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Volume 18
Issue 5
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J. Risk Financial Manag., Volume 18, Issue 5 (May 2025) – 64 articles

Cover Story (view full-size image): This study examines the impact of the COVID-19 pandemic on market efficiency on stocks (the DAX, Nikkei 225, SSE, and Volatility Index) and cryptocurrencies (Bitcoin and Ethereum) by analyzing price returns, absolute returns, and volatility increments. The effects vary across asset classes. In stocks, the pandemic influenced the Hurst exponent of returns and absolute returns but not volatility increments (except in the SSE, where returns remained unchanged). In cryptocurrencies, while the Hurst exponent remained unaffected, multifractality in returns and absolute returns was impacted. Some Hurst exponent time series exhibited a gradual decline, complicating assessments of pandemic-related effects. Consequently, period-based segmentation may misrepresent the effects, highlighting the need for careful methodological approaches. View this paper
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15 pages, 339 KiB  
Essay
Student and Practitioner Cheating: A Crisis for the Accounting Profession
by Donald L. Ariail, Lawrence Murphy Smith and Amine Khayati
J. Risk Financial Manag. 2025, 18(5), 285; https://doi.org/10.3390/jrfm18050285 - 21 May 2025
Viewed by 511
Abstract
In this essay, we propose that the prevalence of cheating by accounting students and serial cheating by accounting practitioners at Big-4 accounting firms are related. Our model of this problem suggests that students who cheat in school become practitioners who cheat in practice, [...] Read more.
In this essay, we propose that the prevalence of cheating by accounting students and serial cheating by accounting practitioners at Big-4 accounting firms are related. Our model of this problem suggests that students who cheat in school become practitioners who cheat in practice, and practitioners, in turn, model dishonest behavior for students. We propose that this vicious cycle of dishonesty poses a threat to the public’s trust in the accounting profession, and this crisis calls for drastic measures, both in academia and in practice, akin to measures like the Sarbanes–Oxley Act of 2002. As an honorable profession, dishonesty cannot be tolerated. Brief overviews of the prevalence of cheating, both by students and by Big-4 accounting practitioners are presented. Suggestions are included for a three-prong approach by accounting stakeholders to reduce this egregious ethical problem—a problem that, we suggest, is causing a new crisis in confidence for the accounting profession. Full article
(This article belongs to the Special Issue Accounting Ethics and Financial Management)
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20 pages, 307 KiB  
Article
Bullwhip Effect in Supply Chains and Cost Rigidity
by Hakjoon Song and Daqun Zhang
J. Risk Financial Manag. 2025, 18(5), 284; https://doi.org/10.3390/jrfm18050284 - 21 May 2025
Viewed by 521
Abstract
The bullwhip effect is the phenomenon of distorted information that causes the amplification of variability of demand in supply chains. We examine the relationship between the bullwhip effect and cost behavior using a large sample of U.S. public firms from 1980 to 2019. [...] Read more.
The bullwhip effect is the phenomenon of distorted information that causes the amplification of variability of demand in supply chains. We examine the relationship between the bullwhip effect and cost behavior using a large sample of U.S. public firms from 1980 to 2019. Our empirical results show that the costs of firms with a higher intensity of bullwhip effect are significantly more responsive to changes in sales, suggesting that firms facing higher amplification of demand will adopt a less rigid short-term cost structure with lower fixed and higher variable costs. Furthermore, the bullwhip effect is associated with a higher elasticity of number of employees, operating leases, and rental expenses with respect to sales. The findings of mediation analyses suggest that firms are likely to lease capacity resources to increase the flexibility and manage the operating risk associated with the bullwhip effect. The results are robust to alternative model specifications. This study contributes to both the cost accounting and supply chain management literature, and documents large sample evidence on whether and how the bullwhip effect affects a firm’s choice of cost structure. Full article
(This article belongs to the Special Issue Innovations and Challenges in Management Accounting)
21 pages, 683 KiB  
Article
Assessing the Relative Financial Literacy Levels of Micro and Small Entrepreneurs: Preliminary Evidence from 13 Countries
by Nikolaos Daskalakis
J. Risk Financial Manag. 2025, 18(5), 283; https://doi.org/10.3390/jrfm18050283 - 20 May 2025
Viewed by 372
Abstract
This study analysed the financial literacy (FL) levels of micro and small entrepreneurs (MSMEs) across 13 countries using data from the 2021 OECD/INFE survey. Focusing on the three core aspects of financial literacy—knowledge, behaviour, and attitudes—our analysis reveals that FL levels tend to [...] Read more.
