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This study aims to analyze the relationship between companies’ business ethics (BE) and corporate social responsibility (CSR), with particular reference to policies toward employees, with the aim of understanding if and how the two concepts are linked and to foster a better management of the company-employee relationship through BE and CSR policies.

Through a content analysis, the authors study three issues related to employees disclosed in Code of Ethics (CE) and CSR report of a sample of Italian companies. Next, using a multivariate regression model, the authors examine the relation between the BE and CSR initiatives, related to employees.

The findings show that CE and CSR initiatives are negatively related. They are distinct concepts, but since the authors find that they are connected, they must also be considered in terms of their mutual dependence. To standardize practices toward employees in a code may induce the need to establish additional corporate social responsibility initiatives that elicit legitimate stakeholder satisfaction.

The analysis focuses on employees, whereas several other CSR aspects that can be explored. Furthermore, additional investigation (through questionnaires or interviews) could deepen this analysis. Furthermore, it might be interesting to consider different countries or more variables, such as cultural differences or different regulations.

The results of this research reveal that BE and CSR initiatives require precise and personalized observations to be properly understood; however, as they are linked, they must also be studied in their mutual interdependencies; this can be very useful to define governance bodies and organizational procedures devoted to BE and CSR issues.

This research provides a tool for evaluating and monitoring CSR and BE principles and can be adapted to many business contexts and refer to different stakeholders.

The existing literature on BE and CSR presents opportunities for further study, as these concepts are often studied without insights into their mutual impacts.

The purpose of this paper is to analyze the effects of financial restatements (FRs) on the likelihood of the top management team (TMT) dismissal. It investigates the effects of types of FRs [corrective note and reissuance of financial statement (RFS)], of FR severity and of FR related to international financial reporting standards (IFRSs) easy or difficult-to-estimate.

The authors hand-collect: data about 96 FRs from the Italian public oversight board documents; chief executive officer (CEO) name, chairman name, year of the financial statement under investigation, total assets and operating income, from their financial statement. The authors use multivariate regression to test the effects of FRs on the probability of TMT dismissal.

The authors find that the RFS leads to a higher likelihood of chairman dismissal. A greater magnitude of misrepresentation on income statements, and FRs, which decrease net income, increase the likelihood of CEO dismissal. Difficult-to-estimate IFRSs increases the likelihood of CEO dismissal.

FRs are significant determinants of the CEO/chairman dismissal. The authors show that FRs directly involving shareholders (RFS) have negative consequences on the chairman of the board of directors, while the CEO is more affected by FRs that involve technical factors (FR severity or financial statement associated with difficult-to-estimate IFRSs).

This study aims to test whether the introduction of a gender quota impacts functioning of boards of directors and internal committees thanks to female capacity in effort norms, cognitive conflicts and use of skills.

This paper uses a difference-in-differences method to trace the staggered mandatory adoption of gender quotas on boards on Italian listed firms, representing the regulative institution pillar of institutional theory.

This paper find that mandatory adopter firms have more frequent internal committee meetings and less frequent board of directors’ meetings after the introduction of the law. This confirms that the regulation re-prioritizes work in internal committees, thanks to women effort, capacity to resolution and use of skills.

This research provides empirical evidence on female contribution and on the impact that a specific mandatory regulation, as regulative institutional pillar, can have on board organization, showing how gender characteristics influence board functioning in terms of meetings.

Prior literature shows that income shifting is widely performed by multinational groups, but no research as yet has studied alignment between controlling and minority interests on tax avoidance in multinational groups with high ownership concentration. This study aims to analyze the effect of high ownership concentration on cross-jurisdictional tax-motivated income shifting.

To test the hypotheses, this study focuses on European multinational groups. Data are collected on European parent firms and each subsidiary. The model considers the natural logarithm of profit before tax and tax incentive.

Findings show that subsidiaries shift income for tax avoidance purposes. The alignment of shareholders’ interests and ownership concentration leads to higher levels of tax avoidance through subsidiaries’ infra-group transactions. High ownership concentration decreases the influence of minority interests and allows parent company shareholders to choose a tax avoidance strategy more freely.

The results suggest that taxation levels need to be harmonized to reduce the incentive for tax avoidance and the incentive of governments to reduce their statutory tax rate, to shift profits inwards and reduce outward flow. Without international coordination, this approach may lead to the unevenness of legislative frameworks around the world, and bring significant disadvantages for some countries, influencing economic growth and business development.

This study extends prior findings showing that tax-motivated income shifting as a method of tax avoidance in European multinational groups is stronger in groups with high levels of ownership concentration. This means that managers have the incentive to shift income between subsidiaries for tax and ownership benefits in favor of the parent company’s shareholders and against minority interests.

This paper aims to analyse the quality of Code of Ethics from the point of view of employees. In particular, the research aims to investigate which are the companies’ characteristics that influence the publication of a Code of Ethics and the Code of Ethics Quality from the employee perspective.

The authors use Italian listed companies and perform a manual content analysis on their Code of Ethics based on keywords related to the stakeholder employees. The authors perform regression models to investigate the determinants, using financial reporting data and companies’ information (i.e. industry).

The findings show that Code of Ethics are developed among large firms. A healthy and safe environment and a clear leadership are developed by firms with high grow rates. Equal employment opportunities and competent leadership are developed by firms with low financial distress. The need of effective communication for consensus seems more visible in Public Administration. Private sectors pay more attention to competent leadership, while firms in Trade take care on equal opportunities for employees.

