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Discretionary tone in reward-based crowdfunding: Do project owners talk their way to success? The British Accounting Review (IF 5.5) Pub Date : 2024-06-21 Douglas Cumming, Yihui Lan, Yuan George Shan, Junru Zhang
This study examines the relationship between abnormal tone and project performance of reward-based crowdfunding (RBC) using the Kickstarter data from 2009 to 2020. We document a negative relationship between abnormal tone and the success of a project in the RBC campaign section, while a positive impact in the Risks and Challenges section. This outcome remains robust to a variety of sensitivity tests
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Political sentiment and credit ratings The British Accounting Review (IF 5.5) Pub Date : 2024-06-21 Mostafa Monzur Hasan, Ashrafee Hossain, Haiyan Jiang
This study examines the relationship between firms’ political sentiment (PSENT) and their credit ratings. Using US public firms as the sample, we reveal that PSENT is positively associated with corporate credit ratings. Furthermore, we find evidence indicating that a positive PSENT leads to higher credit ratings, while a negative PSENT results in lower credit ratings. We also demonstrate that PSENT
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The impact of loosening regulatory requirements on firm innovation: Evidence from SEC rule 12h-6 The British Accounting Review (IF 5.5) Pub Date : 2024-06-20 Nathan Zhenghang Zhu, Kun Tracy Wang
The US Securities and Exchange Commission implemented Exchange Act Rule 12h-6 in 2007, which made it considerably easier for cross-listed firms in the US market to deregister and terminate their regulatory obligations as US exchange listings. Using a difference-in-differences research design, we predict and find that in the period after the implementation of Rule 12h-6, cross-listed firms have significantly
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Strategic forward-looking nonearnings disclosure and overinvestment The British Accounting Review (IF 5.5) Pub Date : 2024-06-20 Jean Jinghan Chen, Peiyang Song, Fai Lim Loi
We examine whether tone management in different aspects of forward-looking statements (FLSs) is related to managers' self-serving overinvestments. Using data for U.S.-listed firms between 2003 and 2019, we provide novel evidence that the abnormal tone of nonearnings-related qualitative FLSs' is significantly and positively related to firms' overinvestments but that other aspects of FLSs are insignificant
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Capitalised development costs and future cash flows: The effect of CEO overconfidence and board gender diversity The British Accounting Review (IF 5.5) Pub Date : 2024-06-17 Khadija S. Almaghrabi, Richard Slack, Ioannis Tsalavoutas, Fanis Tsoligkas
Capitalisation of development costs mandated under IAS 38 is an important accounting issue conveying a signal to users of accounting information regarding future economic benefits. Using a longitudinal sample of UK firms, firstly, we examine the adverse effect of CEO overconfidence levels on the association between capitalised development costs and future economic benefits, proxied by cash flows. Secondly
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Management control systems, business financial literacy and financial leverage in business-incubated start-ups The British Accounting Review (IF 5.5) Pub Date : 2024-06-15 Roberto Graña-Alvarez, Jacobo Gomez-Conde, Ernesto Lopez-Valeiras, Miguel González-Loureiro
Entrepreneurs manage the capital structure of their start-ups to align the assumption of financial risk with their risk appetite. We focus on the ways in which management control systems (MCS), categorized as financial and non-financial MCS, serve as determinants of financial leverage in start-ups. Of particular interest is the influence of entrepreneurs' financial literacy on this relationship. We
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A global study of climate uncertainty and carbon assurance The British Accounting Review (IF 5.5) Pub Date : 2024-06-15 Le Luo, Junru Zhang
Measurement, verification, and reporting of carbon emissions is essential for climate management. However, research on carbon assurance is limited. To address this gap, we investigate the association between climate uncertainty and voluntary carbon assurance. We conceptualize and operationalize four dimensions of micro-level climate uncertainty: innovation, management and performance, supply chain
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Climate change uncertainty and supply chain financing The British Accounting Review (IF 5.5) Pub Date : 2024-06-12 Zhangfan Cao, Steven Xianglong Chen, Ting Dong, Edward Lee
We examine the impact of climate change uncertainty on supply chain financing. We find that firms significantly curtail trade credit provision during periods of high climate change uncertainty. The cross-sectional variations of this effect with firm-specific factors such as vulnerability to climate change, asset redeployability, and pollution severity suggest that it is primarily driven by managerial
