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Whistleblowers have been credited for uncovering financial scandals in companies globally, including Enron, Olympus Corporation, and WorldCom. Despite increasing support and incentives for whistleblowing, there generally remains reluctance to blow the whistle. Thus, the purpose of this study is to review: (1) the determinants of internal and external whistleblowing on accounting-related misconduct, (2) U.S. whistleblowing legislation on accounting-related misconduct and related research, and (3) the effects of whistleblowing on firms and whistleblowers. Within each area, suggestions for future research are offered.

This study contributes to a growing body of literature on the Paycheck Protection Program (PPP) by examining how lender incentives affected prioritization of large borrowers. In addition, this study separately examines incentives for commercial banks and credit unions during the program.

Using 2020 PPP loan data, the authors create a proxy for lender loan prioritization by comparing the skewness statistics of large and small loan distributions. A regression model is used to examine lender reporting incentives and loan prioritization.

Results show that larger borrowers were prioritized in receiving PPP loans earlier. Lenders with financial reporting concerns and commercial banks favored large borrowers to a greater extent.

This study may inform social planners and regulators about the benefits and costs of delegating emergency funding loan decisions to financial institutions.

The authors believe this paper is the first to examine financial institution reporting incentives in relationship to PPP lending practices. It adds novelty by examining lender incentives, while prior research has focused heavily on the economic consequences of the program and how borrower–lender relationships affected loan practices during the program.

The purpose of this paper is to examine the effects of adoption of the mandatory International Financial Reporting Standards (IFRS) on the cost of equity capital in a unique Korean setting. In Korea, individual financial statements were taken as primary financial statements. Before the adoption of IFRS, consolidated financial statements were taken as supplementary financial statements.

The authors measure the cost of equity using the average estimates from the implied cost of capital models proposed by Claus and Thomas (2001), Gebhardt et al. (2001), Easton (2004) and Ohlson and Juettner-Nauroth (2005), using it as the primary dependent variable. Mandatory IFRS adoption, the independent variable in this study, is assigned a value of 1 for the post-adoption period and 0 otherwise.

Using a sample of listed Korean companies during the period from 2000 to 2013, the authors find evidence of a significant reduction in the cost of equity capital in Korean listed companies after mandatory adoption of the IFRS in 2011, after controlling for a set of market variables.

This study is one of a growing body of literature on the relations between mandatory IFRS adoption and the cost of equity capital (Easley and O’Hara 2004; Covrig et al. 2007; Lambert et al. 2007; Daske et al. 2008). According to the results of this study, increased financial disclosure and enhanced information comparability, along with changes in legal and institutional enforcement, seem to have had a joint effect on the cost of equity capital, leading to a large decrease in expected equity returns.

This article provides an analysis of the economic incentives and financial reporting for Special Purpose Entities (SPEs) over the last four decades. The analysis explains economic factors motivating business use of SPEs and the origins of SPEs in lease accounting and securitization transactions. Related financial reporting standards are identified and discussed, including the historical shift from a traditional control viewpoint to a primary beneficiary viewpoint for financial reporting for consolidation for SPEs (recently renamed Variable Interest Entities (VIEs) in U.S. Financial Accounting Interpretation 46R). The article also includes illustrative journal entries explaining SPE transactions from both the viewpoint of the creating company(s) and the SPE. Actual financial reporting examples and/or journal entries for SPEs created by Bank of America, General Motors Acceptance Corporation, Lucent Technologies and Alza Pharmaceuticals Corporation are also provided.

This paper aims to study the effect of new regulatory requirements on disclosure through a longitudinal study. The empirical setting is offered by the risk reporting in the management commentaries of Italian listed companies. In this setting there is an evolution from a voluntary disclosure environment toward a regulated one, with the gradual introduction of new reporting requirements.

This paper uses the content analysis method to investigate the narrative risk disclosure. Non‐parametric statistics are used to test the hypotheses.

It is found that even when new mandatory disclosure is introduced, managers exploit discretion and do not change their disclosure policy, continuing to withhold relevant information to external users. Before and after the introduction of new regulation, managers' behaviour appears in line with self‐interest to protect themselves from litigation and competitive costs, as well as from possible decreases in the firm's value.

The study provides a longitudinal study, covering changes from a voluntary disclosure environment to a regulated one. The paper provides evidence that the management incentives do not change in the presence of new disclosure regulation.

The purpose of this paper is to investigate the effect of financial factors on firms’ financial and tax reporting decisions. Firms often face the difficulties of accomplishing both financial and reporting goals. The extent to which reporting they put more value depends on the differential weighting of firms’ financial reporting and tax costs. The authors incorporate various financial factors as a source of cross-sectional differences in the weighing of both financial reporting and tax costs.

To examine firms’ decisions when fulfilling both the purposes of financial and tax reporting is difficult, the authors use a large set of firms in Korea, where book-tax conformity is high and aggressive tax shelters are restricted. The authors develop a new measure that can specify firms’ decision making between financial and tax reporting by considering both earnings management and tax avoidance.

The findings show that debt ratio affects firms’ financial and tax reporting decisions non-monotonically depending on the level of the debt ratio. The authors also find that firms with more long-term debt financing are more likely to be aggressive in financial reporting, while firms with higher financing deficit or better access to the capital market are more likely to be aggressive in tax reporting.