This study analysed the financial literacy (FL) levels of micro and small entrepreneurs (MSMEs) across 13 countries using data from the 2021 OECD/INFE survey. Focusing on the three core aspects of financial literacy—knowledge, behaviour, and attitudes—our analysis reveals that FL levels tend to vary by enterprise size, with small businesses generally scoring higher than micro-enterprises. Moreover, countries’ performances differ across the three FL aspects, and these differences appear to be component rather than country-specific. This study applied the standardised OECD/INFE methodology, enabling cross-country comparisons of MSME financial literacy. The results identify specific strengths and weaknesses across countries and FL components, providing valuable insights into policy design and educational interventions. For instance, while financial behaviour scores are relatively strong, financial attitude scores are consistently lower, indicating a gap that requires targeted attention. Full article
(This article belongs to the Special Issue The Role of Financial Literacy in Modern Finance)
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28 pages, 363 KiB  
Article
Empirical Asset Pricing Models for Green, Grey, and Red EU Securities: A Fama–French and Carhart Model Approach
by Ferdinantos Kottas
J. Risk Financial Manag. 2025, 18(5), 282; https://doi.org/10.3390/jrfm18050282 - 19 May 2025
Viewed by 470
Abstract
This study examines the explainability, validity, and applicability of multi-factor models in explaining the returns of Green (eco-friendly), Grey (neutral), and Red (environmentally harmful) EU securities. We apply the Fama–French three-factor and five-factor models, along with the Carhart four-factor model, to analyze changes [...] Read more.
This study examines the explainability, validity, and applicability of multi-factor models in explaining the returns of Green (eco-friendly), Grey (neutral), and Red (environmentally harmful) EU securities. We apply the Fama–French three-factor and five-factor models, along with the Carhart four-factor model, to analyze changes in risk exposures and adjusted abnormal returns (alphas) before and after the 2009 global financial crisis (GFC). Green and Grey securities exhibit positive SMB loadings, while Grey’s HML shifts from negative to positive over time. Both Green and Red securities show positive SMB and HML factors but negative alphas in the second period, indicating systematic underperformance. Additionally, for Red assets, momentum (MOM), profitability (RMW), and investment (CMA) factors are positive and significant in the first period but become insignificant or negative later. These findings highlight structural shifts in factor exposures and contribute to the ongoing debate on the most suitable classical asset pricing framework for environmentally classified assets, offering insights into the effectiveness of traditional factor models in different classes of environmental assets in finance. Lastly, the three-factor model better captures the common variation in Green and Grey asset returns. Specifically, the 4-factor model and the HML Devil factor prove to be more effective in explaining returns for Red securities. Full article
(This article belongs to the Special Issue Bridging Financial Integrity and Sustainability)
22 pages, 1775 KiB  
Article
A Hybrid Forecasting Model for Stock Price Prediction: The Case of Iranian Listed Companies
by Fatemeh Keyvani, Farzaneh Nassirzadeh, Davood Askarany and Ehsan Khansalar
J. Risk Financial Manag. 2025, 18(5), 281; https://doi.org/10.3390/jrfm18050281 - 19 May 2025
Viewed by 548
Abstract
This paper introduces advanced computational methods for stock price prediction, integrating Fast Recurrent Neural Networks (FastRNN) with meta-heuristic algorithms such as the Horse Herd Optimization Algorithm (HOA) and the Spotted Hyena Optimizer (SHO). By challenging the Efficient Market Hypothesis (EMH) and Random Walk [...] Read more.
This paper introduces advanced computational methods for stock price prediction, integrating Fast Recurrent Neural Networks (FastRNN) with meta-heuristic algorithms such as the Horse Herd Optimization Algorithm (HOA) and the Spotted Hyena Optimizer (SHO). By challenging the Efficient Market Hypothesis (EMH) and Random Walk Hypothesis, our research demonstrates the effectiveness of these hybrid models in semi-strong or weak-form efficient markets. The study leverages data from five listed Iranian companies (2011–2021) and 25 factors encompassing technical, fundamental, and economic considerations. Our findings highlight the superior accuracy of the FastRNN optimised by HOA, SHO, and a Generative Adversarial Network (GAN) in forecasting stock prices compared to conventional FastRNN models. This research contributes to the multidisciplinary field of computational economics, emphasising advanced computing capabilities to address complex economic problems through innovative econometrics, optimisation, and machine learning approaches. Full article
(This article belongs to the Special Issue Innovations and Challenges in Management Accounting)
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19 pages, 320 KiB  
Article
Market Competition, Downward-Sticky Pay, and Stock Returns: Lessons from South Korea
by Jungho Cho, Daecheon Yang, Kyeongmin Baek and Yeju Bu
J. Risk Financial Manag. 2025, 18(5), 280; https://doi.org/10.3390/jrfm18050280 - 19 May 2025
Viewed by 374
Abstract
This study examines whether market competition reduces managerial slack under downward-sticky CEO pay schemes, thus mitigating the potentially negative link between downward-sticky pay and shareholder’s value. Using data on the Korean product market, which has been dominated by business conglomerates known as ‘chaebols’, [...] Read more.
