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1 – 10 of 879Paola Ramassa and Giulia Leoni
This paper explores how the International Accounting Standards Board (IASB) has dealt with the emerging issue of accounting for cryptocurrencies by investigating its constituents'…
Abstract
Purpose
This paper explores how the International Accounting Standards Board (IASB) has dealt with the emerging issue of accounting for cryptocurrencies by investigating its constituents' expectations and the motivations underlying its regulatory response.
Design/methodology/approach
The theoretical lens of regulatory space is used to analyse the four-year debate around cryptocurrency holdings and informs the extensive thematic analysis of public documents, meetings recordings and comment letters on the topic.
Findings
Facing national standard setters' initiatives to regulate accounting for cryptocurrency, the IASB defended its position in the regulatory space through an agenda decision based on ewct 2xisting standards, which was finalised by the International Financial Reporting Standards Interpretation Committee (IFRS IC) despite criticism from constituents and Board members.
Research limitations/implications
The paper provides insights into the IASB approach to a regulatory vacuum regarding a new class of items, which derive from a new and rapidly-evolving technology. Disruptive technology impacts the contested arena of accounting regulation, in which the constituents ask for new solutions and the IASB tries to resist such pressures, while defending its position.
Practical implications
The paper sheds light on the growing importance of agenda decisions in the IFRS environment and on the limits of the IASB long regulatory process in the circumstance of emerging accounting issues deriving from rapidly-evolving technology.
Originality/value
This investigation is timely and relevant as it considers the regulatory issues arising from disruptive technological innovations (i.e. cryptocurrency), shedding light on the limits of regulatory processes in times of technological change.
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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…
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.
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Marco Botta and Luca Vittorio Angelo Colombo
It is widely believed that deviating from the “one share-one vote” principle leads to corporate inefficiencies. To measure the market appraisal of this potential inefficiency…
Abstract
Purpose
It is widely believed that deviating from the “one share-one vote” principle leads to corporate inefficiencies. To measure the market appraisal of this potential inefficiency, this study aims to analyse the market reaction to a change from the “one head-one vote” to the “one share-one vote” mechanism by means of a quasi-natural experiment: a 2015 Italian reform forcing all listed cooperative banks to transform into joint-stock companies.
Design/methodology/approach
To investigate the market reaction around the regulatory change, this study uses both a traditional event study and a novel methodology based on the synthetic control method as well as on Bayesian statistical techniques.
Findings
This study estimates the market valuation of the effects of the governance change around the event date being equal to a cumulative average increase in market value of about 14 per cent using an event study methodology, and of about 13 per cent using Bayesian techniques.
Originality/value
This study provides evidence on the fact that the voting mechanism significantly affects the market values of companies. The study also introduces a novel statistical technique that can be extremely useful in analysing single-firm event studies.
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Nadia Albu, Cătălin Nicolae Albu, Oana Apostol and Charles H. Cho
Mobilizing a theoretical framework combining institutional logics and “imprinting” lenses, this paper provides an in-depth contextualized analysis of how historical imprints…
Abstract
Purpose
Mobilizing a theoretical framework combining institutional logics and “imprinting” lenses, this paper provides an in-depth contextualized analysis of how historical imprints affect social and environmental reporting (SER) practices in Romania, a post-communist country in Eastern Europe.
Design/methodology/approach
The authors conduct a qualitative field study with a diverse dataset including regulations, publicly available reports and interviews with multiple actors involved in the SER field in Romania. The authors follow a reflexive approach in constructing the narratives by mobilizing their personal experience and understanding of the field to analyze the rich empirical material.
Findings
The authors identify a blend of logics that combine local and Western conceptualizations of business responsibilities and explain how the transition from a communist ideology to the free market economy affected SER practices in Romania. The authors also highlight four major imprints and document their longitudinal development, evidencing three main patterns: persistence, transformation and decay. The authors find that the deep connections that form between logics and imprints explain the cohabitation of logics rather than their straight replacement.
Originality/value
The paper contributes by evidencing the role of imprints' dynamics in the institutionalization of SER logics. The authors claim that the persistence (decay) of imprints from a former regime such as communism hinders (facilitates) the institutionalization of Western SER logics. Transformation instead has more uncertain effects. The pattern that an imprint takes hinges upon its usefulness for business interests.
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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.
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This paper aims to measure investors' perception of the rights issue announcement of publicly listed companies in five stock markets of Islamic countries. Then, these firms are…
Abstract
Purpose
This paper aims to measure investors' perception of the rights issue announcement of publicly listed companies in five stock markets of Islamic countries. Then, these firms are grouped according to their debt level to examine whether abnormal returns are different from those that are highly leveraged. Moreover, Sharīʿah compatibility of firms is checked to understand if return anomaly shows different behaviour around rights issue announcement days.
Design/methodology/approach
The analysis period includes the years 2010–2019, which includes 362 rights issue announcements. The event study methodology is applied to measure the level of impact that is triggered by the rights issue announcements. Hereafter, one-way ANOVA test is performed to identify whether there exists a difference among the sample groups according to their debt level.
Findings
Findings suggest that rights issue announcements cause −3.90% fall in share prices on average for the whole sample. However, negative abnormal return is found significant only in Egypt and Turkey. Individual regression analysis results suggest that an increase in debt level worsens the return anomaly only in Egypt. This refers that the rights issue announcement is perceived as less favourable for highly leveraged companies compared to others in this country. Finally, Sharīʿah-compliant companies show better performance compared to non-compliant counterparts around the event dates.
Originality/value
This paper is novel in evaluating market reaction during rights issue announcements in multiple Islamic countries. Also, to the best of the authors’ knowledge, this study is the first attempt to compare return behaviour of Sharīʿah-compliant and non-compliant firms around the rights issue announcements.
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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.
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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…
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.
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