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Rank-and-file employee stock options and audit pricing: Evidence from S&P 1500 firms The British Accounting Review (IF 5.5) Pub Date : 2024-06-11 Xiaoqi Chen, Maoliang Li, Emmanuel Obiri-Yeboah, Qiang Wu
In this study, we examine the impact of rank-and-file employee stock options on audit fees. We document compelling evidence that option grants to rank-and-file employees are positively related to audit fees. Further analyses show that this positive relation is more pronounced when a firm's real earnings manipulation risk is higher and when rank-and-file employees are more sensitive to monetary incentives
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Director networks, accounting conservatism and director reputation: Evidence after financial reporting failure The British Accounting Review (IF 5.5) Pub Date : 2024-06-08 Chih-Liang Liu, Shu-Miao Lai, In-Mu Haw
This study examines whether connected boards of directors restore their reputation via conservative accounting after financial misstatements. Using a sample of restating firms from 2004 to 2020, we find central boards of directors are positively related to accounting conservatism in the post-restatement period. More importantly, we find accounting conservatism has positive effects on the reputation
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Devolution, counter-conduct and territoriality: The case of Tax Business Rates in the United Kingdom The British Accounting Review (IF 5.5) Pub Date : 2024-05-31 Penelope A.L. Tuck, Dominic de Cogan, Rodrigo Ormeño-Pérez
Business Rates (BR) are key to the interaction between national, devolved, regional and local institutions of government in the UK. A liability to the tax can make the difference between the life and death of a business, and the design and implementation of business rates interacts with areas of policy concern as disparate as devolution, planning, charity regulation and digitalisation. We examine how
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Is greater connectivity of financial and non-financial information in annual reports valued by market participants? The British Accounting Review (IF 5.5) Pub Date : 2024-05-31 Ruizhe Wang, Wai Fong Chua, Roger Simnett, Shan Zhou
The establishment of the International Sustainability Standards Board (ISSB), and the endorsement by the International Financial Reporting Standards (IFRS) foundation of the principles underlying the Integrated Reporting (IR) Framework, attest to a regulatory intent to develop a disclosure framework better connecting sustainability-related financial disclosures with financial disclosures. Strategic
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The impact of lobbying on managerial short-term resource adjustment decisions The British Accounting Review (IF 5.5) Pub Date : 2024-05-12 Johannes Voshaar, Thomas R. Loy, Jochen Zimmermann
This study examines the effect of political lobbying on firms' short-term resource adjustment decisions. Controlling for a wide range of known determinants of managerial cost behaviour, our results suggest that U.S. lobbying firms exhibit significantly less cost stickiness than non-lobbying firms. Lobbying reduces managers' "wait-and-see games" as they obtain preferential access to information on political
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The determinants of corporate cost of debt during a financial crisis The British Accounting Review (IF 5.5) Pub Date : 2024-05-01 Tauhidul Islam Tanin, Ashutosh Sarker, Shawkat Hammoudeh, Jonathan A. Batten
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Impression management strategy — The relationship between accounting narrative thematic bias and financial graph distortion The British Accounting Review (IF 5.5) Pub Date : 2024-04-25 Jeff Boone, Jie Hao, Cheryl Linthicum, Viet Pham
Prior literature has examined 10-K narrative thematic bias and financial graph distortion as two independent outcomes that might arise from managements' efforts at impression management. Largely unexplored is an analysis of narrative thematic bias and financial graph distortion as joint and interrelated outcomes that would arise if management coordinates both in the same 10-K report as part of an impression
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Environmental regulations and corporate cash holdings The British Accounting Review (IF 5.5) Pub Date : 2024-04-24 Wenrui Chen, Yue Cao, Yizhe Dong, Diandian Ma
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Key audit matters disclosures and informed traders The British Accounting Review (IF 5.5) Pub Date : 2024-04-20 Zabihollah Rezaee, Saeid Homayoun
We examine whether the audit regulation of disclosing key audit matters (KAM) provides value-relevant information to short sellers as informed investors. The theoretical underpinning for examining short sellers' ability and incentives to use KAM disclosures in their stock valuation implications is based on a prediction theory and a skilled information processing theory of short sellers. Using a sample