This study examines whether market competition reduces managerial slack under downward-sticky CEO pay schemes, thus mitigating the potentially negative link between downward-sticky pay and shareholder’s value. Using data on the Korean product market, which has been dominated by business conglomerates known as ‘chaebols’, we first find that downward-sticky pay is prevalent in underperforming firms and affects shareholder value negatively. Then, we find that a higher level of market competition alleviates the value-deteriorating effect of downward-sticky pay. Overall, the findings from our study imply that market competition as an external mechanism of corporate governance threatens still highly paid CEOs with worsening performance and motivates them implicitly to work harder. Together with a need for shareholders’ influence on downward-sticky pay, this study sheds light on the importance of market competition regimes in developing countries where legal protection for shareholders and internal governance structures are weak. Full article
(This article belongs to the Special Issue Financial Reporting Quality and Capital Markets Efficiency)
19 pages, 1792 KiB  
Article
Rethinking Tax Systems: How Heterogeneous Tax Mix Shapes Income Inequality in European OECD Economies
by Marina Beljić and Olgica Glavaški
J. Risk Financial Manag. 2025, 18(5), 279; https://doi.org/10.3390/jrfm18050279 - 17 May 2025
Viewed by 348
Abstract
Divergences in tax policies are evident among European OECD economies, due to varying priorities of efficiency vs. equity, influenced by the forms of direct vs. indirect taxation. The special interest of this paper is to identify how different tax forms (direct—corporate and personal [...] Read more.
Divergences in tax policies are evident among European OECD economies, due to varying priorities of efficiency vs. equity, influenced by the forms of direct vs. indirect taxation. The special interest of this paper is to identify how different tax forms (direct—corporate and personal income taxes (CIT, PIT); and indirect—value added tax (VAT)) affect inequality in European OECD economies in the period 2003–2020. Using heterogeneous non-stationary panel models and the (Pooled) Mean Group (PMG/MG) methods of estimation, a long-run negative relationship between direct tax forms (CIT, PIT) and the Gini coefficient was discovered, meaning that utilizing progressive direct tax forms resulted in more equity. The error-correction terms are heterogeneous, showing that developed economies decrease income inequality by using direct taxes more efficiently than emerging European OECD economies. The short-run statistically significant relationships between VAT and the Gini coefficient are discovered, meaning that certain European OECD economies effectively use VAT revenue to achieve greater equity in society. This study demonstrates that the use of indirect tax forms may be beneficial in terms of collecting more tax revenues, and that using them for redistributive programs can reduce inequality while maintaining economic efficiency. Full article
(This article belongs to the Special Issue Emerging Issues in Economics, Finance and Business—2nd Edition)
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23 pages, 357 KiB  
Article
Corporate Social Responsibility as a Driver of Financial Performance: An Exploration of South African Companies
by Phathutshedzo Lemana, Reon Matemane and Maatabudi Mokabane
J. Risk Financial Manag. 2025, 18(5), 278; https://doi.org/10.3390/jrfm18050278 - 17 May 2025
Viewed by 662
Abstract
This study investigates the relationship between corporate social responsibility performance and financial performance among firms listed on the Johannesburg Stock Exchange in South Africa. Utilising a multi-metric approach, the research incorporates corporate social responsibility scores; environmental, social, and governance ratings; and the social [...] Read more.
