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This study aims to investigate the implications of audit industry specialization on auditor’s retention and growth within an emerging economy. Factors such as whether the firm is a Big 4, a firm with international affiliation, a local firm and the type of industry were studied to analyse the reasons behind audit firm retention and growth.

This research is based on a field study related to audit firms providing services to listed companies in an emerging economy. The sample includes the top 100 publicly held companies’ in the Egyptian stock market during 2006-2011 for which their annual reports are analysed to determine the audit firms’ retention and growth. An assessment of the continuity of the auditors and the increase in the number of audit clients were also measured.

The results confirm that industry specialization has an important effect on the auditor’s retention, especially for industries where capital investment is significant such as buildings, construction, financial services, housing and real estate. Big 4 audit firms retained their clients because of their industry specialization and brand name. Evidence was found that good knowledge of accounting and auditing standards resulted in audit firms with international affiliation competing with the Big 4 for clients’ retention and growth.

This study contributes to the existing literature, as it is among the first to provide empirical evidence on auditor retention, growth and auditor’s dominance in an emerging economy such as Egypt.

Statement of Financial Standards No. 133 (SFAS No. 133), “Accounting for derivative instruments and hedging activities” became effective for all publicly held companies for fiscal periods starting after 15 December 2000. Consequently, 31 December 2001 was the first reporting date for most companies under its provisions. This study examines the annual reports of the 30 companies that comprise the Dow Jones Industrial Average to determine the extent to which these companies complied with the provisions of SFAS No. 133. A surprising finding was that a large number of the sample companies reported that the effect of their hedging activities was immaterial. The study also found that the information disclosed about the derivatives held by the sample of companies was scattered throughout their annual reports, hard to understand, difficult to follow and lacked uniformity. It was concluded that it would take a great deal of effort for even a reasonably informed reader of the financial statements to gather and analyze the information relating to a company's use of derivatives, and as a result the desired level of financial transparency on the use of derivative financial instruments is not being achieved. It is recommended that a more uniform reporting format be developed and used.

There is ample evidence that many firms do not fully disclose environmental liabilities. Since it is likely that full disclosure of these liabilities may lead to greater accountability by a firm, it is important to identify factors related to the treatment and disclosure of these specific liabilities. This study reports on factors found to be related to the intentions of 263 financial executives to accrue and disclose environmental liabilities based on scenarios developed for this research. Using the Theory of Planned Behavior, we find that intentions to accrue and disclose environmental liabilities are positively related to an executive's attitudes, subjective norms, perceived behavioral control, and sense of obligation. We also provide evidence that the magnitude of the environmental and financial consequences has a positive, significant relation to these intentions and find that financial executives from privately held companies are less likely to accrue and disclose environmental liabilities than those from companies that are publicly traded. These findings suggest that encouraging positive attitudes toward environmental accruals and disclosures, enhancing the behavioral control of financial executives over the accrual decision, and heightening their moral obligation to disclosure these liabilities may lead to better accounting treatment and transparency of environmental matters.

Reviews the development of the corporate social responsibility (CSR) concept and its four components: economic, legal, ethical and altruistic duties. Discusses different perspectives on the proper role of business in society, from profit making to community service provider. Suggests that much of the confusion and controversy over CSR stem from a failure to distinguish among ethical, altruistic and strategic forms of CSR. On the basis of a thorough examination of the arguments for and against altruistic CSR, concurs with Milton Friedman that altruistic CSR is not a legitimate role of business. Proposes that ethical CSR, grounded in the concept of ethical duties and responsibilities, is mandatory. Concludes that strategic CSR is good for business and society. Advises that marketing take a lead role in strategic CSR activities. Notes difficulties in CSR practice and offers suggestions for marketers in planning for strategic CSR and for academic researchers in further clarifying the boundaries of strategic CSR.

This paper is concerned with financial statement disclosure of environmental liabilities by companies that are coming to the US securities market for the first time in an initial public offering (IPO). This specific disclosure type has not been previously reported on in the accounting literature. Compares 26 IPO firms identified as potentially responsible parties (PRPs) in Superfund sites with a closely matched (on the attributes of industry classification and asset size) group of publicly held PRPs. The objective is to observe whether there is a differentially higher level of environmental disclosure by the IPO group during the year of heightened securities market scrutiny as the IPO occurs. Data are collected through content analysis of annual reports and SEC Form 10‐Ks. The results from this study show that no different level of environmental disclosure was identified in the matched‐pair sample. The more intense inspection, the higher stakes in an IPO situation and the enhanced due diligence procedures are of no apparent consequence in simulating a greater amount or quality of environmental disclosure. Strict disclosure mandates and expected public scrutiny do not appear to ensure the anticipated level of accounting statement disclosure concerning environmental liabilities.