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CEO succession origin and annual reports readability The British Accounting Review (IF 5.5) Pub Date : 2024-04-18 Javad Oradi, Reza Hesarzadeh, Sahar E-Vahdati, Muhammad Nadeem
We examine the association between the origin of chief executive officer (CEO) succession (i.e., promoting a CEO from within the firm as opposed to recruiting from outside) and annual reports readability. Based on a sample of large U.S. companies during the period 2004–2020, we predict and find that companies with insider CEOs issue more readable 10-K reports compared to those who hire from outside
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The effects of extreme high temperature spells on financial performance The British Accounting Review (IF 5.5) Pub Date : 2024-04-16 Paul A. Griffin, David H. Lont, Martien J.P. Lubberink
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The capital market consequence of sustained abnormal Audit fees: Evidence from stock price crash risk The British Accounting Review (IF 5.5) Pub Date : 2024-04-16 Sang Mook Lee, Jong Chool Park, Hakjoon Song
Prior studies provide mixed interpretations for the effect of abnormal audit fees on audit quality. One interpretation is that abnormal audit fees reflect economic bonding which decreases audit quality, while the other interpretation is that they are associated with unobserved audit efforts and audit risk. We argue that long-term abnormal audit fees clarify mixed evidence, as they reflect the gradual
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High-quality assurance, ESG legitimacy threats and board effectiveness The British Accounting Review (IF 5.5) Pub Date : 2024-04-16 García-Meca Emma, Ruiz-Barbadillo Emiliano, Martínez-Ferrero Jennifer
This study aims to investigate whether companies engage high-quality assurance in response to legitimacy threats caused by media coverage of negative sustainability events. Since responsive strategies designed to maintain or repair legitimacy directly emanate from boards, the paper also analyses whether board effectiveness reinforces defensive strategies to maintain a company's reputational capital
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“Fly alone, die alone”? The clan and the production of tax expertise The British Accounting Review (IF 5.5) Pub Date : 2024-03-30 Maryse Mayer, Yves Gendron
How do tax advisors make themselves comfortable with the tax planning arrangements they recommend to their clients, in the many gray areas that characterize their field of practice? What motivates tax advisors to consult each other in this context? In this field study, we examine the processes that help (re)produce an influential informal norm of peer consultation surrounding the work of tax partners
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The effect of ESG-motivated turnover on firm financial risk The British Accounting Review (IF 5.5) Pub Date : 2024-03-27 Daewoung Choi, Yong Kyu Gam, Min Jung Kang, Hojong Shin
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Manager sentiment, deal characteristics, and takeover performance The British Accounting Review (IF 5.5) Pub Date : 2024-03-21 Suwei An, Yi Liu, Xiaofen Tan, Kai Wu
Various studies analyze the driving forces behind takeover activities, including investor sentiment, liquidity, and fundamental shocks. In this study, we examine how manager sentiment influences takeover characteristics and long-term performance using textual analysis of data in 10-K and 10-Q filings. Our findings identify that manager sentiment has strong positive predictive power for takeover activities
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On the role and effects of supervisor feedback sign in auditing: Evidence from a cohort of early career auditors. The British Accounting Review (IF 5.5) Pub Date : 2024-03-21 Tobias Johansson-Berg, Gustav Johed, Thomas Carrington
Supervisor feedback is essential for training and socialising early career auditors. One fundamental aspect and choice of a supervisor's feedback practice and style is whether to focus on encouraging good or discouraging poor performance. We acknowledge that early career auditors likely receive feedback on both good and poor performance in ongoing and extended feedback relationships with their closest
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The price of corporate social irresponsibility in seasoned equity offerings: International evidence The British Accounting Review (IF 5.5) Pub Date : 2024-03-13 Choy Yeing (Chloe) Ho, Eliza Wu, Jing Yu
We examine the impact of poor corporate social responsibility engagement signalled through negative environmental and social (E&S) incidents on equity financing via seasoned equity offerings (SEOs) across 25 countries. The results show that negative E&S incidents significantly aggravate SEO underpricing, thereby increasing the cost of raising equity capital. Managers appear to take the adverse effects