This study investigates the relationship between corporate social responsibility performance and financial performance among firms listed on the Johannesburg Stock Exchange in South Africa. Utilising a multi-metric approach, the research incorporates corporate social responsibility scores; environmental, social, and governance ratings; and the social pillar score to provide a comprehensive analysis. Data from 104 companies with 624 observations from 2017 to 2022 was analysed. This quantitative study employs a Generalised Least Squares estimation, and the findings reveal a significant positive correlation between corporate social responsibility performance and several key financial metrics, including return on assets, earnings per share, market value added, and Tobin’s Q ratio. The results suggest that companies prioritising corporate social responsibility initiatives are likely to experience improved financial outcomes. Furthermore, the study examines the influence of board characteristics on financial performance, identifying a positive effect of gender diversity and negative impacts from board independence and meeting frequency. Overall, this research contributes to the literature on corporate social responsibility and financial performance by highlighting the importance of corporate social responsibility in driving sustainable business practices and enhancing firm performance within the context of an emerging economy. The findings underscore the need for firms to integrate corporate social responsibility into their strategies to promote long-term success while addressing societal challenges. Full article
(This article belongs to the Special Issue Financial Management)
20 pages, 652 KiB  
Article
An Innovative Digital Platform for Socioeconomic Forecasting Climate Risks and Financial Management
by Bruno S. Sergi, Elena G. Popkova, Elena Petrenko, Shakhlo T. Ergasheva, Mkhitar Aslanyan and Vahe Mikayelyan
J. Risk Financial Manag. 2025, 18(5), 277; https://doi.org/10.3390/jrfm18050277 - 17 May 2025
Viewed by 375
Abstract
This article presents an innovative methodology for enhancing statistical databases as reliable sources of information. The study leverages data from “Big Data of the Modern Global Economy: A Digital Platform for Data Mining—2020”, which serves as a digital tool designed to predict economic [...] Read more.
This article presents an innovative methodology for enhancing statistical databases as reliable sources of information. The study leverages data from “Big Data of the Modern Global Economy: A Digital Platform for Data Mining—2020”, which serves as a digital tool designed to predict economic development at both global and national levels, particularly in the context of the COVID-19 crisis and its aftermath. Utilizing a dataset focused on the G7 and BRICS nations as a case study, we assemble forecasts for several key indicators: the Digital Competitiveness Index, Global Innovation Index, Human Development Index, Gross Domestic Product (GDP), Economic Growth Rate, GDP per Capita, Quality of Life Index, Happiness Index, and Sustainable Development Index for 2021. Additionally, we conducted a plan-fact analysis. The accuracy of the post-pandemic economic recovery forecast is validated through comparison with actual data. Furthermore, this research provides statistical analyses and forecasts to minimize uncertainty during crises, considering the interconnected nature of climate change and financial factors inherent in these crises. Full article
(This article belongs to the Special Issue Banking Practices, Climate Risk and Financial Stability)
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22 pages, 292 KiB  
Article
Governance, Ownership Structure, and Financial Leverage: The Role of Board Gender Diversity in UK Firms
by Dramani Angsoyiri, Fadi Alkaraan and Judith John
J. Risk Financial Manag. 2025, 18(5), 276; https://doi.org/10.3390/jrfm18050276 - 17 May 2025
Viewed by 449
Abstract
This paper aims to investigate the relationship between governance structure, ownership structure, and financial leverage of corporations in the UK, with a special emphasis on the boardroom gender diversity. The study sample includes 484 UK firms from the FTSE All-Share Index for the [...] Read more.
This paper aims to investigate the relationship between governance structure, ownership structure, and financial leverage of corporations in the UK, with a special emphasis on the boardroom gender diversity. The study sample includes 484 UK firms from the FTSE All-Share Index for the period (2015–2023), with 4356 firm-year observations. The results show that CEO duality, gender diversity, managerial ownership, institutional ownership, and government shareholding are all positively associated with financial leverage, thus confirming the importance of these governance and ownership characteristics in determining capital structure policies. On the other hand, board size and the proportion of non-executive directors are not found to have a significant impact on financial leverage, which points to some room for improvement in UK board practices. In this regard, the study contributes to the governance-sustainability-finance nexus discussion by focusing on these dimensions in the UK corporate sector. As such, the findings of this study are important in providing policy recommendations for policymakers and corporate leaders and contribute to the ongoing wave of global corporate governance reforms and practical insights into enhancing governance frameworks at the firm level. Full article
(This article belongs to the Section Economics and Finance)
13 pages, 594 KiB  
Article
A Panel Data Analysis of Determinants of Financial Inclusion in Sub-Saharan Africa (SSA) Countries from 1999 to 2024
by Oladotun Larry Anifowose and Bibi Zaheenah Chummun
J. Risk Financial Manag. 2025, 18(5), 275; https://doi.org/10.3390/jrfm18050275 - 16 May 2025
Viewed by 645
Abstract
Globally, financial inclusion is regarded as being crucial for balancing an economy’s financial system. However, despite the significance of financial inclusion, it still needs to be clarified to identify what factors are responsible for the diverse trend of financial inclusion in the forty-five [...] Read more.