Thus, the findings provide more compelling evidence of firms’ decision making between two conflicting strategies, particularly when fulfilling both the purposes of financial and tax reporting is difficult. The authors expect that the results provide practical implications to standard setters, auditors and financial statement users who are interested in the ongoing debate over book-tax tradeoffs.

This paper fulfills an identified need to study how firms’ decision making between two conflicting reporting strategies are affected by the various financial factors, which are closely linked to a firm’s financial reporting and tax costs.

The purpose of this study is to analyse the impact of two different financial reporting models (revenue-expense vs asset-liability) on several earnings attributes.

The analysis compares the earnings attributes of non-financial private firms using the Italian generally accepted accounting principles (Italian GAAP, based on a revenue-expense model) with those of the Italian non-financial private firms voluntarily adopting the international financial reporting standards (IFRS, based on the asset-liability model). To address major methodological concerns, the research design is based on a single-country analysis and on three different samples as follows: firms voluntarily adopting IFRS; a matched sample of Italian GAAP firms; Italian GAAP firms belonging to the Elite programme, and therefore, comparable to the IFRS adopters in terms of incentives towards financial reporting transparency.

The results show that firms reporting under a revenue-expense model are characterized by a stronger revenue-expense matching degree, along with higher earnings’ persistence, earnings’ predictability and conditional conservatism than firms adopting an asset-liability model. In addition, contrary to the expectations, Italian GAAP firms do not present smoother earnings and do not report greater abnormal accruals than IFRS adopters do. Overall, the findings suggest that the switch from a revenue-expense model to an asset-liability model negatively affects several earnings attributes of non-financial private companies, shedding new light on the drawbacks associated with the adoption of the IFRS accounting model.

This study addresses a theme characterized by sparse research efforts, adding new insights to the debate on the decline in the quality of earnings and on the drawbacks associated with the adoption of the IFRS accounting model.

The aim of the research is to use variations in measured accounting conservatism to gain a deeper understanding about the reporting incentives created by a country's institutional structure.

Geographic proximity, cultural affinity and integrated economic relations provide Greater China with a unique setting for studying cross‐country differences in institutional characteristics which affect the demand for accounting conservatism. Ball and Shivakumar contend that the economic role of conditional conservatism is an important attribute of financial reporting quality because it improves the efficiency of contracting, reduces information asymmetry and improves corporate governance.

The empirical results indicate that Hong Kong is the most conservative economy, followed by Taiwan and China, implying that the legal/judicial system, regulatory environment and political economy of different countries are the pivotal forces which drive accounting conservatism. Overall, the evidence suggests that a country's institutional structures interact strongly with reporting incentives in determining accounting conservatism.

This research examines cross‐country differences in financial reporting quality by contrasting the influence of country‐specific institutional factors on financial reporting incentives for conservative accounting practices. It is expected that this research will have important policy implication.

This study aims to examine whether the adoption of International Financial Reporting Standards (IFRS) leads to accounting quality improvements in Egypt as a code-law country. In particular, the study examines earnings management, the construct often used to assess accounting quality.

The study compares earnings management practice for Egyptian listed companies before (2000-2006) and after (2007-2009) the adoption of IFRS.

The findings of the study reveal that accounting quality, as measured by earnings management, has decreased in post-adoption period compared to pre-adoption period. IFRS are set up to provide high-quality financial reporting. However, this cannot be achieved solely by a regulatory requirement to follow. The accounting system is a complementary component of the country’s overall institutional system. Institutional improvements did not simultaneously take place by the Egyptian government around the adoption of IFRS. The Egyptian government did not introduce a more effective enforcement system, mandatory corporate governance regulations, investor protection mechanisms and sufficient institutional knowledge of IFRS during that period. Thus, even if IFRS are higher quality standards, the institutional features of Egyptian market could eliminate any improvement in accounting quality arising from adopting IFRS.

The results of the study are consistent with prior research suggesting that the adoption of IFRS, which are generally perceived to be of higher quality than domestic standards, does not necessarily lead to higher accounting quality in code-law countries like Egypt. The overall results indicate that incentives dominate accounting standards in determining accounting quality in Egypt.

The main reason why countries adopt IFRS invariably is to improve accounting quality. It is, therefore, of interest to ascertain if this goal has been met, especially, in code-law countries such as Egypt.

This study aims to examine how firms choose an auditor in the presence of bilateral information asymmetry between insiders and outsiders regarding firms’ economic performance.

This study presents a one-period reporting bias game with a firm’s risk-neutral manager and investors in the capital market, in which a manager with private information chooses an auditor and reports earnings to investors who acquire their own information. The analysis focuses on the possibility that the manager engages an auditor to constrain earnings management as a commitment device to minimize reporting error cost.

The results show that the manager’s optimal auditor choice is determined based on investor sensitivity to the earnings report, and managerial incentives for earnings management, discounted by the uncertainty of reporting errors. The results for optimal auditor choice are counterintuitive: engaging a higher-quality auditor could seemingly be associated with aggressive earnings management.

This study advances the understanding of the theoretical basis of firms’ auditor choice in the context of market investors’ information acquisition when auditors exercise their discretion in reporting. This issue has received limited attention in the extant literature.