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This study proposes a novel measure for management’s horizon (short-termism or myopia vs long-termism or hyperopia) derived from easily obtainable firm-level accounting and stock market performance data. The authors use the measure to explore the impact of managements’ horizon on firms’ investment efficiency.

The authors rely on two commonly used but uncorrelated measures of management performance: accounting performance (return on capital employed, ROCE) and stock market performance (average abnormal return, AAR). The authors combine these measures to develop a multidimensional framework for performance, which classifies firms into four groups: efficient (high accounting and high market performance), poor (low accounting and low market performance), myopic (high accounting and low market performance) and hyperopic (low accounting and high market performance). The authors validate this framework and deploy it to explore the relationship between horizon and firms’ investment efficiency.

In validation tests, the authors show that management myopia (hyperopia) explains firms’ decision to cut (grow) research and development investments. Further, as expected, myopic (hyperopic) firms are associated with significantly more (less) accrual and real earnings management. The empirical tests on the link between horizon and investment efficiency suggest that myopic managers cut new investments while their hyperopic counterparts grow the same. Ultimately, the authors find that myopia (hyperopia) exacerbates(mitigates) the over-investment of free cash flow problem.

The authors introduce a framework for assessing management’s horizon using easily obtainable measures of performance. The framework explains inconsistencies in prior empirical research using different measures of performance (accounting versus market). The authors demonstrate its utility by showing that the measure explains decisions around research and development investment, earnings management and firm investments.

The authors analyze the association between the functional background of the compensation committee chair and CEO compensation. The analysis is motivated by the continuing debate about the reasonableness of executive pay patterns and the growing emphasis on the role of compensation committees.

The authors define three expert categories—accounting, finance, and generalist—and collect data on the compensation committee (CC) chairs of the S&P 500 firms from 2008 to 2018. The authors run an ordinary least square model and regress CEO total and cash compensation on the three expert categories.

The authors find that firms in which the CC chair has expertise in accounting, finance, and general business favor performance measures that are more aligned with accounting, finance, and general business, respectively. There is little evidence that CC chairs who are CEOs of other firms endorse more generous pay for the host CEO; the authors find some evidence that CC chairs tenure relative to the host CEO's is negatively associated with the level of the CEO's pay.

This study suggests that firms and regulators should consider the background of the compensation committee chair to understand the variations in top executive.

Companies desiring to link executive compensation to particular areas of strategy must also consider matching the functional background of the compensation committee chair with the target strategy areas. From regulatory standpoint, requiring compensation committees to operate independent of inside directors can reduce attempts by inside directors to skim the process, but a failure to also consider the impact of compensation committees' discretion over the pay-setting process can distort the executives' pay-performance relation.

This is the first study to examine the effects of the functional background of the compensation committee chair on CEO compensation.

This study uses a meta-analysis approach to analyse the impact of applying corporate green accounting practices as vital sustainable development tools on firm performance. This study aims to examine the moderating effects of country-specific variables and characteristics on the association between corporate green accounting and firm performance.

Three databases were used for a meta-analysis of 68 independent studies involving 19,625 subjects conducted over 25 years from 1996 to 2020.

The results show that corporate green accounting positively affects firm performance, but country-specific variables do not moderate this association. The positive association between corporate green accounting and firm performance was enhanced when it was measured in terms of environmental costs. Subgroup analyses revealed that study characteristics are significant source of heterogeneity in the corporate green accounting indicators-firm performance association.

The findings suggest that firms should strategise to integrate environmental costs into their respective financial accounting frameworks, which would help managers justify the contribution of their firms towards environmental protection.

Accessing accurate and timely information on corporate environmental functioning can assist national policymakers in framing appropriate legislation on environmental protection and sustainable development.

Although meta-analysis has been used previously in accounting research (Guthrie and Murthy, 2009; Alcouffe et al., 2019), to the best of the authors’ knowledge, this is the first study to use a meta-analytical technique to examine the impact of corporate green accounting on firm performance.

