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Article
Publication date: 13 April 2023

Prapaporn Kiattikulwattana and Ra-Pee Pattanapanyasat

This study examines whether investors value the timing and/or information of mandatory disclosures in a unique research setting of listed companies in Thailand.

Abstract

Purpose

This study examines whether investors value the timing and/or information of mandatory disclosures in a unique research setting of listed companies in Thailand.

Design/methodology/approach

The authors adopt an event-study based approach. Abnormal stock returns are calculated using an OLS market model to measure market reactions to three types of mandatory reports issued by listed Thai firms: financial statements, Form 56-1 and Form 56-2. These reports are released sequentially but contain overlapping information content. Multivariate regression models are employed to examine the market reactions to these regulatory reports and explore the characteristics of firms that affect the market response.

Findings

The stock market reacts differentially to these reports. The financial statements, which are filed the earliest and are the most concise, prompt the strongest reaction. Investors similarly react significantly to Form 56-1 and Form 56-2, although Form 56-2 provides additional information beyond Form 56-1. The market reactions to small firms are stronger. Collectively, equity investors focus on the timeliness of disclosures rather than the information disclosed in the mandatory reports.

Practical implications

The evidence provides support for ongoing regulatory initiatives aimed at improving the timeliness of mandatory disclosures in emerging economies.

Originality/value

Prior studies on disclosure regulation investigate either the effect of information content or the timing of mandatory disclosures in isolation. The authors differentiate the effect of information content from disclosure timing and extend the literature by suggesting that investors incrementally value timeliness of disclosures. Investors perceive the benefit of the timely release of quantitative information compared to subsequent narrative disclosures. Between Form 56-1 and Form 56-2, the earlier release of the narrative non-financial information is incrementally traded into share prices.

Details

Journal of Accounting in Emerging Economies, vol. 14 no. 2
Type: Research Article
ISSN: 2042-1168

Keywords

Open Access
Article
Publication date: 3 May 2022

Elissavet-Anna Valvi

The aim of the present study is to shed light on the role of legal practitioners, namely, lawyers and notaries, in the fight against money laundering: Are they considered as…

3061

Abstract

Purpose

The aim of the present study is to shed light on the role of legal practitioners, namely, lawyers and notaries, in the fight against money laundering: Are they considered as facilitators or obstacles against money laundering? How does the global and the EU legal framework deal with the legal professionals?

Design/methodology/approach

The research follows a deductive approach attempting to respond to questions such as: How do the lawyers’ and notaries’ societies react in front of the anti-money laundering measures that concern them and why? What are the discrepancies between the lawyers’ professional secrecy and the obligations that EU anti-money laundering legislation assigns them?

Findings

This study disclosures the response of the European union and international legal and regulatory framework as well as the reflexes of the international and European legal professionals’ associations to this danger. It also demonstrates the reaction of lawyers against European union anti-money laundering legislation, to the point that it limits not only the confidentiality principle but also the position of the European judicial systems to the contradiction between this principle and the lawyers’ obligation to report their suspicions to the authorities.

Research limitations/implications

To fulfil the study goals, it was necessary to overcome some obstacles, like the limitation of existing sources. Indeed, transnational empirical research considering the professionals who facilitate money laundering is narrow. Besides, policymakers and academics only recently expressed more interest in money laundering and its facilitators.

Originality/value

This paper fulfils an identified need to study the legal professionals’ role not only in money laundering practices but also in anti-money laundering policies.

Article
Publication date: 21 March 2023

Xuan Sean Sun, Ahsan Habib and Daifei Troy Yao

This study aims to examine the impact of different levels of required book-tax conformity (BTC) on audit clients' demand for auditor-provided tax services (APTS). In addition, the…

Abstract

Purpose

This study aims to examine the impact of different levels of required book-tax conformity (BTC) on audit clients' demand for auditor-provided tax services (APTS). In addition, the authors also investigate the effects of the European Union (EU) Regulation (2014).

Design/methodology/approach

This study utilizes a sample of listed companies from 10 EU countries between 2010 and 2019. The final sample consists of 16,049 firm-year observations from 2,515 unique firms, and the authors use both probit and ordinary least square (OLS) regression models in this study.