Globally, financial inclusion is regarded as being crucial for balancing an economy’s financial system. However, despite the significance of financial inclusion, it still needs to be clarified to identify what factors are responsible for the diverse trend of financial inclusion in the forty-five Sub-Saharan Africa (SSA) countries from 1999 to 2024. The main rationale of the study empirically investigated these determinants of financial inclusion in forty-five Sub-Saharan Africa (SSA) countries from 1999 to 2024, which covers three distinct periods: which is the pre-COVID, 2020–2022 is the COVID period, and the post-COVID period from 2023 onward, but examined as a whole from 1999 to 2024 for easy policy formulation for SSA countries. The study was anchored on two main research objectives: firstly, to examine the factors influencing financial inclusion in Sub-Saharan Africa (SSA) in these three distinct periods, and lastly, to present the policy implications of the result of these factors in enhancing financial inclusion in the post-COVID era in SSA. The study used the Panel Least Squares (PLS) technique in the data analysis. The result revealed that economic growth (GRO), Islamic banking (ISMAIC), money supply (MSS), internet users (USERS), and credit availability (CREDIT) positively and significantly enhance financial inclusion with coefficients of 0.001298, 4.926809, 1.08 × 10−6, 0.459388, and 0.657431, respectively, with significant p-values of 0.0008, 0.0023, 0.0000, 0.0000, and 0.000, respectively. On the flip side, internet servers (SERVER) have a negative coefficient value of 4.63 × 10−6 with a p-value of 0.000. Though inflation (INFL) and interest rate (INT.) have negative coefficient values of −0.02853 and −0.08317, they have insignificant p-value impacts of 0.2841 and 0.2501, respectively. The result indicates that many of the variables have a significant impact on financial inclusion. This is shown from the probabilities of the t statistics of each of the independent variables in the estimated model, which are significant at the 5% level. The policy implications of these results include the following: firstly, SSA governments should promote economic growth through investment in productive sectors, infrastructure development, and job creation programs to indirectly improve financial inclusion. Secondly, SSA countries’ policymakers should maintain price stability through sound monetary and fiscal policies to ensure inflation does not hinder access to financial services. Thirdly, SSA countries’ governments and central banks should promote lower interest rates and enhance credit accessibility, especially for marginalized groups, through subsidized loans and targeted credit schemes. Fourthly, policymakers should support the expansion of Islamic finance by improving regulatory frameworks and increasing awareness about Sharia-compliant financial products. Full article
(This article belongs to the Special Issue Financial Inclusion Strategies: Emerging Trends and Global Perspectives)
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17 pages, 270 KiB  
Article
Rating Liberalization and Efficiency: Evidence from the Property-Liability Insurance Industry
by Ming-Kuo Chen and Chi-Hung Chang
J. Risk Financial Manag. 2025, 18(5), 274; https://doi.org/10.3390/jrfm18050274 - 16 May 2025
Viewed by 213
Abstract
The property-liability insurance market in Taiwan has implemented three-stage deregulation on rate-making since 2002. This research investigates whether the rating liberalization brought about improvements in efficiency and productivity of the property-liability insurance market. Using data on property-liability insurers in Taiwan over 2001 to [...] Read more.
The property-liability insurance market in Taiwan has implemented three-stage deregulation on rate-making since 2002. This research investigates whether the rating liberalization brought about improvements in efficiency and productivity of the property-liability insurance market. Using data on property-liability insurers in Taiwan over 2001 to 2019 and employing data envelopment analysis, we show that technical, cost, and revenue efficiencies have improved after rating liberalization. Post-liberalization productivity has improved as well, and the decomposition of productivity change demonstrates that change in technology contributes most to productivity improvement at the inception of liberalization, and the contribution of efficiency improvement follows when rating controls are further released. Further analyses reveal that technical and revenue efficiency rose in the third stage of liberalization and cost efficiency improved in the second and third stages. Our findings suggest that the removal of price controls creates an operating environment with less restrictions and thus favors progress in efficiency of the property-liability insurance market. Full article
(This article belongs to the Section Financial Markets)
17 pages, 577 KiB  
Article
An Interdisciplinary Study: Deferred Tax Implications of Lay-By Agreements for Financial Planning and Decision Making
by Ahmed Mohammadali Haji, Muneer Hassan, Michelle van Heerden and Milan van Wyk
J. Risk Financial Manag. 2025, 18(5), 273; https://doi.org/10.3390/jrfm18050273 - 16 May 2025
Viewed by 376
Abstract
Due to tough economic conditions, more retailers are relying on lay-by agreements to maintain revenue. Lay-by agreements are thus part of their business models and are included in their forecasting and budgeting strategies. As part of financial planning, decisions need to be made [...] Read more.
