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Article
Publication date: 17 September 2021

Deborah Yvonne Nagel, Stephan Fuhrmann and Thomas W. Guenther

The usefulness of risk disclosures (RDs) to support equity investors’ investment decisions is highly discussed. As prior research criticizes the extensive aggregation of…

Abstract

Purpose

The usefulness of risk disclosures (RDs) to support equity investors’ investment decisions is highly discussed. As prior research criticizes the extensive aggregation of risk information in existing empirical research, this paper aims to provide an attempt to identify disaggregated risk information associated with cumulative abnormal stock returns (CARs).

Design/methodology/approach

The sample consists of 2,558 RDs of companies listed in the S&P 500 index. The RDs were filed within 10 K filings between 2011 and 2017. First, this study automatically extracted 35,685 key phrases that occurred in a maximum of 1.5% of the RDs. Second, this study performed stepwise regressions of these key phrases and identified 67 (78) key phrases that show positive (negative) associations with CARs.

Findings

The paper finds that investors seem to value most the more common key phrases just below the 1.5% rarest key phrase threshold and business-related key phrases from RDs. Furthermore, investors seem to perceive key phrases that contain words indicating uncertainty (impacts) as a negative (positive) rather than a positive (negative) signal.

Research limitations/implications

The research approach faces limitations mainly due to the selection of the included key phrases, the focus on CARs and the methodological choice of the stepwise regression analysis.

Originality/value

The study reveals the potential for companies to increase the information value of their RDs for equity investors by providing tailored information within RDs instead of universal phrases. In addition, the research indicates that the tailored RDs encouraged by the SEC contain relevant information for investors. Furthermore, the results may guide the attention of equity investors to relevant text passages whose deeper analysis might be useful with regard to investors’ capital market decisions.

Details

Journal of Accounting & Organizational Change, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1832-5912

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Article
Publication date: 30 September 2019

Michael Grassmann, Stephan Fuhrmann and Thomas W. Guenther

Integrated reporting (IR) aims to provide disclosures of the connectivity of non-financial and financial value creation aspects. These disclosures are defined as the…

Abstract

Purpose

Integrated reporting (IR) aims to provide disclosures of the connectivity of non-financial and financial value creation aspects. These disclosures are defined as the disclosed connectivity of the capitals resulting from integrated thinking. This paper aims to investigate the extent of disclosed connectivity of the capitals in integrated reports and its underlying managerial discretion by drawing on economic-based theories.

Design/methodology/approach

Regression analyses are applied to examine the associations between economic firm-level characteristics and the extent of disclosed connectivity of the capitals. The analyses are based on a content analysis of 169 integrated reports disclosed in 2013 and 2014 by Forbes Global 2000 companies.

Findings

This paper finds high heterogeneity in the extent of disclosed connectivity of the capitals in current IR practice. This heterogeneity is related to drivers arising from economic-based theories. Firms’ non-financial and financial performance and the importance of strategic shareholders and debt providers are positively associated with the extent of disclosed connectivity of the capitals. The complexity of the business model and a highly competitive environment are negatively associated with the extent of disclosed connectivity of the capitals.

Research limitations/implications

This paper extends qualitative IR studies on the disclosed connectivity of the capitals by quantitative results from a content analysis for a cross-sectional and global sample. Additionally, this study adds to prior IR literature on the drivers of the binary decision to disclose an integrated report by focusing on the extent of disclosed connectivity of the capitals.

Practical implications

For report preparers, users and standard setters, the results reveal that perceived cost-benefit considerations (signaling vs. direct and proprietary costs) may explain managerial discretion regarding the connectivity of the capitals within integrated reports.

Social implications

This paper examines integrated reports, which are intended to inform providers of financial capital and other stakeholders about the connectivity of the six capitals of the IR framework.

Originality/value

This paper develops a metric disclosure measure of the extent of disclosed connectivity of the capitals. It provides initial evidence of how the IR framework’s focus on this key characteristic is realized in disclosure practice. Concerns about competitive disadvantages and preparation costs limit this key characteristic of integrated reports.

Details

Sustainability Accounting, Management and Policy Journal, vol. 10 no. 5
Type: Research Article
ISSN: 2040-8021

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Book part
Publication date: 14 May 2018

Edeltraud Guenther, Timo Busch, Jan Endrikat, Thomas Guenther and Marc Orlitzky

The purpose of this literature review is to reorient empirical research on the causal links between corporate ecological sustainability (CES) and corporate financial…

Abstract

The purpose of this literature review is to reorient empirical research on the causal links between corporate ecological sustainability (CES) and corporate financial performance (CFP). Toward this end, we summarize the findings of four meta-analyses (conducted between 2012 and 2016), which indicate that there is, on average, a small positive association between CES and CFP. In addition, these empirical associations seem to be contingent on the firm’s strategic approach with regard to ecological sustainability (e.g., proactive vs reactive approach) and on the operationalization of both constructs. We conclude that future research may benefit from an even more explicit, analytic shift to the circumstances under which it pays for firms to go green. The main research limitations we point out are model misspecifications, endogeneity, and problems in the measurement of both CES and CFP.

