Prior studies show that accounting considerations related to executive compensation impact managerial incentives, which in turn can impact real investment. These studies, however…
Abstract
Purpose
Prior studies show that accounting considerations related to executive compensation impact managerial incentives, which in turn can impact real investment. These studies, however, largely omit the role of one key incentive: the duration of executive compensation. This study addresses this gap by examining the impact of accounting costs on duration. The findings have important implications not only for the determinants of duration but also the potential role duration plays in incentivizing corporate investment.
Design/methodology/approach
This study exploits a plausibly exogenous increase in the accounting cost of option compensation under accounting rule FAS 123R to determine the impact of accounting considerations on managerial incentives and particularly the duration of executive compensation. Heterogeneity in firm-level exposure to the rule is exploited under a difference-in-difference framework. The sample comprises S&P 500 firms for the years 2002–2008.
Findings
The analysis shows that under FAS 123R, which increased the accounting cost of option compensation, duration is impacted more for affected firms than are delta and vega, two other key incentives highlighted in the literature. While duration, delta and vega are all highly intertwined making disentangling the individual impact of each incentive difficult, cross-sectional evidence suggests changes in research and development (R&D) spending are more likely attributable to changes in duration rather than vega or delta.
Originality/value
The evidence in this study shows how accounting considerations shape managerial incentives, particularly duration, and provides new insights into the relationship between duration and R&D spending.
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John L. Campbell, Landon M. Mauler and Spencer R. Pierce
This paper provides a review of research on financial derivatives, with an emphasis on and comprehensive coverage of research published in 15 top accounting journals from 1996 to…
Abstract
This paper provides a review of research on financial derivatives, with an emphasis on and comprehensive coverage of research published in 15 top accounting journals from 1996 to 2017. We begin with some brief institutional details about derivatives and then summarize studies explaining when and why firms use derivatives. We then discuss the evolution of the accounting rules related to derivatives (and associated disclosure requirements) and studies that examine changes in these requirements over the years. Next, we review the literature that examines the consequences of firms’ derivative use to various capital market participants (i.e., managers, analysts, investors, boards of directors, etc.), with an emphasis on the role that the accounting and disclosure rules play in such consequences. Finally, we discuss the importance of industry affiliation on firms’ derivative use and the role that industry affiliation plays in derivatives research. Overall, our review suggests that, perhaps due to their inherent complexity and data limitations, derivatives are relatively understudied in accounting, and we highlight several areas where future research is needed.
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Jan de Vries and Albert Boonstra
The purpose of this paper is to develop and validate a model that demonstrates the influence of enterprise resource planning (ERP) implementation on the power and interests of…
Abstract
Purpose
The purpose of this paper is to develop and validate a model that demonstrates the influence of enterprise resource planning (ERP) implementation on the power and interests of actors at the production‐sales interface, and vice versa.
Design/methodology/approach
An empirical in‐depth longitudinal case study examines how a medium‐sized company in the graphics industry implemented an ERP system and how this has affected the interests and power distribution between the manufacturing and sales departments.
Findings
The case study reveals that the power division among key players at the production‐sales interface has been affected by the ERP implementation. These changes influence their attitudes and behaviours as well as the usage of the ERP system.
Research limitations/implications
Limitations are associated with the inherent weaknesses of any research based on a single‐case study: theoretical, but not statistical, generalisations are possible.
Practical implications
The findings imply that those implementing ERP systems in production‐sales environments should, from the outset of the project, identify potential changes in the division of power and seek to reconcile stakeholder interests.
Originality/value
This is one of the few studies that has examined in‐depth the potential effects of ERP implementation on power division at the production‐sales interface.
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This article looks at corporate social responsibility (CSR) as a discursive social practice that attempts to interrogate the global market economy and its neoliberal underpinnings…
Abstract
This article looks at corporate social responsibility (CSR) as a discursive social practice that attempts to interrogate the global market economy and its neoliberal underpinnings and that reflects as well as frames and shapes domestic and global politics and institutions. Drawing upon Karl Polanyi’s notions of reciprocity and redistribution while also emphasizing the normative content of the concept, the article inquires into the position that the CSR discourse occupies in addressing the corporate transnational risks derived from social tensions and conflicts and more generally, in answering social expectations for justice. The Polanyian perspective highlights the CSR discursive quest for a missing conceptual consistency and implicitly, for a constructive “critical” core. From this perspective, the article shows CSR to reside within controversial conceptual boundaries; a discursive social practice that engages with the social aspiration of embedding market economy in society while it is also in need of reclaiming its critical core and its potential for social change.
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This research uses structural .equation modeling to investigate the relationships between environmental uncertainty, budget communication, budget influence, budget goal commitment…
Abstract
This research uses structural .equation modeling to investigate the relationships between environmental uncertainty, budget communication, budget influence, budget goal commitment and managerial performance. To this end, data from 173 U.S. individual managers were used for the study. The results show that environmental uncertainty significantly affects both budget communication and budget influence which, in turn, impact budget goal commitment. Also, budget goal commitment is significantly related to managerial performance. Implications, limitations and directions for future research are discussed.
Alexandre Rambaud and Jacques Richard
This chapter gives in “Introduction to the Human Capital Issue” a critical analysis of the standard (economic) Human Capital (HC) theory, with the help of some “traditional”…
Abstract
Purpose
This chapter gives in “Introduction to the Human Capital Issue” a critical analysis of the standard (economic) Human Capital (HC) theory, with the help of some “traditional” (founding) accounting concepts. From this study, to avoid the accounting and social issues highlighted in “Introduction to the Human Capital Issue,” we present, in “The “Triple Depreciation Line” Model and the Human Capital,” the “Triple Depreciation Line” (TDL) accounting model, developed by Rambaud & Richard (2015b), and we apply it to “HC,” but viewed as genuine accounting capital – a matter of concern – that firms have to protect and maintain.
