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The purpose of this paper is to study whether and how owners’ preferences for CEO characteristics changed due to the 2008-2009 global financial crisis. The authors identify three fundamental success factors needed for companies to compete in the after-crisis environment, and the authors connect five CEO characteristics to such factors.

The authors rely on a hand-collected database to build a panel data of European CEOs for the 2010-2012 period.

The empirical results indicate that after 2009, CEOs of companies that were more severely hit by the crisis are significantly different compared to those of other companies. More specifically, they have a background in science or engineering; they have international experience; and they are remunerated to a higher extent through stock options. The results of this paper also indicate that only international experience had a positive and significant impact on financial performance.

The paper contributes to the stream of literature on CEO characteristics and owners’ identity, tackling the research theme from a dynamic rather than from a static perspective.

Integrated reporting (IR) provides integrated financial and nonfinancial information about companies based on the integrated thinking principle. This study aims to investigate how the cost of equity relates to IR disclosure and the impact of an effective legal system on this relationship. Effective legal system (“enforcement”) represents the strength of the legal system of a country. Although voluntary initiatives are essentially not based on regulations, the authors expect that the effective legal system will influence the implementation of such.

To test the study’s hypotheses, linear regressions were applied using the Thomson Reuters database to analyze 20,463 firm-year observations between 2010 and 2017. The treatment group comprised companies that adopted IR; using propensity score matching, the authors defined the control group. The authors adopted a research design based on difference-in-differences to compare the cost of the capital of treatment with the control group for the periods before and after the IR adoption.

The results indicate that IR disclosure is negatively related to the cost of equity, and this negative effect is more prevalent for companies operating in high-enforcement environments.

Cost of equity is not a directly observable variable, implying that the results are sensitive to changes in the parameters that are used to compute this term. The results can help companies looking for evidence of potential effective gains of adopting IR. They also help understand that discussions related to environment, social, and governance information are somehow incorporated by analysts and investors, and reflected in the cost of raising funds.

This study demonstrates how IR relates to the cost of equity considering a global sample of voluntary adopters. It also analyzes the impact of institutional factors on this relationship by using a robust method of analysis. The results support the argument that companies in a strong legal system are more likely to behave sustainably and to disclose this attitude. Additionally, they are pressured to implement proposals rather than just adopting an initiative as a label.

The purpose of this exploratory study is to investigate why and how public health agencies employed social media during coronavirus disease 2019 (COVID-19) outbreak to foster public engagement and dialogic accounting.

The authors analysed the official Facebook pages of the leading public agencies for health crisis in Italy, United Kingdom and New Zealand and they collected data on the number of posts, popularity, commitment and followers before and during the outbreak. The authors also performed a content analysis to identify the topics covered by the posts.

Empirical results suggest that social media has been extensively used as a public engagement tool in all three countries under analysis but – because of legitimacy threats and resource scarcity – it has also been used as a dialogic accounting tool only in New Zealand. Findings suggest that fake news developed more extensively in contexts where the public body did not foster dialogic accounting.

Public agencies may be interested in knowing the pros and cons of using social media as a public engagement and dialogic accounting tool. They may also leverage on dialogic accounting to limit fake news.

This study is one of the first to look at the nature and role of social media as an accountability tool during public health crises. In many contexts, COVID-19 forced for the first time public health agencies to heavily engage with the public and to develop new skills, so this study paves the way for numerous future research ideas.

This study aims to investigate the motivations behind the issuance of financial instruments with characteristics of equity (FICE), economic consequences associated with their issuance and accounting classifications based on a value-relevance approach.

Using a sample of 169 financial and nonfinancial firms from 10 jurisdictions that adopted International Financial Reporting Standards, the authors use a difference-in-differences econometric approach.

The findings reveal that FICE issuers are more leveraged companies with higher costs of equity and, in some cases, lower effective tax rates. This evidence corroborates the hypothesis that issuers of FICEs seek to increase their book values of equity (accounting treatment as equity) and, simultaneously, generate deductible expenses for tax purposes (tax treatment as liability).

This finding suggests that market participants do not treat these instruments as regular equity but rather as quasi-equity. The findings suggest that a binary classification of FICE as debt or equity may not be the accounting treatment that best represents the underlying economic substance of these contracts. Furthermore, this study reinforces the IASB indication regarding to increase the FICE disclosure to allow stakeholders to better understand the economic essence of these bonds.

This study assesses the economic outcomes and market evaluation of a specific type of FICE that has not been previously studied, which is similar to the examples provided by the IASB in their materials on the subject.

Previous literature provides mixed evidence about the effectiveness of a code of ethics in limiting managerial opportunism. While some studies find that code of ethics is merely window-dressing, others find that they do influence managers' behavior. The present study investigates whether the quality of a code of ethics decreases the cost of equity by limiting managerial opportunism.

In order to test the hypothesis, the authors perform an empirical analysis on a sample of US companies in the 2004–2012 period. The results are robust to a battery of robustness analyses that the authors performed in order to take care of endogeneity.

Empirical results indicate that a higher quality code of ethics is associated with a lower cost of equity. In other words, firms with a more comprehensive code of ethics and better-designed implementation procedures limit managerial opportunism and pay a lower cost of equity because they are perceived by investors to be less risky.