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Book part
Publication date: 28 September 2020

David L. Gray

Purpose – This article examines the operating lease cost stickiness characteristics exhibited by retail firms.Methodology/approachAnderson, Banker, and Janakiraman (2003

Abstract

Purpose – This article examines the operating lease cost stickiness characteristics exhibited by retail firms.

Methodology/approachAnderson, Banker, and Janakiraman (2003) laid important groundwork for the study of asymmetric cost behavior or cost stickiness. The authors found that a firm’s selling, general, and administrative costs (SG&A) costs increase more with a sales increase than those expenses decrease with an equivalent sales decline. Their findings provided avenues for many studies with differing focal variables; however, extant research has not explored the degree of cost stickiness associated with operating lease expenses. Recognizing the nature and magnitude of operating leases and the competitive and changing environment for retailers, this study adapts Anderson et al.’s (2003) model to provide insights into operating lease stickiness. The study uses archival financial data from 1997 through 2016 for specialty retail firms in testing the lease cost stickiness hypotheses.

Findings – The results of this study supported the hypotheses that operating lease expenses exhibit stickiness behavior and are relatively stickier than future lease commitments for retail firms.

Originality/value – By focusing on retail firms and related lease expenses, this study provides insights into the increasingly competitive retailer environment. This article’s findings will enhance understanding of how specialty retail firms’ managers react to reduced revenues. Finally, given recent authoritative pronouncements affecting accounting for leases and the significance of leasing transactions, research providing insights into cost behavior and managerial actions stands to make an important contribution to literature and practice.

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Article
Publication date: 18 June 2019

Tze San Ong, Hussain Bakhsh Magsi and Thomas F. Burgess

The purpose of this paper is to analyze the influence of organizational culture (OC) on a firm’s environmental performance (EP) via the mediating variable of environmental…

Abstract

Purpose

The purpose of this paper is to analyze the influence of organizational culture (OC) on a firm’s environmental performance (EP) via the mediating variable of environmental management control systems (EMCS).

Design/methodology/approach

Data were collected from 314 Pakistani manufacturing firms via the questionnaire survey, and the structural equation modeling was used to test the relationships.

Findings

The stable and flexible values of OC affect the effectiveness of formal and informal EMCS. Informal EMCS mediates the relationship between flexible values and EP, whereas formal EMCS mediates the stable values and EP. Overall, the data reveal that the integration of environmental culture within an organization’s culture and control systems leads to improve EP.

Originality/value

The study is one of the first, to the author’s knowledge, that links OC, EMCS, and EP in a developing economy, in this case Pakistan.

Details

International Journal of Productivity and Performance Management, vol. 68 no. 7
Type: Research Article
ISSN: 1741-0401

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Article
Publication date: 1 May 2019

Lamia Laguir, Issam Laguir and Emmanuel Tchemeni

The purpose of this paper is to take into account Simons’ (1994) formal levers of control framework and more informal processes to examine how organizations implement and…

Abstract

Purpose

The purpose of this paper is to take into account Simons’ (1994) formal levers of control framework and more informal processes to examine how organizations implement and manage corporate social responsibility (CSR) activities through management control systems (MCSs).

Design/methodology/approach

A multiple-case study was conducted in ten large French organizations. Qualitative data were collected during in-depth semi-structured interviews with the managers who were best informed on CSR practices and MCSs. The authors then performed within-case and cross-case analysis.

Findings

The study shows that organizations use different MCSs to manage CSR activities directed toward their salient stakeholders – that is, employees, customers, suppliers and community. Specifically, the authors found that social MCSs are used to communicate CSR values, manage risk, evaluate CSR activities, and identify opportunities and threats. In addition, the use of MCSs to implement CSR activities is mainly driven by the need to satisfy salient stakeholder demands, manage legitimacy and reputation issues, and meet top management expectations and enhance their commitment. Last, the use of social MCSs is hindered by a lack of clear strategic CSR objectives and action plans, a lack of global standards and measurement processes for CSR, and a lack of time and financial resources.

Originality/value

The study addresses recent calls in the literature for research into the ways formal and informal control systems are used to implement CSR activities and provides insight that may stimulate further research.