Findings

The main finding of this paper is that companies listed in countries with a higher level of BTC are less likely to purchase tax services from incumbent auditors and pay fewer auditor-provided tax service fees. Results from further analyses confirm that firms substantially reduced their purchase of APTS after the EU Regulation (2014) was implemented, but these reduced purchases were found to be more pronounced for firms located in countries with low BTC.

Originality/value

This study advances the understanding of the determinants of APTS and the consequences of BTC. Specifically, the authors report that variation in a country-specific feature (i.e. BTC) also affects firms' decision to purchase APTS. Moreover, this paper provides some preliminary evidence of the new regulation and contributes to the literature on APTS regulation. The findings of this study have important policy implications for regulators and are also relevant for various capital market participants.

Details

Journal of Accounting Literature, vol. 45 no. 3
Type: Research Article
ISSN: 0737-4607

Keywords

Open Access
Article
Publication date: 10 August 2023

Adrienne Heritier

This paper aims to conceptualize and empirically illustrate the challenges that financial market regulation presents to politicians and the organization tasked with specifying…

Abstract

Purpose

This paper aims to conceptualize and empirically illustrate the challenges that financial market regulation presents to politicians and the organization tasked with specifying regulations and supervising their implementation in the interest of users and consumers of financial instruments. It analyses the problem from the viewpoint of the governor's dilemma and the control/competence conflict, the linked problem of the rent-seeking of agents/intermediators and consumers of financial instruments. Political accountability problems are enhanced by the materiality of the technologies used, i.e. algo trading.

Design/methodology/approach

The paper theoretically conceptualizes and empirically illustrates the argument.

Findings

The paper finds that regulators of digitalized financial markets are faced with considerable problems and depend on private agents when regulating financial transactions. However, the new technological instruments also offer new possibilities for securing compliance.

Research limitations/implications

Further research should focus more in-depth on the cooperation between public and private actors in the specification and implementation of regulatory details. It should further investigate the conditions which allow regulators to use RegTech in the surveillance of financial firms.

Practical implications

Since financial market transactions are opaque for most users, the creation of more transparency is crucial to hold regulators accountable in their activity of surveillance of financial firms. New algorithm-based technologies may lend important support in doing so.

Originality/value

By linking the different analytical perspectives, i.e. the governor's dilemma vis-à-vis the intermediator or agent and the possible rent-seeking of intermediators, under the condition of a highly developed technology of financial transactions as well as the market structure, the paper offers new insights into the limits as well as new opportunities of regulating financial markets allowing for political accountability of regulators and financial firms.

Details

International Trade, Politics and Development, vol. 7 no. 3
Type: Research Article
ISSN: 2586-3932

Keywords

Article
Publication date: 8 November 2023

Casper Hendrik Claassen, Eric Bidet, Junki Kim and Yeanhee Choi

Public sector institutional entrepreneurship efforts may contribute to addressing social challenges by creating an enabling regulatory environment that promotes social enterprise…

Abstract

Purpose

Public sector institutional entrepreneurship efforts may contribute to addressing social challenges by creating an enabling regulatory environment that promotes social enterprise formation and fosters complementarity between the public sector and social enterprises. The outcomes of such public sector institutional entrepreneurship are explored in this study. To assess the outcomes of such public sector initiatives in South Korea, the perspectives of executives (n = 40) of government-certified social enterprises are assessed.

Design/methodology/approach

Several research methodologies were combined, including purposive sampling with an 11-point Likert scale, hierarchical clustering and principal component analysis. The literature on government–nonprofit relations as well as public sector institutional entrepreneurship was leveraged.

Findings

This research results indicate that the enabling regulatory environment with entrenched funding and incubation mechanisms produces mixed-to-positive outcomes if framed with reference to public sector–social enterprise complementarity. The authors identified three perspective-based ideal types that have differential views of isomorphic regulatory pressures, the efficacy of incubation and scaling programs, participation in policymaking and other aspects of public sector patronage.

Originality/value

This study contributes to relating the literature on public sector institutional entrepreneurship and government–third sector relations by empirically assessing how social enterprises attracted by government demand-side signaling to become certified as social enterprises encounter and perceive an ostensibly enabling regulatory ecosystem, with its derivative policies and mechanisms, crafted by the public sector.