Due to tough economic conditions, more retailers are relying on lay-by agreements to maintain revenue. Lay-by agreements are thus part of their business models and are included in their forecasting and budgeting strategies. As part of financial planning, decisions need to be made based on financial information to achieve organisational goals. A recent South African income tax amendment regarding lay-by agreements resulted in three possible income tax interpretations. This study analysed and evaluated the implications of these amendments for South African deferred tax. The study utilised a doctrinal approach in an interpretive paradigm. The results show that the amendment in the South African Income Tax Act relating to lay-by agreements has an impact on deferred tax calculations, depending on the tax interpretation used. The resulting ambiguity and diversion in the practice of the deferred tax treatment may potentially lead to less useful financial information, contrary to the objectives of the International Accounting Standards Board for effective decision making. This study recommends that the National Treasury should clarify this ambiguity, through either legislative amendments or an interpretation note. This will create the necessary certainty for organisations to plan their finances. Full article
(This article belongs to the Special Issue Financial Management)
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18 pages, 469 KiB  
Article
The Impact of Accounting Digital Transformation on Financial Transparency: Mediating Role of Good Governance
by Abdalla Alassuli, Nawaf Samah Thuneibat, Ahmed Eltweri, Krayyem Al-Hajaya and Khaled Alghraibeh
J. Risk Financial Manag. 2025, 18(5), 272; https://doi.org/10.3390/jrfm18050272 - 16 May 2025
Viewed by 825
Abstract
Accounting digital transformation in today’s fast-digitizing banking environment is becoming an imperative force driving transparency and governance in the banking industry. This study explores the effect of accounting digital transformation on transparency in finance, with emphasis on the mediating effect of good governance [...] Read more.
Accounting digital transformation in today’s fast-digitizing banking environment is becoming an imperative force driving transparency and governance in the banking industry. This study explores the effect of accounting digital transformation on transparency in finance, with emphasis on the mediating effect of good governance in Jordan’s commercial banking. Based on survey data from 386 bank experts, the study utilizes Structural Equation Modelling (SEM) to analyze the relationships among organizational, technical, and human dimensions of digital transformation, governance, as well as financial transparency. The findings show that all three dimensions have positive impacts on transparency in finance, and good governance partially mediates these relationships. These insights provide policy makers and practising managers with actionable advice to enhance financial reporting through governance and digitization. Full article
(This article belongs to the Special Issue The Future of Sustainable Finance: Digital and Circular Synergies)
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18 pages, 1002 KiB  
Article
Impact of Management Indicators on the Business Performance of Hotel SMEs in Mexico
by Antonio Emmanuel Pérez Brito, Martha Isabel Bojórquez Zapata, Luís Lima Santos and Conceição Gomes
J. Risk Financial Manag. 2025, 18(5), 271; https://doi.org/10.3390/jrfm18050271 - 16 May 2025
Viewed by 317
Abstract
Empirical studies on management control and business performance are growing. However, a research gap exists regarding the tourism development/hotel small- and medium-sized enterprises (SMEs), particularly in terms of administrative management and organizational functions. Hence, drawing from the principles of management control, specifically about [...] Read more.
Empirical studies on management control and business performance are growing. However, a research gap exists regarding the tourism development/hotel small- and medium-sized enterprises (SMEs), particularly in terms of administrative management and organizational functions. Hence, drawing from the principles of management control, specifically about the utilization of business performance evaluation techniques, this study aimed to construct a business performance index for hotel SMEs in the state of Yucatán, Mexico. To this end, the index evaluated multiple variables including investment, profitability, financing sources, operating metrics, and the utilization of financial information. To accomplish the goals, this study administered surveys to the proprietors/administrators of 139 hotel SMEs. It employed a quantitative approach and utilized the multiple linear regression model with the forward technique. Its findings demonstrate that the utilization of financial information and funding sources have the most substantial correlations with business performance. As theoretical and practical implications, a business performance index arose, replying to the needs presented by the Mexican Association of Hotels in Yucatán. Full article
(This article belongs to the Special Issue Innovations and Challenges in Management Accounting)
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33 pages, 1925 KiB  
Systematic Review
Impression Management Tactics in the Chairperson’s Statement: A Systematic Literature Review and Avenues for Future Research
by Masibulele Phesa, Mabutho Sibanda, Frank Ranganai Matenda and Zamanguni Gumede
J. Risk Financial Manag. 2025, 18(5), 270; https://doi.org/10.3390/jrfm18050270 - 16 May 2025
Viewed by 447
Abstract
The chairperson’s statement (CS) has evolved into a key component of corporate reporting, offering an authoritative, high-level summary of a company’s activities, initiatives, operations, financial performance, and achievements over the preceding financial year, along with insights into future outlooks. Recognised for its informative [...] Read more.