Details

Accounting, Auditing & Accountability Journal, vol. 32 no. 2
Type: Research Article
ISSN: 0951-3574

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Article
Publication date: 1 January 2004

Hervé Stolowy and Gaétan Breton

Accounts manipulation has been the subject of research, discussion and even controversy in several countries including the USA, Canada, the U.K., Australia, Finland and…

Abstract

Accounts manipulation has been the subject of research, discussion and even controversy in several countries including the USA, Canada, the U.K., Australia, Finland and France. The objective of this paper is to provide a comprehensive review of the literature and propose a conceptual framework for accounts manipulation. This framework is based on the possibility of wealth transfer between the different stake‐holders, and in practice, the target of the manipulation appears generally to be the earnings per share and the debt/equity ratio. The paper also describes the different actors involved and their potential gains and losses. We review the literature on the various techniques of accounts manipulation: earnings management, income smoothing, big bath accounting, creative accounting, and window‐dressing. The various definitions of all these, the main motivations behind their application and the research methodologies used are all examined. This study reveals that all the above techniques have common elements, but there are also important differences between them.

Details

Review of Accounting and Finance, vol. 3 no. 1
Type: Research Article
ISSN: 1475-7702

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Book part
Publication date: 19 October 2020

Stephanie Walton and Michael Killey

This study examines the impact of expanded geographical disclosures on nonprofessional investor judgments. Public country-by-country reporting (CBCR) is a way to increase…

Abstract

This study examines the impact of expanded geographical disclosures on nonprofessional investor judgments. Public country-by-country reporting (CBCR) is a way to increase corporate transparency, enhancing tax fairness and accountability (European Commission, 2016). Public disclosure would make large multinational companies share information about profits, taxes paid, and number of employees on a per-country basis. However, it is unclear whether nonprofessional investors would even use CBCR and how they would interpret the information. Adding to the policy debate on whether publicly available country-by-country information will be properly used, this study employs an experimental design to investigate the effect of disclosure availability and content on nonprofessional investor judgments. We find that participants receiving an expanded disclosure are able to more accurately assess the state of the social contract between the organization and society, imposing sanctions if necessary. Exploring CBCR provides timely evidence to regulators, standard setters, and tax fairness campaigners on the impact of expanded geographical disclosures as a means of increasing transparency and improving competitiveness.

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Book part
Publication date: 15 July 2017

Brandon McFadden and Troy G. Schmitz

Deficiency of nutrition is generally referred to as malnutrition; however, malnutrition can refer to both overnutrition and undernutrition. Nutrient availability and…

Abstract

Deficiency of nutrition is generally referred to as malnutrition; however, malnutrition can refer to both overnutrition and undernutrition. Nutrient availability and intake are current challenges for society, and these challenges will only intensify as population continues to grow and resources become more stressed. This chapter examines the need for dietary guidelines to increase nutrition security, describes the history of dietary guidelines in the United States, examines compliance and challenges with compliance of dietary guidelines, and finishes with future implications of dietary guidelines. This study concluded that although the purpose of the United States Department of Agriculture (USDA) Dietary Guidelines is to assist Americans in choosing healthy eating patterns and to alleviate the negative health and economic outcomes associated with malnutrition, consumers typically do not follow the USDA Dietary Guidelines due to their inherent complexities and other factors, such as income and access to food which may affect compliance.

Details

World Agricultural Resources and Food Security
Type: Book
ISBN: 978-1-78714-515-3

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Book part
Publication date: 16 December 2016

Adrienne Henck

Viewing the global movement for inclusive and equitable education through the lenses of the social construction of childhood and world culture theory, this chapter…

Abstract

Viewing the global movement for inclusive and equitable education through the lenses of the social construction of childhood and world culture theory, this chapter explores the normalized cultural conceptions of children and childhood, once situated on the periphery of policy landscapes, that have in recent years become increasingly shared by contemporary global society. I assert that a “global ideology of childhood” reflects a global consensus on the nature and needs of children, underscoring the widely held belief that all children are entitled to similar rights, protections, and childhood experiences. The overarching question addressed by this research is: How are global ideas reproduced and interpreted in national contexts? Through a case study of Nepal’s National Framework of Child-friendly Schools for Quality Education, I examine how the global ideology of childhood is reflected in a national education policy and how multilevel policy actors, and international, national and local non-governmental organizations (I/NGOs) in particular, envision the sustainability of the child-friendly school model – and broader socio-cultural ideas concerning children and childhood – in Nepal. Drawing on interviews with these actors and content analysis of policy documents, this chapter aims to provide a rich, descriptive account of how global culture is appropriated in one national context.

Details

Annual Review of Comparative and International Education 2016
Type: Book
ISBN: 978-1-78635-528-7

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