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Hybrid board governance: Exploring the challenges in implementing social impact measurements The British Accounting Review (IF 5.5) Pub Date : 2024-03-05 Anup Banerjee, Martin Carlsson-Wall, Mattias Nordqvist
This paper focuses on hybrid board governance and the challenges faced by the board of directors when implementing social impact measurements. Interviews with 36 board chairs and general secretaries in social hybrids in Sweden show that while boards support social impact measurements, they face obstacles in implementing them. Drawing on the institutional logics framework, we identify three main reasons
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Blockchain and earnings management: Evidence from the supply chain The British Accounting Review (IF 5.5) Pub Date : 2024-02-23 Donald Autore, Huimin (Amy) Chen, Nicholas Clarke, Jingrong Lin
We investigate whether corporate adoption of blockchain technology is associated with a change in firms' financial reporting behavior. On one hand, the features of blockchain technology (immutability, decentralized consensus, and real-time data sharing) can enhance data integrity, suggesting corporate blockchain adoptions may reduce earnings management. However, despite fast growth in blockchain adoptions
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On professional destabilization and accounting self-regulation The British Accounting Review (IF 5.5) Pub Date : 2024-02-20 Zachary Huxley, Marion Brivot
The accounting profession faces significant upheaval due to numerous destabilizations in its environment, with financialization being particularly impactful. This paper introduces a theoretical framework to dissect how the profession reacts to such disruptions. We posit that destabilizations give rise to novel types of misconduct, leading professional bodies to re-evaluate their definitions of (un)acceptable
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Dynamics of carbon risk, cost of debt and leverage adjustments The British Accounting Review (IF 5.5) Pub Date : 2024-02-07 Douglas Cumming, Geeta Duppati, Ruwani Fernando, Shivendu Pratap Singh, Aviral Tiwari
We evaluate the effects of carbon risk on the speed at which corporations adjust their leverage for the period 2006–2020. Primarily we address the question: Does national carbon risk impact firm-level speed of adjustment (SOA)? To address the main question, our study further classifies the companies in the sample based on borrowing costs and carbon risk. By doing so, we report on how borrowing costs
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Mandatory corporate social responsibility spending, family control, and the cost of debt The British Accounting Review (IF 5.5) Pub Date : 2024-02-05 Naina Duggal, Lerong He, Tara Shankar Shaw
This paper examines how corporate compliance with the mandatory corporate social responsibility (CSR) spending regulation affects its cost of debt and how this effect varies with family control and ownership. Utilizing a longitudinal sample of Indian listed firms, we document that compliance with the CSR spending regulation leads to a lower cost of debt, and this relationship is more salient in non-family
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Auditing for fraud and corruption: A public-interest-based definition and analysis The British Accounting Review (IF 5.5) Pub Date : 2024-02-05 Massimo Sargiacomo, Jeff Everett, Luca Ianni, Antonio D'Andreamatteo
To better understand how the practice of auditing can be more effectively enrolled in the fight against fraud and corruption, this study (1) examines how these problems are viewed and defined by the public and (2) contrasts this view and definition with that of professional auditors. The examination is informed by the dispositive theory of Foucault and an inductive analysis of a large (90,000+) multi-year
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Towards fluid role identity of management accountants: A case study of a Finnish bank The British Accounting Review (IF 5.5) Pub Date : 2024-02-02 Antti Rautiainen, Robert W. Scapens, Marko Järvenpää, Tommi Auvinen, Pasi Sajasalo
In our case study of a Finnish bank, we found that the role identity of management accountants is becoming fluid, i.e., it is constantly adjusting to accommodate shifting role expectations and changing context-specific demands. Digitalization and information technology (with such tools as artificial intelligence and robotic process automation) are key drivers of change. Furthermore, banking is also
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Do conformity and bailouts affect misreporting? The case of public health-care organisations The British Accounting Review (IF 5.5) Pub Date : 2024-01-21 Eugenio Anessi-Pessina, Ileana Steccolini
Most literature on the antecedents of misreporting in the public sector focuses on the propensity to report financial breakeven, with limited attention to the regulatory and normative incentives that may alter such propensity. This study provides novel explanations for public sector organisations' deviation from breakeven. Its underlying assumption is that misreporting may be shaped by mimetic pressures