The chairperson’s statement (CS) has evolved into a key component of corporate reporting, offering an authoritative, high-level summary of a company’s activities, initiatives, operations, financial performance, and achievements over the preceding financial year, along with insights into future outlooks. Recognised for its informative value, the CS is consistently ranked by stakeholders as the most read and most influential section of the integrated report. Despite its importance, the CS is also a platform where corporate management often engages in impression management (IM) to portray a biased and overly positive image of the company. This study conducted a systematic literature review to examine the IM tactics employed within the CS. Based on the findings, an integrative conceptual framework was developed. Identified IM tactics include readability, textual characteristics, the influence of culture, legal systems and capital markets, paratext and intertextuality, the tone of language, forward-looking statements, retrospective sense-making, ambiguous language, the use of photographs and graphs, impersonalisation and evaluative language, and self-serving attributions. The results highlight that the study of IM strategies in CSs represents a rich and relevant research domain that warrants deeper exploration. Given its qualitative complexity and underexplored dimensions, this area offers several promising avenues for future investigation. Full article
(This article belongs to the Special Issue Financial Management)
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19 pages, 1553 KiB  
Article
Optimal Portfolio Construction Using the Realized Volatility Concept: Empirical Evidence from the Stock Exchange of Thailand
by Sanae Rujivan, Thapakon Khuatongkeaw and Athinan Sutchada
J. Risk Financial Manag. 2025, 18(5), 269; https://doi.org/10.3390/jrfm18050269 - 15 May 2025
Viewed by 654
Abstract
This paper addresses the problem of constructing optimal equity portfolios under volatile market conditions by minimizing realized volatility—an alternative risk quantifier that more accurately captures short-term market fluctuations than traditional variance-based approaches. This issue is particularly relevant for investors seeking robust risk management [...] Read more.
This paper addresses the problem of constructing optimal equity portfolios under volatile market conditions by minimizing realized volatility—an alternative risk quantifier that more accurately captures short-term market fluctuations than traditional variance-based approaches. This issue is particularly relevant for investors seeking robust risk management strategies in dynamic and uncertain environments. We propose a mathematical optimization framework that determines portfolio weights by minimizing realized volatility, subject to expected return constraints. The model is empirically validated using historical data from stocks listed in the Stock Exchange of Thailand 50 (SET50) index. Through a comparative analysis of realized volatility and variance-based optimization across multiple portfolio sizes and return levels, we find that portfolios constructed using realized volatility consistently achieve higher Sharpe ratios, indicating superior risk-adjusted performance. We further introduce an efficiency metric based on the Euclidean distance between optimal portfolio weight vectors to evaluate the stability of allocations under extended investment horizons. The findings underscore the practical advantages of realized volatility in portfolio construction, offering enhanced responsiveness to market dynamics and improved performance outcomes. The novelty of this study lies in integrating realized volatility into a constrained portfolio optimization model and empirically demonstrating its superiority, thereby extending traditional mean-variance methods in both scope and effectiveness. Full article
(This article belongs to the Section Mathematics and Finance)
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19 pages, 308 KiB  
Article
The Impact of CEO and Firm Attributes on ESG Performance: Evidence from an Emerging Market
by Fahad Alrobai and Maged M. Albaz
J. Risk Financial Manag. 2025, 18(5), 268; https://doi.org/10.3390/jrfm18050268 - 15 May 2025
Cited by 1 | Viewed by 719
Abstract
The research aims to unveil the impact of CEO traits and firm attributes on corporate environmental, social, and governance (ESG) performance within the Egyptian context as an emerging market. Using the quantitative research approach, we analyzed a panel of data from 43 listed [...] Read more.