Details

International Journal of Public Sector Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0951-3558

Keywords

Article
Publication date: 16 November 2023

Noel Hyndman, Irvine Lapsley and Christina Philippou

The primary purpose of this paper is to provide an analysis of the key perspectives that emerge in this Accounting, Auditing & Accountability Journal (AAAJ) Special Issue as a…

Abstract

Purpose

The primary purpose of this paper is to provide an analysis of the key perspectives that emerge in this Accounting, Auditing & Accountability Journal (AAAJ) Special Issue as a basis for determining the existence or otherwise of a Soccer Society, as well as reflecting on the challenges that evidence of corruption in soccer (the beautiful game) has had on the game to date. Reflections on these matters are then utilised to offer a prospective analysis of issues for further research.

Design/methodology/approach

The paper is a reflective analysis that draws on existing societal work to provide key dimensions of accounting and accountability for significant organisations in the world of sport in general and soccer in particular.

Findings

Much prior research on soccer has largely focussed on the internal workings of soccer organisations, with little discussion of the importance of context. This paper explores the influence of the game more broadly. Moreover, a number of the papers included illustrate an overwhelming sense of joy and pleasure from experiences of the beautiful game, as well as providing evidence of the general societal good that can flow from it. However, the study also highlights concerns emanating from weak, and seemingly pliable, governance, regulatory and accountability regimes that provide a fertile field for corruption and sportswashing.

Research limitations/implications

This paper highlights a research agenda as an encouragement to interdisciplinary accounting researchers to investigate accountability and governance issues as a basis for evidence-based discussions of the impact of soccer and its regulation.

Originality/value

This paper specifically, and the Special Issue more broadly, offers a set of original empirical and theoretical contributions with respect to an activity that has faced limited scrutiny and consideration by academic accountants. Together, they offer a substantive body of work to enable future research in this area.

Details

Accounting, Auditing & Accountability Journal, vol. 37 no. 2
Type: Research Article
ISSN: 0951-3574

Keywords

Open Access
Article
Publication date: 5 January 2024

Jesper Haga and Kim Ittonen

This paper examines the organizational resilience of audit firms during the early stages of COVID-19. The unexpected restrictions placed on travel and on-site working created…

Abstract

Purpose

This paper examines the organizational resilience of audit firms during the early stages of COVID-19. The unexpected restrictions placed on travel and on-site working created unanticipated barriers for auditors in Hong Kong. The authors expect that auditors with greater organizational resilience can respond to unexpected situations and restore expected performance levels relatively quickly.

Design/methodology/approach

The authors utilize a sample of 1,008 companies listed on Hong Kong Stock Exchange (HKEX) with a financial year-end of December 31. The authors identify five proxies contributing to organizational resilience: auditor size, industry specialization, diversity, geographic proximity to the client and auditing a new client. The authors use audit report timeliness as this study's main dependent variable.

Findings

This study's full-sample results suggest that larger auditors, industry specialists and auditors with closer relationships to clients issued more timely audit reports during the pandemic. The analysis of a subsample of companies that initially published unaudited financial statements reveals that industry expertise and longer auditor-client relationships significantly reduced the need for year-end audit adjustments. Finally, the authors find that larger auditors were more likely to offload clients, whereas industry specialists were more likely to retain clients.

Research limitations/implications

The results of the paper suggests that audit firm characteristics associated cognitive abilities, behavioral characteristics and contextual conditions are associated with audit firm organizational resilience and, consequently, helps auditors respond unexpected changes in the audit environment.

Practical implications

The findings of the paper are informative for those involved in audit firm management or auditor hiring and retention decisions.

Originality/value

This study is the first to link organizational resilience to the performance of audit firms in a time of unexpected events. The authors connect three auditor and two auditor-client dimensions to the organizational resilience of the audit firms.

Details

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

Keywords

Open Access
Article
Publication date: 3 November 2022

Maria Aluchna, Maria Roszkowska-Menkes and Bogumił Kamiński

Non-financial reporting (NFR) is viewed as a major step towards organisational transparency and accountability. While the number of non-financial reports published every year has…

6575

Abstract

Purpose

Non-financial reporting (NFR) is viewed as a major step towards organisational transparency and accountability. While the number of non-financial reports published every year has been growing exponentially over the last two decades, their quality and effectiveness in managing environmental, social and governance (ESG) performance have been questioned. Addressing these concerns, several jurisdictions, including EU Member States, introduced mandatory NFR regimes. However, the evidence on whether such regulation truly translates into enhanced ESG performance remains scarce. This paper aims to fill this gap in the literature by investigating the impact of the EU’s Directive 2014/95/EU (Non-financial Reporting Directive, NFRD) on the ESG scores of Polish companies.

