Fernando Comiran, Tatiana Fedyk and Joohyung Ha
This paper aims to investigate how media coverage affects the quality of accounting information for seasoned equity offering (SEO) firms.
Abstract
Purpose
This paper aims to investigate how media coverage affects the quality of accounting information for seasoned equity offering (SEO) firms.
Design/methodology/approach
The sample includes SEOs completed between January 1993 and December 2014 in the USA that are available from Thomson Financial’s Securities Data Company. The FactSet database was used to measure the amount of media coverage. The paper considers two types of earnings management: accrual-based earnings management and real earnings management.
Findings
This study finds that the media serves as a watchdog for real earnings management but does not affect accrual manipulations. These findings hold when endogenous factors affecting firms’ earnings management choices are controlled for and also when alternative time windows for media coverage are examined.
Originality/value
This paper is the first to demonstrate that media attention affects the quality of accounting information during equity offerings, as it successfully reduces real earnings management.
Details
Keywords
Ahmad Hammami and Mohammad Hendijani Zadeh
The purpose of this study is twofold: first, to introduce two determinants of environmental, social and governance (ESG) disclosure transparency, namely, audit quality and public…
Abstract
Purpose
The purpose of this study is twofold: first, to introduce two determinants of environmental, social and governance (ESG) disclosure transparency, namely, audit quality and public media exposure; and second, to investigate the impact of ESG transparency on firm-level investment efficiency.
Design/methodology/approach
Ordinary least square (OLS) regressions are applied to explore the relationship between the two variables of interest (audit quality and public media exposure) and ESG transparency on a sample of publicly listed Canadian firms during the period 2008 to 2017. Then, an econometric model is used to investigate the association between ESG transparency and investment efficiency under two identified scenarios, under-investment and over-investment.
Findings
Results show that audit quality and public media exposure are two main drivers of ESG transparency, hence, commitment to high-quality audits and exposure to high public media coverage drive firms to disclose more extensive and transparent ESG information. The authors also find a negative association between ESG transparency and firm-level investment inefficiency. Thus, ESG transparency generates influential incremental information that helps mitigate the information asymmetry between firms and stakeholders while fostering better resource allocation through investment efficiency.
Originality/value
This study contributes to the corporate social responsibility (CSR) and ESG literature by identifying audit quality and public media exposure as two determinants of ESG transparency; and by noting that higher ESG transparency has a significant economic effect on capital investment decisions through higher firm-level investment efficiency.