Marsha B. Keune, Timothy M. Keune and Linda A. Quick
Voluntary changes in accounting principle represent explicit and fundamental decisions by managers to exercise accounting discretion. This paper develops an organizing framework…
Abstract
Voluntary changes in accounting principle represent explicit and fundamental decisions by managers to exercise accounting discretion. This paper develops an organizing framework to review prior literature on voluntary changes, provides descriptive insights on contemporary changes, and identifies opportunities for future research on voluntary changes. The voluntary change literature is robust and has examined many questions using data prior to the Sarbanes-Oxley Act of 2002 (SOX). We find that contemporary voluntary changes often vary across the pre-SOX, post-SOX, and post-SFAS No. 154 periods by the materiality of their income effect, issue type, and justifications provided by managers, suggesting that manager use of voluntary changes has evolved over time. Our future research opportunities consider potential determinants of voluntary changes including strategic incentives, environmental conditions, and manager characteristics, as well as the potential direct or moderating role of corporate governance and auditors on manager use of voluntary changes. They also consider user reactions to voluntary changes. By providing insight into both extant voluntary change research and the contemporary use of voluntary changes, our study informs standards setters who grant managers the ability to exercise this form of accounting discretion, as well as researchers who plan to study accounting choice through voluntary changes.
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S.P. Bandyopadhyay, A.S. Hilton and G.D. Richardson
Explains that Canada is currently deciding whether to harmonize with US or international accounting standards and whether to allow Canadian SEC registrants to file their financial…
Abstract
Explains that Canada is currently deciding whether to harmonize with US or international accounting standards and whether to allow Canadian SEC registrants to file their financial statements using US standards, outlines previous research on the information content of US/Canadian differences and tests the relative and incremental information content of 156 interlisted firms 1996‐1998. Explains the methodology and presents the results, which suggest that there is little difference in the relative information content of the two sets of standards although each provides information incremental to the other. Concludes that investors will not be harmed either by harmonization or by allowing financial reporting under US standards.
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Yosra Fourati Makni, Anis Maaloul and Rabeb Dabbebi
The purpose of this paper is to investigate the determinants of tax-haven use of publicly listed Canadian firms.
Abstract
Purpose
The purpose of this paper is to investigate the determinants of tax-haven use of publicly listed Canadian firms.
Design/methodology/approach
Based on alternative measures of tax havens (TH) and referring to a sample of 235 Canadian firms over the period of 2014–2015, probit-regression analyses are used to examine the determinants of tax-haven use.
Findings
The authors provide evidence that multinationality, intangible assets, thin capitalization, withholding taxes, equity-based management remuneration and tax fees paid to auditing firms are positively associated with TH use. Furthermore, the authors show that the variable relating to R&D intensity is positively associated with TH use. The authors also document that strong corporate-governance structures are negatively associated with TH use.
Research limitations/implications
This study is only limited to Canadian firms, so the results may not be generalizable to other countries.
Practical implications
The results may assist tax watchdogs in their efforts to understand the tax behavior held by Canadian firms. They may also be interesting for tax authorities in planning enforcement activities.
Originality/value
This study uses a sample from publicly listed financial and non-financial firms. It also uses various lists of TH published by various competent sources (IMF, 2000, 2007; TJN, 2005; OECD, 2012). The findings corroborate the recent media attention about the extensive use of TH by Canadian firms.
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Hank C. Alewine and Dan N. Stone
The increasing use of complex, nonfinancial environmental performance measures in managerial decisions motivates consideration of contextual influences that potentially impact…
Abstract
The increasing use of complex, nonfinancial environmental performance measures in managerial decisions motivates consideration of contextual influences that potentially impact managerial judgments in environmental settings. This study extends general evaluability theory (GET: Hsee & Zhang, 2010) to environmental accounting by investigating the combined effects of evaluation mode and incomplete supplemental evaluability information (SEI; e.g., benchmark data) on management decisions. To elaborate, evaluation mode is the display format in which the accounting information system (AIS) provides available information for analysis; e.g., a manager’s or business unit’s performance is assessed either comparatively (i.e., in joint mode) or individually (i.e., in separate mode). GET suggests more decision weight on measures containing SEI in separate mode because that evaluation mode contains less context in which to analyze information. On the other hand, more decision weight should result for measures that do not contain SEI in joint mode because that mode already contains more context for analysis (e.g., comparing multiple performances with each other). To test these predictions, experimental participants (n = 53) evaluated environmental measures for factories with similar environmental performances. To operationalize the information available in many environmental AIS, some, but not all, performance measures contained benchmark data (incomplete SEI); factories were evaluated either jointly or separately. Participants evidenced decision intransitivity; i.e., in separate evaluation mode, factories rated higher when a favorable measure contained SEI, while in joint evaluation mode, factories rated higher when a favorable measure lacked SEI. The results extend previous AIS and management accounting research by investigating contextual influences, and potential systems design elements, in judgments using environmental AIS.
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Rodrigo de Souza Gonçalves, Otávio Ribeiro de Medeiros, Elionor Farah Jreige Weffort and Jorge Katsumi Niyama
This study is aimed at developing and validating an index designed to measure the level of social disclosure of external social programs of firms listed on the Brazilian stock…
Abstract
Purpose
This study is aimed at developing and validating an index designed to measure the level of social disclosure of external social programs of firms listed on the Brazilian stock market.