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Overlapping insiders and the method of payment in acquisitions: New tests and evidence on adverse selection The British Accounting Review (IF 5.5) Pub Date : 2024-01-14 Varun Jindal, Rama Seth
Exploiting a unique setting of overlapping insiders between acquirers and targets in India, we examine how information asymmetry between the transacting parties influences the returns to acquiring firms' shareholders, as well as the method of payment. Using a novel dataset, we find that cash-financed deals generate greater (no significantly different) value for acquiring firms’ shareholders than stock-financed
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Curbing myopic R&D behavior: How private meetings serve as a channel The British Accounting Review (IF 5.5) Pub Date : 2024-01-14 Jiaying Ge, Steven F. Cahan, Jerry W. Chen
This study considers whether investor-manager private meetings serve as a potential channel to detect and restrain corporate myopic R&D behavior in firmsject to earnings pressure. To do so, we exploit a unique dataset of corporate site visits, a particular form of private meetings. Our results indicate that the myopic R&D behavior of firms under earnings pressure is significantly lower when the firm
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The schizophrenic board secretary: Embedded agent between multiple stakeholders and financial misconduct The British Accounting Review (IF 5.5) Pub Date : 2024-01-11 Bin Liu, David Ahlstrom, Yutong Zhang
While agency theory has emphasized the importance of corporate governance in preventing financial misconduct, monitoring bodies do not always function well, especially in transition economies. By integrating the stakeholder-agency perspective with prospect theory, this study provides a new explanation of such dysfunction by introducing an embedded agent concept that manifests in a “schizophrenic” status
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Capitalism and the return on capital employed. Some further evidence The British Accounting Review (IF 5.5) Pub Date : 2024-01-11 John Richard Edwards
Return on capital employed is recognised both as a symbol of capitalism and as a calculation designed to help achieve the more effective deployment of available resources. Dating the emergence of this ‘accounting signature’ has been the subject of vigorous debate. Rob Bryer believes that calculation of the return on capital employed played a meaningful role in business life from the eighteenth century
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FinTech adoption in banks and their liquidity creation The British Accounting Review (IF 5.5) Pub Date : 2024-01-11 Zhuochen Wu, Shams Pathan, Chen Zheng
Utilizing an innovative financial technology (FinTech) index based on media sources, we analyse the effects of FinTech adoption on bank liquidity creation for a sample of the top 300 United States banks from Q1 2015 to Q2 2021. Our findings reveal a consistent negative association between FinTech adoption and bank liquidity creation, even during the coronavirus disease (COVID-19) pandemic. This relationship
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Financial statement comparability and analysts’ optimism for accruals The British Accounting Review (IF 5.5) Pub Date : 2023-12-29 Bryan Byung-Hee Lee, Jay Junghun Lee
This study examines the role of financial statement comparability in mitigating analysts' optimism for accruals. Prior research shows that sell-side analysts do not fully incorporate accrual information in anticipating future earnings and thus tend to issue more optimistic forecasts for firms with a higher level of accruals. We posit that financial statement comparability allows analysts to use industry
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The role of the strategic apex in shaping the disclosure strategy: A family firm in crisis The British Accounting Review (IF 5.5) Pub Date : 2023-12-28 Mattias Sandgren, Timur Uman, Mattias Nordqvist
This study draws on attribution theory to examine and by the firm's top management team, board members, and owner(s) (i.e., the strategic apex) shape disclosure strategies. Drawing on interviews and archival data spanning six years, we conduct a case study of a financially distressed private family-owned media group. Unique access to these data allowed us to peer into the disclosure strategy formation
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The effect of key audit matters and management disclosures on auditors’ judgements and decisions: An exploratory study The British Accounting Review (IF 5.5) Pub Date : 2023-12-28 Jin Ma, Paul Coram, Indrit Troshani
We investigate how disclosure of key audit matters (KAMs) and related management footnote disclosures on a subjective accounting estimate relating to fair value in the financial statement footnotes affect auditors' perceptions of their accountability and their subsequent adjustment decisions. In relation to accountability, a substitution effect is found between KAMs disclosures and footnotes. That