The Telecommunications Act of 1996 led to the creation of the competitive local exchange carriers, known as CLECS (pronounced sea‐lecks). Despite a strong beginning and great optimism, between January 2000 and September 2002, almost half of the publicly held CLECS filed for bankruptcy. Though their path to bankruptcy was typical, the atmosphere surrounding the CLECS was not. They enjoyed the strong support of Wall Street analysts in the form of positive reports and buy ratings, as well as support from institutional investors in the form of investments, for much of their lives. This support may have been the consequence of the telecommunications mania that marked the late 1990s and part of 2000, or, it has been alleged, the result of unethical and possibly illegal behavior on the part of some of Wall Street analysts. Though this situation will no doubt generate a great deal of research in the coming years, this paper examines one of the most important issues that is prompted by the question: Using metrics that are readily available, could investors, analysts and other interested parties have predicted which CLECS would file for bankruptcy prior to the filings? This study attempts to respond to this question by envisioning a scenario in which an investor, analyst, or other observer learns in 2001 that three of the CLECS filed for bankruptcy in 2000. In response, the interested party reads some of the literature on predicting bankruptcy, and then uses certain of the methods described to determine which of the remaining CLECS are likely to become insolvent in 2001 and 2002.

This paper aims to determine priority issues in the corporate governance (CG) principles to increase CG rating notes of publicly traded companies.

This study defines the priority issues for publicly traded companies that should be focused to increase the CG rating notes. In this context, this study considers the companies in Borsa Istanbul CG index (XKURY), use data for 2018, 2019, 2020, and applies machine learning algorithms.

Overall, importance of each CG principle changes for the CG rating notes; first five CG principles in terms of significance have a total of 43.6% importance for the CG rating notes; following a straight-line approach in completing deficiencies of the CG principles cannot help increase the CG rating notes. Hence, empirical results highlight the impact of the most significant CG principles in terms of the CG rating notes that should be focused on by publicly traded companies so that CG ratings can be increased.

This study uses Turkey data and considers publicly traded companies in the XKURY index. The main cause of this condition is that consolidated data of compliance report format for all publicly traded companies cannot be obtained.

The publicly traded companies can increase the CG rating notes by considering the results of this study while focusing on priority issues in the CG principles.

The study determines the most important CG principles that companies can focus on, highlights the importance of usage of machine learning algorithms in determining the most influential CG principles in terms of the CG rating notes and reflects on the difficulties for gathering consolidated CG principles compliance reporting data for all publicly traded companies. Hence, societies can have better companies that are ruled more efficiently and corporately by increasing their compliance with the CG principles.

To the best of the authors’ knowledge, this is the first empirical study that determines the priority issues to increase the CG rating notes of publicly traded companies based on the new CG principles compliance reporting scheme in Turkey. Following this aim, machine learning algorithms, which can present better results with regard to most of the econometric models, are used in this study.

Highlights the role played by the Securities and Exchange Commission (SEC), the New York Stock Exchange (NYSE), the American Institute of Certified Public Accountants (AICPA), The Institute of Internal Auditors (IIA), the Treadway Commission, and other professional organizations in furthering the establishment of audit committees in the USA. In the international arena, the UK Cadbury Committee, the Australian Borsch Committee, and the Canadian Macdonald Commission have influenced the widespread use of corporate audit committees in their respective countries. The guidelines on audit committees set by the IIA, AICPA, SEC, and the Treadway Commission have had a tremendous impact worldwide. Cultural differences may, however, limit the formation and effectiveness of audit committees globally even though auditing is a relatively homogeneous profession. The Institute of Internal Auditors, as an international professional association, may wish to consider the cultural dimensions of corporate governance in formulating professional internal auditing standards dealing with the structure and functions of audit committees internationally.

This commentary questions commonly held assumptions about corporate social responsibility (CSR). It discusses the morality of altruistic CSR – philanthropic CSR activities that are not necessarily beneficial to the firm’s financial position. Evaluating altruistic CSR from all major ethical perspectives – utilitarianism, rights, justice and care – leads to the conclusion that, for publicly held corporations, such activity is immoral. This is because altruistic CSR violates shareholder property rights, unjustly seizing stockholder wealth, and it bestows benefits for the general welfare at the expense of those for whom the firm should care in close relationships. The paper also determines that what are often considered mandatory ethical and social corporate duties are actually optional activities that should only be undertaken when it appears that they can enhance the value of the firm, i.e. when they are used as strategic CSR. However, using ideas taken from secular and Judaeo‐Christian authors on the meaning of work, the article also concludes that altruistic activities are appropriate and commendable for private firms and individuals. It offers suggestions for practitioners of CSR and for future academic research.