At present, much of the codes of ethics’ research are focussed on the content and the effectiveness of codes of ethics, on the reasons, on the benefits and limitations of this tool, but few studies investigate the quality of codes of ethics and, even fewer the specific stakeholder employees. This study aims to improve the debate related to the elements affecting quality in codes of ethics, with particular attention to the rules that guide the relationship between companies and their employees.

Following the contingency perspective, this paper aims to examine if a good corporate governance structure is able to reduce earnings management made through related party transactions. The authors expect that a high-quality corporate governance influences private benefit acquisition and reduces the positive association between related party transactions and earnings management.

A two-stage least squares instrumental variable approach is used to further address endogeneity concerns in this study. The model is organized into three parts: the construction of the corporate governance indicator, the first stage regression to compute the predicted corporate governance indicator and the second stage regression (ordinary least squares multivariate regressions) to analyze the relationship between related party transactions and earnings management. The analysis focuses on a sample of Italian listed companies over the period 2007-2012.

The study finds that the interaction between sales-related party transactions and corporate governance is negatively associated with abnormal accruals, signaling that corporate governance quality reduces the positive association between sales-related party transactions and earnings management, consistently with the contingency perspective.

The research contributes to literature by empirically testing the assumption of contingency perspective. In particular, the results provide new insights to the academic community, underlying that good corporate governance mechanism helps to reduce earnings management behavior through related party transactions.

Although tax-motivated income shifting has been widely explored, no studies have as yet analyzed the association between ownership structure and management decisions about income shifting. The ownership structure of multinational groups is characterized by different levels of minority interests, and our aim is to establish whether income shifting is explained by the aim of expropriation of minorities, as well as taxation avoidance.

We collect data on a sample of European parent companies located in five countries and their foreign subsidiaries, and run a multivariate regression based on the Huizinga and Laeven (2008) model.

Our results support the idea of minority expropriation, finding evidence of ownership-motivated income shifting. We also find that the level of minority protection affects ownership-motivated income shifting, and that, when both are present, expropriation is statistically significant.

Although the study looks at a wide range of subsidiaries, a limitation may be that it examines only firms having parent companies in five European countries. Further research would overcome this limitation and extend the literature and take into account other income-shifting contextual variables. Our results may lead regulators to pay more attention to the protection of minority interests.

This research offers insights to companies and investors, and should help them to make better-informed decisions and evaluate the best contexts for investments.

This study enriches the literature on income shifting by revealing that it can be caused by factors other than the desire to avoid taxation. It suggests that ownership structure is crucial.

The purpose of this paper is to examine the factors that are associated with internal auditors’ professional turnover intentions.

The study analyzes data from responses to the Institute of Internal Auditors’ (IIA) (2015) Common Body of Knowledge global survey and uses a multivariate approach to identify factors that influence internal auditor turnover intentions.

Results show that internal auditor turnover intentions are negatively associated with an academic background in accounting, possessing internal audit professional certification, and having access to more training opportunities. Turnover intentions are positively associated with organizational-professional conflict, restricted access to documents and personnel, and the existence of a program of using the internal audit function as management training ground. Differences by IIA global region highlight the diversity in the turnover challenges that face the professional globally.

Results from this study are important because they bring attention to issues that potentially lead to internal auditors leaving the profession. This can help the profession and organizations take measures to motivate internal auditors to remain in the profession and alleviate the current staffing challenges faced by the profession.

This study aims to examine whether national industry expertise in Italy is more dominant than local expertise. Prior studies from Australia, USA and UK show that audit fees for industry experts are priced at a higher premium at the local level than the national level. These countries have voluntary audit firm rotation, while Italy has mandatory audit firm rotation (MAFR). The authors predict that Italy has a stronger national than local level of industry expertise, to better retain and transfer industry expertise.

The authors compare audit fee premiums of national industry experts to local levels, using quantitative (multivariate tests) and qualitative (interviews) methodology.

Using hand-collected audit fees, the authors find that the audit fee premium for industry expertise is greater at the national level than the local level. The authors find corroborating results with audit hours. To provide further support, the authors conduct analysis for a neighboring country that does not have audit firm rotation. Using hand-collected data from Germany, the authors find that audit fee premiums from national industry expertise are no different from local industry expertise.

The present study study has theoretical and practical implications, for European Union countries, which recently adopted MAFR and for countries considering adoption in the future.

This paper aims to test the positive relationship between audit quality (AQ) of outsourced information technology controls (ITC) and information technology audit quality (ITAQ).

Factor analysis, ordinary least squares (OLS) regressions and simulations.

Scoping and planning phases of the audit cycle account for about 69 per cent of ITAQ. The AQ of outsourced ITC is strongly and directly related to ITAQ. Improvement of AQ of outsourced ITC may be achieved through evaluation of control design and operating effectiveness by service auditor as well as direct evaluation by the client in service provider location.

Sample size and input items in factor analysis.

Companies and auditors could improve ITAQ through a better organization of the scoping and planning activities; they could also improve the AQ of outsourced ITC using direct evaluation in the service provider location supplemented with service auditor reports. Regulators could refine or change laws and frameworks to take into account the factors of ITAQ and the methodology of evaluation of outsourced ITC.

Private data collected by questionnaire. The measures of ITAQ and the OLS model could be tested in future research, in countries with different frameworks and regulations related to AQ, different weight of outsourced information technology and other characteristics related to clients, service providers and service auditors.