintained at different stages of SRA.

Evidence collected from 23 semi-structured interviews with assurance providers (APs), consultants, professionals and non-governmental organisations (NGOs) (non-APs) was used to conduct a thematic analysis from the perspectives of interviewees.

APs and non-APs are united in recognising the value of SRA, although, perspectives on transparency between the two groups differ. Experience and industry knowledge are essential to SRA delivery with non-APs preferring accounting APs. Nevertheless, non-APs are concerned about the role of companies in deciding assurance scope, as it can affect scrutiny. APs favour data accuracy (as opposed to data relevance) assurance due to team dynamics and internal review influences, with the latter also restricting assurance innovation. APs are interested in accessing better evidence and stakeholder engagement evaluations. Providing advisory services was not rejected by all APs. The perspectives of APs and non-APs demonstrate how progress in SRA has gained pragmatic legitimacy with noticeable gaps that serve to undermine attainment of moral legitimacy.

SRA is a developing practice that will adopt changes as it continues to mature; some of these changes could impact findings in this research. General perspectives on SRA were sought from interviewees, this affected the ability for an in-depth focus on any of the range of interesting SRA issues that arose over the course of the research. Interviews were conducted with relevant parties in the SRA space that operate in the UK. Perspectives from parties outside the UK were not solicited.

Companies make an important decision to commission SRA. Findings in this research have highlighted specific non-APs issues of concern that can be useful in structuring operations and reporting regimes to facilitate assurance procedures. The findings will also be helpful to APs as they can direct more emphasis on stakeholder concerns towards demonstrating greater stakeholder accountability. Regulatory and standard setters can enact appropriate policies that can potentially drive the practice forward for assessment of cognitive legitimacy.

The findings provide relevant account of stakeholder voices on the quality of corporate disclosures that has a direct effect on the wellbeing of communities and sustainability of societies. Collective stakeholder input on expectations can shape sustainability discourse.

This research demonstrates the applicability of financial audit quality indicators in SRA processes, extends the debate around the effectiveness of new audit fields and highlights the challenges of maintaining legitimacy with different audiences.

This paper aims to examine the perspectives of auditors, regulators and financial report preparers on the effects of key audit matters (KAMs) reporting on audit effort, fees, quality and report transparency.

The authors conducted 21 semi-structured interviews with stakeholders (13 Audit Partners, 5 Chief Financial Officers and 3 regulators) and thematically analysed the interviews. They use the frame of “Paradox of Transparency” to explain the findings.

Auditors perceive that the overall quality control of their audits has improved both in the planning and execution stages, and such improvement can mostly be attributed to the coercive pressures from professional bodies and regulators. Nevertheless, audit fee remains unchanged. Auditors disclose industry generic items and descriptions of KAMs, sometimes masking the real problem areas of the clients. Even after improving the performative audit quality, transparency of audit reporting has not improved. Issues that warrant going concern qualifications or audit report modifications are now reported as KAMs. Hence, KAMs reporting might make the audit report less transparent.

Localised audit environments and institutions affect the transparency of KAMs reporting. Without attention to corporate governance and auditors’ independence issues, paradoxically, performative improvement in audit quality (due to the KAMs reporting requirement) does not enhance the transparency of audit reports.

To the best of the authors’ knowledge, this study is the first to provide field-level evidence in Bangladesh and other developing countries about the perceptions of auditors, financial report preparers and regulators on the effects of KAMs reporting on audit efforts, fees, quality and report transparency.

This chapter is dedicated to understanding the idea of international as a key notion to the development of globalisation and to promoting the rescaling of spaces and subjects in contemporary higher education. The author discusses the concept of scale as a performative device that activates the capacities of bodies. Instead of seeing scale as a naturalised and hierarchical structure of spatial distribution, the author understands it as an ensemble of discourses and practices that produce scalar effects. Globalisation uses scale to promote the idea that subjects would become ‘international’ by being linked to privileged spaces and bodies in the Global North. In this sense, globalisation is not merely about nodes where certain flows converge. Rather, the author understands it as the political conditions that control and constrain the space for certain flows to occur and not others. Using assemblage analysis, the author presents and analyses three scenes taken from his ethnographic records that have as a guiding line the materialisation of the international. These scenes report the experience of being a Latin American doctoral student attending a congress in the United States, a tense situation experienced at a Chilean university academic event, and the unpretentious manifestation of an elaborate idea of internationality from a personal experience of a trip to India. The results point to three elaborations of the international: an optimistic view of a shared world, a geopolitical internationality and the production of a global corporeality.

Traditionally, life cycle assessment (LCA) has focused on environmental aspects, but integrating social aspects in LCA has gained traction among scholars and practitioners. This study aims to review key social life cycle assessment (SLCA) themes, namely, drivers and barriers of SLCA implementation, methodology and measurement metrics, classification of initiatives to improve SLCA and customer perspectives in SLCA.

A total of 148 scientific papers extracted from the Web of Science database were used and analyzed using bibliometric and content analysis.

The findings suggest that the existing research ignores several aspects of SCLA, which impedes positive growth in topical scholarship, and the study proposes a classification of SLCA research paths to enrich future research. This study contributes positively to SLCA by further developing this area, and as such, this research is a primer to gain deeper knowledge about the state-of-the-art in SLCA as well as to foresee its future scope and challenges.

The study provides an up-to-date review of extant research pertaining to SLCA.