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Available. Open Access. Open Access
Article
Publication date: 27 January 2023

Fredrik Hartwig, Emil Hansson, Linn Nielsen and Patrik Sörqvist

The purpose of this study is to examine the relationship between auditing/non-auditing and accounting timeliness among Swedish private firms.

1837

Abstract

Purpose

The purpose of this study is to examine the relationship between auditing/non-auditing and accounting timeliness among Swedish private firms.

Design/methodology/approach

This paper uses regression analysis to test the relationship between auditing and two measurements of timeliness; lead time and late filing. The sample consists of Swedish private firms.

Findings

This paper finds that audited firms, when compared with unaudited firms, are significantly less timely. Moreover, greater profitability was associated with more timeliness but only for audited firms. The results of this paper also show that firms being audited by a big 4 auditor are significantly timelier than firms being audited by a non-big 4 auditor.

Practical implications

The findings in this paper suggests that one aspect of accounting quality, timeliness, does not seem to benefit from auditing in a Swedish context. There is a debate about whether the threshold levels in Sweden should be raised so that more firms voluntarily can opt out of audit. Those opposing a raised threshold level claim that auditing has positive effects on accounting quality and consequently that a raised level would have adverse effects. The findings in this paper do not support such a claim.

Originality/value

Little is known about timeliness in private firms compared to public firms and this paper fills that void. Contrary to prior research, findings show that unaudited firms in a Swedish regulatory setting actually are timelier than their audited counterparts. This questions one of the (presumed) benefits of auditing and should stimulate more research on this issue.

Details

Journal of Financial Regulation and Compliance, vol. 31 no. 3
Type: Research Article
ISSN: 1358-1988

Keywords

Available. Open Access. Open Access
Article
Publication date: 1 November 2024

Asif M. Huq and Mahsa Mohammadrezaei

The purpose of the review is to synthesize the research on materiality measures of sustainability reporting and highlight how preparers, users, auditors, regulators and other…

635

Abstract

Purpose

The purpose of the review is to synthesize the research on materiality measures of sustainability reporting and highlight how preparers, users, auditors, regulators and other stakeholders assess or determine the materiality in sustainability reporting. The review further summarizes the findings on consequences and determinants of material disclosures in sustainability reporting. Several directions for future research are also discussed.

Design/methodology/approach

This study provides a systematic review of materiality measures developed in the context of sustainability reporting. This synthesis of the literature summarizes the existing methodologies of measuring materiality. It also evaluates the strength and limitations of existing methods and approaches of measuring materiality in sustainability disclosures.

Findings

We find that the ex post materiality measures are simplistic and unidirectional in nature and ex ante materiality measures lack external validity and are generally narrow in focus – for example, focused on single firms or industries. Another major limitation in the current literature is the absence of robust empirical investigation of double materiality in sustainability reporting and a vast majority of the measures are developed without stakeholder engagement. Lastly, we document that the findings on determinants of material disclosure are fragmented and inconclusive and that the literature on consequences of material disclosure is rather un-explored.

Originality/value

The study explains the connections and differences between the various materiality measures. We document that materiality is measured in two distinct ways, ex ante and ex post and often times without stakeholder engagement. Moreover, given that a vast majority of the measures rely on manual content analysis, we find that they suffer from reproducibility and scalability.

Details

Journal of Accounting Literature, vol. 47 no. 5
Type: Research Article
ISSN: 0737-4607

Keywords

Available. Open Access. Open Access
Article
Publication date: 16 August 2021

ABM Fazle Rahi, Ruzlin Akter and Jeaneth Johansson

The purpose of this study is to explore the impact of sustainability (environmental, social and governance or ESG) practices on the financial performance (FP) of the Nordic…

18611

Abstract

Purpose

The purpose of this study is to explore the impact of sustainability (environmental, social and governance or ESG) practices on the financial performance (FP) of the Nordic financial industry.

Design/methodology/approach

The study covers a sample selection of observations for a total of 152 firm-years for 39 financial companies within the Nordic region (Sweden, Denmark, Finland and Norway) for the business years including 2015–2019. Data regarding ESG and FP indicators were extracted from the Thomson Reuters Eikon database in July 2020. This is a quantitative study using regression and a generalized method of moments.

Findings

Using static and dynamic estimators, the authors found both positive and negative impacts of sustainability practice on FP. The authors identified a negative relationship between ESG practices and FP (return on invested capital, return on equity and earnings per share). The authors identified a positive relationship between governance and return on assets.

Originality/value

A key contribution to the accounting literature is the finding that there is a risk for financial firms in adopting sustainability practices, as they follow a logic that contradicts the purely economic rationale. On the other hand, the positive relationship between governance and FP helps not only companies but also regulators and researchers to understand the positive impact of a good governance structure.

Details

Accounting Research Journal, vol. 35 no. 2
Type: Research Article
ISSN: 1030-9616

Keywords

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