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Which governance mechanisms matter for firm pollution? The British Accounting Review (IF 5.5) Pub Date : 2023-12-07 Sarfraz Khan, John K. Wald
Using U.S. EPA pollution data, we analyze which governance provisions are related to firm pollution. We find that classified boards, poison pills, limits to amend bylaws, and fair price amendments are associated with significantly greater pollution. In contrast, cumulative voting, because it allows a greater voice for minority shareholders, is associated with lower pollution. We create a pollution-based
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How can regulators affect corporate social responsibility? Evidence from regulatory disclosures of consumer complaints in the U.S. The British Accounting Review (IF 5.5) Pub Date : 2023-11-27 Yujie Wang, Albert Tsang, Yi Xiang, Shuo Yan
Regulators are increasingly seeking ways to incentivize firms to improve corporate social responsibility (CSR) while minimizing criticism of direct interventions in firm behavior. This study takes advantage of two exogenous regulatory shocks initiated by the Consumer Financial Protection Bureau (CFPB) in the US. In 2011, the CFPB enabled the private filing of consumer complaints against financial firms
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Hallmarks of Integrated Thinking The British Accounting Review (IF 5.5) Pub Date : 2023-11-18 Ruth Dimes, Charl de Villiers
Integrated Thinking, the management approach associated with Integrated Reporting, has been hailed as a way of improving organisational decision-making and internal communication, leading to sustainable value creation. Yet Integrated Thinking remains poorly defined and understood. By analysing and synthesising the findings from an emerging body of case study evidence, this paper brings new theoretical
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Stuck in traffic: Do auditors price traffic congestion? The British Accounting Review (IF 5.5) Pub Date : 2023-11-16 Jie Hao, Viet Tuan Pham
Although the detrimental impact of traffic congestion on firm operations and human health is widely acknowledged, it is unclear whether auditors perceive traffic congestion as a risk factor. We posit and find that the traffic congestion levels in audit clients' domicile cities are positively associated with audit fees. Using a structured equation model, we identify and illustrate several channels that
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Investor behavior around targeted liquidity announcements The British Accounting Review (IF 5.5) Pub Date : 2023-11-14 Giovanni Cardillo, Enrico Onali, Salvatore Perdichizzi
We exploit announcements related to targeted longer-term financing operations (TLTROs) as exogenous shocks in investor perceptions to test recent theories on bank funding liquidity (Ahnert et al., 2019; Liu, 2015). We find that banks with high derivative holdings and more exposed to sovereign credit risk respond better to the announcements, consistent with the view that lower funding costs benefit
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Exploring the acquisition behavior of penny stock firms The British Accounting Review (IF 5.5) Pub Date : 2023-11-13 Shujie Liu, Mohammed Aminu Sualihu, Mingwei Sun, Alfred Yawson
We document that penny stock firms' acquisition likelihood increases with firm size, sales growth, free cash flow, stock price volatility, and run-up, but decreases with leverage, the number of years since IPO, and Tobin's Q. These findings are validated in a stepwise regression framework and are robust to alternative model specifications. Penny stock acquirers prefer private targets and are more (less)
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The collapse of the FTX exchange: The end of cryptocurrency's age of innocence The British Accounting Review (IF 5.5) Pub Date : 2023-11-11 Thomas Conlon, Shaen Corbet, Yang Hu
The sudden collapse of the FTX exchange appears to have unearthed several fundamental ethical, regulatory, and policy-based flaws, inherently damaging the cryptocurrency industry at large. The following research outlines the key events that led to the bankruptcy of FTX while examining industry-wide implications as a consequence of an acute risk management failure. Results indicate severe risk and liquidity
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Accounting and reporting for facing multiple values in meso-level hybrid organisations The British Accounting Review (IF 5.5) Pub Date : 2023-11-11 Renata Paola Dameri, Clara Benevolo, Paola Demartini
This work examines a new form of second-level hybrid, Meso-Level Hybrid Organisations (MLHOs), which do not generate an entity with a legal form or boundaries and is composed by a set of members in the organisational field, linked by multiple relationships and engaged in solving complex problems that require both public and private efforts. Our research interest is in the role that accounting and reporting