Methodology/approach
From a critical review of literature on HC theory, from the origin of this concept to its connection with sustainable development, this chapter provides a conceptual discussion on this notion and on the differences/common points between capital and assets in accounting and economics. Then, it uses a normative accounting model (TDL), initially introduced to extend, in a consistent way, financial accounting to extra-financial issues.
Findings
This analysis shows at first that the standard (economic) HC theory is based on a (deliberate) confusion between assets and capital, in line with a standard economic perspective on capital. Therefore, this particular viewpoint implies: an accounting issue for reporting HC, because “traditional” accounting capital and assets are clearly isolated concepts; and a societal issue, because this confusion leads to the idea that HC does not mean that human beings are “capital” (i.e., essential), or have to be maintained, even protected, for themselves. It only means that human beings are mere productive means. The application of the TDL model to an accounting redefinition of HC allows a discussion about some key issues involved in the notion of HC, including the difference between the standard and “accounting” narratives on HC. Finally, this chapter presents some important consequences of this accounting model for HC: the disappearance of the concept of wage and the possibility of reporting repeated (or continuous) use of HC directly in the balance sheet.
Research implications
This chapter contributes to the literature on HC and in general on capital and assets, by stressing in particular some confusions and misunderstandings in these concepts. It fosters a cross-disciplinary approach of these issues, through economic, accounting, and sustainability viewpoints. This analysis also participates in the development of the TDL model and the research project associated. It finally proposes another perspective, more sustainable, on HC and HC reporting.
Social implications
The stakes of HC are important in today’s economics, accounting, and sustainable development. The different conceptualizations of HC, and the narratives behind it, may have deep social and corporate implications. In this context, this analysis provides a conceptual, and practicable, framework to develop a more sustainable concept of HC and to enhance working conditions, internal business relations, integrated reporting. As an outcome of these ideas, this chapter also questions the standard corporate governance models.
Originality/value
This chapter gives an original perspective on HC, and in general on the concept of capital, combining an economic and an accounting analysis. It also develops a new way to report HC, using an innovative integrated accounting model, the TDL model.
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Mohammad Alta'any, Salah Kayed, Rasmi Meqbel and Khaldoon Albitar
Drawing on signalling and impression management theories, this study aims to examine a bidirectional association between managerial tone in earnings conference calls and financial…
Abstract
Purpose
Drawing on signalling and impression management theories, this study aims to examine a bidirectional association between managerial tone in earnings conference calls and financial performance.
Design/methodology/approach
The sample includes non-financial firms listed in the FTSE 350 index during the period 2010–2015. Managerial tone was measured using positive and negative keywords based on the Loughran-McDonald Sentiment Word Lists, while return on assets was used as a proxy for firms’ financial performance.
Findings
The findings indicate that current financial performance positively affects the managerial tone in earnings conference calls. Likewise, the results also show that there is a positive relationship between managerial tone in earnings conference calls and firms’ future financial performance.
Practical implications
The results have important implications for top management to use more virtual communication media (i.e. earnings conference calls) to continue managing their relationships with financial stakeholders and helping them better understand financial performance, especially in countries where holding such calls is not yet part of firms’ policy.
Originality/value
To the best of the authors’ knowledge, this is one of the first studies that explore the relationship between managerial tone in earnings conference calls and financial performance. Overall, this study contributes to managerial tone literature and holds significant theoretical and practical implications.
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The objective of this study was to extend prior research by examining subordinate–superior information asymmetry as an intervening variable linking budgetary participation and…
Abstract
The objective of this study was to extend prior research by examining subordinate–superior information asymmetry as an intervening variable linking budgetary participation and slack. The results indicate two offsetting effects of participation on slack. A significant negative indirect relation between participation and slack was found to act through information asymmetry. Thus, managers reveal private information during the budget process, reducing information asymmetry which subsequently reduces budget slack. These results provide evidence about the inability of past research to confirm a consistent direct relation between budget participation and budget slack.
Emily P. Jones, Nandita S. Mani, Rebecca B. Carlson, Carolyn G. Welker, Michelle Cawley and Fei Yu
The objective of this study is to establish the current state of library and information science (LIS) scholarship pertaining to anti-racism, equity, inclusion and social justice…
Abstract
Purpose
The objective of this study is to establish the current state of library and information science (LIS) scholarship pertaining to anti-racism, equity, inclusion and social justice initiatives.
Design/methodology/approach
Using comprehensive search strategies, three LIS databases were searched for relevant literature published in the last 10 years and results were exported and de-duplicated using Endnote. Citations were screened by two blinded, independent reviewers based on pre-defined eligibility criteria. Citations in the final data set were then hand coded by three reviewers using deductive coding. Subject terms for all citations were categorized and consolidated to identify major themes across the corpus of included publications. Results were analyzed using bibliometrics and thematic analysis.
Findings
A total of 691 unique citations were included in this analysis based on inclusion criteria. Publication productivity has generally increased from 2011 to 2020; findings show publications from 170 source titles and 944 authors representing 33 countries. Prevalent themes included access to information, multiculturalism and social justice. Various populations groups, areas of LIS practice, library types and social justice topics have been addressed in the literature. Over 15% of citations focused on anti-racism efforts in LIS.
Originality/value
This study applied both bibliometric and thematic approaches to analyzing LIS literature at macro and micro levels regarding anti-racism, equity, inclusion and social justice.