The authors contribute to the literature in two ways. First, by looking at the market reaction to the code of ethics, thus capturing all its indirect possible benefits and second, by measuring not only the existence but also the quality of a code of ethics. Based on the results, policymakers may choose to further promote codes of ethics as an effective corporate governance mechanism.

This paper aims to explore the role played by digital transformation (DT) in enabling continuous accounting (CA) and its impacts on intellectual capital (IC). In so doing, the paper provides momentum for the emerging trends of the DT movement in the field of accounting.

The analysis relies on the exploratory case study of Oracle, a multinational computer technology corporation that is constantly involved in DT processes. Data sources include semi-structured interviews and internal documentation.

The paper shows how CA is facilitated by DT, a process that allows collaborative relationships, learning and transparency. These activities contribute to IC empowerment through three main mechanisms: empowerment through dialogue, empowerment through learning and increased reliability of data.

The findings have practical implications by showing how DT applied to accounting provides a highly transparent way to collect, manage and analyze financial data, freeing time for high-value activities, optimizing decision-making processes and increasing IC.

DT and digital technologies have created new opportunities for companies – worldwide – to elaborate and communicate accounting information. The originality of this research derives from connecting DT to the relatively innovative topic of CA.

This study enables to critique the development of a sustainability strategy brand; integrated reports, sustainability reports, usage of safe internet and online learning skills to reduce inequalities and increase stakeholders’ values.

Digi Telecommunications (Digi) has been publishing annual sustainability reporting in line with Global Reporting Initiatives since 2009. Albern Murty, Chief Executive Officer (CEO) of Digi, the largest player in the mobile telecommunications industry in Malaysia by the number of subscribers, decided to establish a responsible business brand known as Yellow Heart in 2018 to better serve their stakeholders demand. There was a low stakeholder understanding of Digi’s sustainability efforts and societal impacts. Digi’s Sustainability department aspired to make Yellow Heart the best industry practice for continuous improvements by making Responsible Business commitment one of the main pillars of the company’s strategy and vision. Yellow Heart was linked to Sustainable Development Goals (SDG)10 on reducing inequalities by focusing on Digital Inclusion and Resilience to increase safe access opportunities, provide marginalized communities with opportunities to pursue interests in digital learning pathways and create a more sustainable digital future for all. The case study illustrates the sustainability management at Digi and the planned migration from sustainability reporting to integrated reporting to build trust in the business with all the stakeholders. The case dilemma involves the challenges that Philip Ling Oon Hun, the Head of the Sustainability, faced in deciding the SDGs to focus on and measuring and reporting their outcomes to contribute to the greater good, not only in pure business terms but also to society at large.

This case is appropriate for undergraduate or graduate-level programs in Accounting, Corporate Governance and Strategy Implementation.

Teaching notes are available for educators only.

CSS 1: Accounting and Finance.

This paper introduces the second part of a AAAJ special issue on accounting, accountability and management during the COVID-19 emergency. The authors analyse the themes that emerge from the second part of the special issue, which allows us to identify the diverse accounting and accountability practices across different geographical and organisational contexts. The authors also provide an overall picture of the contributions of the special issue, with insights into avenues of future research.

Building on the first part of the AAAJ special issue, the paper draws together and identifies additional emerging themes related to research into the COVID-19 pandemic and how it impacts accounting, accountability and management practices. The authors reflect on the contributions of the special issue to the interdisciplinary accounting research project.

The authors identify two macro-themes and outline their contributions to the accounting literature. The first deals with the changes and dangers of accounting and accountability practices during the pandemic. The second considers accountability practices in a broader sense, including reporting, disclosure and rhetorical practices in the management of COVID-19.

The paper shows the pervasive role of accounting and accountability in the unprecedented and indiscriminate health crisis of COVID-19. It highlights the important role of special issues in producing timely research that responds to unfolding events.

This paper contributes to current debates on the roles of accounting and accountability during COVID-19 by drawing together the themes of the special issue and identifying future interdisciplinary accounting research on the pandemic's aftermath.

European countries are likely to increasingly adopt integrated reporting (IR) voluntarily, after the 2014/95/EU Directive is revised and other initiatives are implemented. Therefore, the present study provides insights on the relevance of IR in voluntary contexts by exploring analysts' reactions to the release of integrated reports in diverse institutional settings.

Drawing on voluntary disclosure theory, a quantitative empirical research method is used to explore the moderating role of country-level institutional characteristics on the associations between voluntary IR release and analyst forecast accuracy and dispersion.

IR informativeness is not uniform in the voluntary context and institutional settings play a moderating role. IR release is associated with increased consensus among analyst forecasts. However, in countries with weak institutional enforcement, a reverse association is detected, indicating that analysts rely largely on IR where the institutional setting strongly protects investors. Although a strong institutional setting boosts the IR release usefulness in terms of accuracy, it creates noise in analyst consensus.

Academics can appreciate the usefulness of voluntary IR across the institutional enforcement contexts.

Managers can use these findings to understand opportunities offered by IR voluntary release. The study recommends that policymakers, standard setters and regulators strengthen the institutional enforcement of sustainability disclosure.

This study is a unique contribution to recent calls for research on the effects of nonfinancial disclosure regulation and on IR “impacts”. It shows on the international scale that IR usefulness for analysts is moderated by institutional patterns, not country-level institutional characteristics.