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Auditing decentralized finance The British Accounting Review (IF 5.5) Pub Date : 2023-11-11 Siddharth M. Bhambhwani, Allen H. Huang
Decentralized finance (DeFi), which executes financial transactions using blockchain without an intermediary, has attracted over US$250 billion in total value locked (TVL) at its peak. However, little is known about how DeFi protocols assure users of the safety of their investments. This paper provides the first empirical evidence on DeFi audit services that check and verify the smart contracts underlying
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Labor protection and stock price crash risk: Evidence from international equity markets The British Accounting Review (IF 5.5) Pub Date : 2023-11-10 Wei Chen, Lili Dai, Xiaohua Fang, Wenjun Zhang
We utilize the exogenous intertemporal variation in employment protection across countries and study the impact of employment protection on international equity markets. We find robust evidence that firms located in countries with weak labor protection regulation exhibit a low level of one-year-ahead stock price crash risks relative to those in countries with strong labor protection regulation. It
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Measuring the ownership and control of UK listed firms: Some methodological challenges The British Accounting Review (IF 5.5) Pub Date : 2023-11-07 Marc Goergen, Svetlana Mira
While scholars in business, management, accounting and finance frequently use data on the ownership and control structure of companies in their research, we show that determining this structure for a UK public limited company using publicly available information can be fraught with a number of difficulties. The latest changes to the UK Listing rules following the Hill Review (2021) may further exacerbate
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Are FinTech lending apps harmful? Evidence from user experience in the Indian market The British Accounting Review (IF 5.5) Pub Date : 2023-10-28 Akbar Ali, Vijaya B. Marisetty
Lower regulatory hurdles and ease of penetration has made FinTech lending grow rapidly across the world. Using around 2.19 million reviews from users of FinTech loan applications registered in Google Play Store in India, we investigate users' experience on FinTech lending. Our text analytics-based results indicate that around 20 percent of the negative experience is associated with fraud. FinTech lending
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What’s in a shade? The market relevance of green bonds’ external reviews The British Accounting Review (IF 5.5) Pub Date : 2023-10-28 Marco Ghitti, Gianfranco Gianfrate, Florencio López de Silanes, Marco Spinelli
With the growth of green bonds as an asset class, the certification of the actual climate footprint of projects financed with these bonds is gaining momentum among investors and policymakers. We investigate the informative content of Second Party Opinions (SPOs) issued by external reviewers to assess the quality of green bonds collecting a global sample of over 1200 corporate green bonds and matching
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Social trust and the choices to provide audited financial statements by private firms in emerging markets The British Accounting Review (IF 5.5) Pub Date : 2023-10-19 Nan-Ting Kuo, Cheng-Few Lee
Our study explores the association between social trust and private firms' choices to provide audited financial statements. By exploring an international sample from emerging markets, we find that private firms in countries with higher social trust are less likely to provide audited financial statements. This finding arises because social trust helps address contracting imperfections, substituting
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The impact of hedge fund activism on audit pricing The British Accounting Review (IF 5.5) Pub Date : 2023-10-09 Huimin (Amy) Chen, Bill B. Francis, Yinjie (Victor) Shen, Qiang Wu
The extant literature focuses on the economic effect of significant changes that activist hedge funds enact, but shows mixed findings about the effect on the information environment. We investigate the informational effect on the third party — namely, the auditor — and argue that the potential significant changes in target firms heighten the complexity and uncertainty of the information environment
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Determinants and consequences of sales/production report issuance The British Accounting Review (IF 5.5) Pub Date : 2023-10-06 Renhui Fu, Chen Ma, Yamin Zeng, Junsheng Zhang
This study empirically examines the determinants and consequences of firms’ issuance of sales/production reports. Our findings demonstrate that firms choose to issue these reports in order to meet the information needs of investors, supply chain participants, and industry peers. As a result, these firms experience higher firm value, attributed to improvements in the information environment, increased