This study explores, first, the performance effect (accounting- and market-based performance) of intellectual capital (IC), measured using the value-added intellectual coefficient (VAIC) and its modified version (MVAIC), on Islamic and conventional listed banks in Gulf Cooperation Council (GCC) countries and, second, whether Islamic banks outperform conventional banks in utilising IC.

Using resource-based view theory and literature reviews, regression analyses are conducted on data for the period 2012–2019 on 26 Islamic and 42 conventional banks. For hypothesis testing, the generalised method of moments panel data regression analysis is applied after addressing endogeneity issues.

Results, after controlling for corporate governance, indicate that the performance effects of IC (VAIC and MVAIC) on both bank types largely converge and Islamic banks do not outperform conventional banks in IC use. IC has a stronger effect on accounting performance measures for conventional banks than for Islamic banks, but IC has some effect on market performance measures for Islamic banks alone. Corporate governance variables do not play a significant role in the presence of VAIC and MVAIC although there are differences in corporate governance between the two bank types.

This study bridges the gap in GCC banking sector literature on the association between IC efficiency and performance measures of Islamic and conventional banks, from a comparative perspective. It enhances understanding, about the IC–financial performance nexus, of policymakers, regulators, bank managers and other stakeholders interested in the influence of different business models, financing/investment methods and governance structure on the performance of both bank types.

In this chapter, we perform more detailed analyses and present the distribution characteristics and risk-return relationships of accounting-based financial returns (ROA) across different industry contexts and between periods with different economic conditions. We first display the frequency diagrams of the return measure (ROA) and its two components, net income and total assets, that show entirely different contours in the density graphs that must be reconciled. This is partially accomplished by analyzing the skewness, kurtosis, cross-sectional, and longitudinal risk-return characteristics of each of the three variables. The analyses further considers potential effects of accounting manipulation, and different organizational and executive traits, that identifies significant effects on the accounting-based return measures. We find extremely left-skewed return distributions with high negative correlations between the average return and risk measures, which reproduces the “Bowman paradox” as originally conceived. The same analysis is performed on net income and operating cash flows, the latter being less susceptible to accounting manipulation, which should display similar effects even though these performance distributions show positive skewness. We find negative but insignificant cross-sectional risk-return relations that nevertheless reappear in analyses performed within the specific industry contexts. The study further uncovers effects from prevailing economic conditions where left-skewness and kurtosis as well as negative risk-return correlations are much more significant during periods of high economic growth and business expansion where competition is more pronounced.

This study aims to explore the intelligibility of communication with stakeholders as a result of accrual accounting adoption. It focuses on changes in the use of visual forms and the readability of text that occurred immediately after the adoption of accrual accounting in performance reports of Italian public universities.

The authors collect the stakeholder section of performance reports published before and after accrual accounting adoption. Then, the authors use manual and computer-assisted textual analysis. Finally, the authors explore the data using principal component analysis and qualitative comparative analysis.

This study demonstrates that switching from cash to accrual accounting provokes immediate changes in communication patterns. It confirms the significant reduction of readability and increase in visual forms after accruals accounting adoption. The results indicate that smaller universities especially put effort into increasing intelligibility while implementing a more complex accounting system. This study also finds a relation between the change in readability and the change in visual forms that are complementary, with the exception of several very large universities.

The findings underline the possibility of neutralising the adverse effects of accounting reform associated with its complexity and difficulties in understanding by the use of visual forms and attention to the document’s readability.

This paper adds a new dimension to the study of public sector accounting from the external stakeholder perspective. It provides further insight into the link between accrual accounting adoption and readability, together with the use of visual forms by universities.

This study investigates the impact of green supply chain management (GSCM) practices on environmental performance in firms operating in the discretionary sector in the G20 countries. The sample covers 749 firms for the period 2010–2020.

This study combines qualitative and quantitative data to examine the impact of the implementation of GSCM on accounting performance measured by the operating margin (OM) and return on assets (ROA). The authors also moderate the effects of Six Sigma and quality management (QM) and ISO 9000 and control for firm variables and COVID 19.

