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Integrated reporting (IR) aims to overcome the limitations of traditional reporting by merging financial information and sustainability data. Therefore, this paper aims to investigate whether IR quality is value-relevant for investors in the voluntary Asian context.

The study uses OLS regression to estimate the impact of IR quality on the market value of equity using data from Asian firms that prepare IR, presented on the International Integrated Reporting Council (IIRC) website for 2015–2022. The study uses content analysis to assess IR quality. Alternative measures of firm value, propensity score matching and instrumental variable estimation are used to validate the robustness of the main results.

The findings of this paper suggest that IR quality is value-relevant and has positive market reactions. Additional analyses show that the positive impact of IR quality is more salient for companies with high organizational complexity and high growth, and the impact is still significant during the COVID-19 pandemic period. Furthermore, the authors document that earnings quality and analyst forecast accuracy mediate the relationship between IR quality and market value.

The study has some limitations, primarily stemming from the relatively small sample size and the fact that the majority of the data represents Japan.

The findings of this study have implications for standard setters, governmental agencies interested in adopting IR, as well as investors and businesses about the effects of IR quality.

Most of the recent studies are concentrated on mandatory IR adoption in South Africa. This study is unique in concentrating on the value relevance of IR quality in the voluntary Asian context.

The purpose of this paper is to test the political costs hypothesis in emerging economies characterized by interventionist governments and weak protection of property rights. The paper uses executives’ political connection and state control to measure firms’ political costs.

Based on a sample of Tunisian firms, univariate and multivariate analyses are used to test whether firms’ political costs have any impact on earnings management.

The empirical analysis indicates that the executives’ political connection is not directly related to earnings management. However, the interaction between executives’ political connection and the state control affects the firm’s sensitivity to political pressure and its earnings management practices. More specifically, this study provides evidence that non-connected firms and state-controlled firms attempt to use accounting policies to decrease their earnings especially during periods of the former government when they had to face high political costs. This finding is robust to comparing means of political cost indicators between different groups. Indeed, private firms with political connection enjoy a significantly lower insurance right, tax and donations and grants compared to other firms.

This study provides empirical evidence for the specific application of accounting theory in emerging economies.

Political influence may be an important criterion that will be used by auditors and investors to appreciate and detect specific manipulations of accounting earnings. Similarly, regulators should be aware of the political factors effect on discretionary behavior of managers to provide appropriate rules and standards.

The study is a pioneer in proving that a firm’s size is not always a suitable measure of its political cost. It extends the accounting literature on the role of political economy in the application of the political costs hypothesis. This hypothesis is confirmed in emerging economies by providing new and significantly measure of firms’ political costs