Methodology/Approach
The index of social disclosure is composed of 13 items distributed in three dimensions: past information, prospective actions, and accessibility. Its validation involved: (a) pre-test, (b) analysis by referees, (c) exploratory factor analysis, (d) Cronbach’s alpha test, and (e) final validation. The sample is composed of 83 Brazilian firms listed on the Brazilian Stock Exchange from 2005 to 2009.
Findings
The index presented robustness in all validation stages. It was found that size, industry sector, internationalization, auditing, and listing on social responsible investment funds are decisive factors for increasing the level of social disclosure.
Research Limitations
The index of social disclosure evaluates external social programs only. Hence, some types of social information are not captured, such environmental ones. Besides, the sources of information for the index are restricted to annual and sustainability reports, so that information from other sources, such as official announcements and company websites, are not captured.
Social Implications
The social disclosure index developed can be useful to analysts and investors assessing listed firms, as well as to financial-market regulators defining policies applicable to the disclosure of corporate social information.
Originality/Value
(a) Construction of a social disclosure index validated and tested in Brazilian firms, which is liable to replication; (b) Utilization of a representative sample of firms listed on an important emerging stock market.
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Etiënne A. J. A. Rouwette and L. Alberto Franco
This chapter focuses on techniques and technologies to aid groups in making decisions, with an emphasis on computer-based support. Many office workers regularly meet colleagues…
Abstract
This chapter focuses on techniques and technologies to aid groups in making decisions, with an emphasis on computer-based support. Many office workers regularly meet colleagues and clients in virtual meetings using videoconferencing platforms, which enable participants to carry out tasks in a manner similar to a face-to-face meeting. The development of computer-based platforms to facilitate group tasks can be traced back to the 1960s, and while they support group communication, they do not directly support group decision making. In this chapter we distinguish four technologies developed to provide support to group decisions, clustered into two main traditions. Technologies in the task-oriented tradition are mainly concerned with enabling participants to complete tasks to solve the group's decision problem via computer-supported communications. Group Decision Support Systems and social software technologies comprise the task-oriented tradition. Alternately, in the model-driven tradition, participants use computers to build and use a model that acts as a referent to communicate, mostly verbally, about the group's decision problem. System modeling and decision-modeling technologies constitute the model-driven tradition. This chapter sketches the history and guiding ideas of both traditions, and describes their associated technologies. The chapter concludes with questioning if increased availability of online tools will lead to increased use of group decision support technologies, and the differential impact of communication support versus decision support.
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Lijo John, Wojciech D. Piotrowicz and Aino Ruggiero
The impact of COVID-19 on the lives of people and businesses across the globe was devastating. While governments across the world had undertaken a slew of measures to control the…
Abstract
The impact of COVID-19 on the lives of people and businesses across the globe was devastating. While governments across the world had undertaken a slew of measures to control the spread of the COVID-19 virus within their geography, many of these measures had long and unintended consequences. The restrictions imposed by the governments on the movement of people and goods across the world brought supply chains to a grinding halt. This study identifies the cascading effects of supply chain disruptions (SCDs) on the energy sector and thereby on the security of supply of energy from a European Union perspective. Since these systems are closely integrated and the impact of COVID-19 needs to be analysed at a much broader level, this study uses a systems-thinking approach to study the effect of SCDs on energy services. The study develops a causal loop model to gain further insight into how SCDs caused by COVID-19 affected the coping capabilities of society and how critical services were affected. Furthermore, the study puts forth certain policy recommendations for both businesses and governments to prepare for and protect against a similar situation in the future.
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Gabriel Sam Ahinful and Venancio Tauringana
The chapter investigates the relationship between environmental management practices (EMPs) and financial performance (FP).
Abstract
Purpose
The chapter investigates the relationship between environmental management practices (EMPs) and financial performance (FP).
Design/Methodology/Approach
The study is based on a sample of 187 SMEs and uses data on six EMPs (energy, water, waste, material, emissions, and biodiversity) collected through a self-administered questionnaire from owner-managers of SMEs. Ordinary least squares regression is employed to model the hypothesized paths.
Findings
The results suggest a positive and significant relationship between EMPs (energy, water, and material) and FP. There is also a significant positive relationship between an aggregate EMP measure and FP. However, other EMPs (waste, emissions, and biodiversity) are not significantly associated with FP. Overall, these results provide empirical support to the mostly normative suggestion that the conflicting results on the environmental management and financial performance relationship are partly due to the EMP measure used.
Research Limitations/Implications
The study is based on cross-sectional data, and therefore, it is impossible to determine any changes over time. Longitudinal studies could help confirm the relationship between EMP and FP over a longer period. From a policy perspective, this results mean that the Ghanaian EPA must monitor more closely for violations of laws and regulations relating to waste, emissions, and biodiversity since SMEs do not have incentives to manage these impacts without commensurate return.
Originality/Value
The study contributes by documenting evidence of the relationship between multiple measures of EMP and FP. This unlike most existing studies has enabled us to report evidence of how each EMP measure affects FP differently and where win–win opportunities are for SMEs. Thus, the win–win opportunities are associated with some EMP measures but not all.