Using a panel data regression and structural equation modeling (SEM), results indicate that discretionary firms with internal solid GSCM practices combined with external environmental monitoring of suppliers are likely to outperform their peers in environmental issues. Using hierarchical regression, results indicate that both ISO 9000 and S&QM have moderating effects at some level of performance. Furthermore, environmental performance is positively correlated with accounting performance. This study contributes to the literature by addressing the impact of GSCM and the importance of reinforcing green and social regulations to protect the planet.

The paper is one of the first to measure GSCM triple components and account for COVID-19 in the context of discretionary companies and G20 countries. It highlights the impact of green initiatives to cope with major disruptions and decrease pollution and environmental disasters.

This paper aims to consider the relevance of asset impairments when evaluating stewardship by management.

This paper considers association of earnings (including and excluding asset impairments) with contemporaneous stock returns which are used as a measure of management performance and demonstration of stewardship.

Evidence is provided of earnings including asset impairments (an accounting measure of current measure firm performance) having a higher explanatory power for contemporaneous stock returns (an objective evaluation of current period firm performance) than earnings exclusive of asset impairments. Consistent with this, recognized asset impairments are significantly associated with contemporaneous stock returns. These results occur across firm years generally, as well as for firm years exhibiting indicators of impairment and firm years recognizing asset impairments.

This paper adds to the literature providing evidence of asset impairments not being recognised on a timely basis. Additionally, challenges are identified in evaluating the relevance of accounting information for so-called growth firms.

These findings support continued recognition of asset impairments in the Statement of Profit or Loss if stewardship is accepted as an objective for financial reporting. It also suggests issues with the recognition of asset impairments that might be addressed by enhanced disclosure.

This paper is distinctive in that it considers the relevance of accounting information for evaluating stewardship, as distinct from decision-making. It also considers alternate measure of performance (earnings including and excluding asset impairments) for all firms rather than only those disclosing an alternate measure (i.e. a fair horse race)

The purpose of this study is to investigate the effect of politically connected directors (PCDs), media coverage and their interaction on firm performance in an emerging market economy (UAE).

This study relies on the agency theory and the resource dependency theory and uses a panel data set of a sample of non-financial firms listed in the UAE stock market from 2009 to 2016. Data were analyzed using fixed-effects regression. Instrumental variable regression was used to address potential endogeneity.

PCDs and media are positively associated with firm performance (ROE and Tobin’s q). Media moderates the PCDs–performance relationship, as the interaction between PCDs and media coverage is negatively associated with firm performance. Under growing media attention, reputational concerns prevent PCDs from using their connections to gain particular advantages to their firms to avoid damaging their image.

Regulators need to acknowledge and define the roles of PCDs and media in business governance.

To the best of authors’ knowledge, this study is the first empirical examination testing the effect of the interplay between PCDs and media on firm performance in an emerging market economy such as UAE.

Existing performance assessment frameworks, such as the Sustainable Development Goals (SDGs), struggle to incorporate diverse voices and representations of heterogeneous contexts. Cities, in particular, present a challenging context for sustainability performance assessment as they pursue new forms of governance based on the multiplicity of actors and inter-organisational collaboration. This study explores how sustainability performance accounts are created at the urban level within collaborative forms of governance and amidst the plethora of available devices for performance assessment.

This study adopts a case study approach. Qualitative methods are mobilised to study a large European project focused on the urban transition to a circular economy in six participating cities. The construction of sustainability performance accounts is studied via the Actor-Network Theory lens.

The study highlights that when it comes to sustainability assessment in city initiatives, existing performance assessment devices are adapted and modified to fit local needs and other sources of performance information are spontaneously mobilised to address the different dimensions of sustainability.

This study contributes to the public sector accounting literature by explaining the process of modifying existing devices for performance assessment to allow for the co-creation of accounts and by illuminating the spontaneous way in which performance information is generated and combined.