Design/methodology/approach

Drawing upon institutional and strategic perspectives on legitimacy theory, the authors test the relationship between the introduction of the NFRD and the ESG scores derived from the Refinitiv database, using a sample of all those companies listed on the Warsaw Stock Exchange whose disclosure allows for measuring ESG performance (yielding 171 firm-year observations from 43 companies).

Findings

This study’s findings show an improvement of ESG performance following the introduction of the NFRD. The difference-in-differences approach indicates that the improvement is larger for companies that are subject to the legislation when it comes to overall ESG performance, particularly for environmental and social performance. Nonetheless, to the best of the authors’ knowledge, no significant effect is found for performance in the governance dimension.

Originality/value

This study investigates the role of transnational mandatory reporting regulation in the first years of its enactment. The evidence offers insights into the effects of disclosure legislation in the context of an underdeveloped institutional environment.

Details

Meditari Accountancy Research, vol. 31 no. 7
Type: Research Article
ISSN: 2049-372X

Keywords

Article
Publication date: 12 January 2024

Adel Ali Al-Qadasi

Institutional investors are major shareholders in publicly traded firms and play crucial roles in the financial and governance aspects of these firms. Despite their importance…

Abstract

Purpose

Institutional investors are major shareholders in publicly traded firms and play crucial roles in the financial and governance aspects of these firms. Despite their importance, little is known about their role in internal auditing. This study aims to fill this gap by investigating the relationship between institutional investors’ ownership and investment in the internal audit function (IAF).

Design/methodology/approach

The study uses ordinary least squares regressions with two-way cluster-robust standard errors (firm and year) to estimate the relationship between institutional investors’ ownership and investment in IAF for Malaysian listed firms between 2009 and 2020.

Findings

The findings show that companies with higher levels of institutional ownership invest more in IAF, suggesting that institutional investors can effectively monitor managers due to their large holdings. Moreover, both transient and dedicated institutional investors are more likely to invest in IAF.

Originality/value

The results highlight the importance of institutional investors as a significant determinant of investment in IAF, which can aid regulators and managers in understanding the institutional investors’ role in governing and optimizing the efficient use of a firm’s resources. The findings also provide insight into institutional investors’ behavior regarding monitoring systems, which may inspire regulators and policymakers to consider increasing institutional investors’ participation to enhance governance structures.

Details

Managerial Auditing Journal, vol. 39 no. 2
Type: Research Article
ISSN: 0268-6902

Keywords

Article
Publication date: 5 April 2023

Riya Singla, Madhumita Chakraborty and Vivek Singh

The study examines the effect of increased Economic Policy uncertainty on analyst optimism in the Indian market. The study also explores whether the SEBI Research Analyst…

Abstract

Purpose

The study examines the effect of increased Economic Policy uncertainty on analyst optimism in the Indian market. The study also explores whether the SEBI Research Analyst Regulation, 2014, has effectively contained the optimistic nature of analysts.

Design/methodology/approach

The study is based on firms in the Indian market. The sample period is 2003–2020. It runs a linear panel regression to measure the impact of Economic Policy uncertainty on the optimism level of analysts' forecasts and recommendations, controlling for firm fixed effects. Further, the impact of the SEBI Research Analyst Regulation, 2014, has been assessed with the help of the difference-in-difference approach.

Findings

The Economic Policy uncertainty is significantly and positively related to the analyst optimism, reflected in the forecast bias and recommendation in the Indian context. The experience of analysts and the age of the firm positively drive optimism. However, introducing the Research Analyst Regulation by SEBI led to a decline in analyst optimism. The regulation decoupled the analysts' compensation from brokerage service transactions. Thus, the results suggest that the regulation has effectively curbed the incentive to produce optimistic output.

Originality/value

This is the first study in the Indian market to assess the impact of uncertainty on analyst output. It also investigates the effectiveness of the first analyst-specific regulation in India, i.e. The Research Analyst Regulation, 2014.

Details

Managerial Finance, vol. 49 no. 10
Type: Research Article
ISSN: 0307-4358

Keywords

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