The research aims to unveil the impact of CEO traits and firm attributes on corporate environmental, social, and governance (ESG) performance within the Egyptian context as an emerging market. Using the quantitative research approach, we analyzed a panel of data from 43 listed firms in the S&P/EGX ESG index from 2014 to 2022 through three statistical models to examine how CEO power, confidence, and tenure influence corporate sustainability practices. Our findings reveal that CEO power and confidence influence ESG performance and shape the firm’s strategy. However, there is no significant influence related to CEO tenure. Moreover, we found mixed evidence regarding the impact of firm financial attributes, such as the positive impact of firm size and operating cash flow on ESG performance and the negative impact of firm listing tenure. Our findings contribute to the literature by adding new empirical evidence in this arguable area from an emerging market and provide new insights into the significant influence of the firm’s first man (CEO) in shaping its sustainability practices, especially ESG. In addition, it gives professional authorities and policymakers insights into the nexus between the CEO and the firm’s ESG strategies, disclosure, and performance. Moreover, it can motivate future research to re-examine the role of CEO traits in shaping ESG performance in other countries to create a comprehensive understanding of this knowledge field. Full article
(This article belongs to the Special Issue Emerging Trends and Innovations in Corporate Finance and Governance)
22 pages, 390 KiB  
Article
Determinants of Environmental, Social, and Governance Measures: Evidence from European Insurance Companies
by Rita Hipólito, Maria Fátima Ribeiro Borges, Maria C Tavares, José Vale, Graça Azevedo and Jonas Oliveira
J. Risk Financial Manag. 2025, 18(5), 267; https://doi.org/10.3390/jrfm18050267 - 15 May 2025
Viewed by 411
Abstract
The present study aims to assess the determinants of the environmental, social, and governance (ESG) performance of European insurance companies, exploring the connections between the determinants and each of the three ESG pillars. Using a European panel dataset, the study includes a sample [...] Read more.
The present study aims to assess the determinants of the environmental, social, and governance (ESG) performance of European insurance companies, exploring the connections between the determinants and each of the three ESG pillars. Using a European panel dataset, the study includes a sample of the 30 most relevant European insurance companies listed in the stock exchange index Stoxx Europe 600 index, over the period 2016–2020. Main findings indicate that older insurance companies, with a larger dimension and profitability, less leveraged, with smaller boards, but with more gender diverse boards, with a sustainability committee and with a standalone sustainability report, tend to present a higher level of ESG performance. Findings also indicate that insurance companies with higher ESG performance are located in countries with higher gross domestic product growth rate. The current research setting has never been studied hitherto. Therefore, it adds to the limited empirical research on the determinants of ESG performance among insurance companies, which is focused on insurances companies in the United States of America. Full article
(This article belongs to the Special Issue Artificial Intelligence, Accounting, and Sustainability: Pathways to the SDGs)
18 pages, 335 KiB  
Article
Factors Affecting CSR Disclosure by Takaful Insurance Companies During the Pandemic Crisis
by Sameh Hachicha, Samah Abu-Alhayja and Wael Hemrit
J. Risk Financial Manag. 2025, 18(5), 266; https://doi.org/10.3390/jrfm18050266 - 15 May 2025
Viewed by 404
Abstract
This study explores the key factors driving corporate social responsibility disclosure (CSR_DISC) by Takaful insurance companies (TKIs) in Saudi Arabia during and after the COVID-19 pandemic. We use content analysis and follow an unweighted scoring method to score the CSR_DISC index. Based on [...] Read more.
This study explores the key factors driving corporate social responsibility disclosure (CSR_DISC) by Takaful insurance companies (TKIs) in Saudi Arabia during and after the COVID-19 pandemic. We use content analysis and follow an unweighted scoring method to score the CSR_DISC index. Based on a sample of 26 Saudi-listed TKIs, for the period 2020–2024, we employ Poisson panel and negative binomial panel models to examine the interdependent relationships between CSR_DISCs and a set of corporate governance factors. We find that Saudi TKIs increased their CSR_DISCs in their financial reporting during and after the COVID-19 crisis. These findings confirm that board and firm size have a significant and negative effect on corporate CSR_DISC. However, the number of independent board members and female directors positively affect the extent of CSR_DISCs. Finally, the size of the audit committee and the Shariah supervisory board, frequency of board meetings, and profitability do not affect CSR_DISCs. Full article
(This article belongs to the Special Issue Environmental, Social, and Governance (ESG), Corporate Social Responsibility (CSR), and Green Finance)
15 pages, 582 KiB  
Article
Digital Platform Capabilities for Transforming Cultural Heritage Business: Exploring the Mediating Role of Business Model Experimentation and Competitive Advantage
by Kumar Aashish, Kumar Anubhav, Shalaghya Sharma, Neelima Singh and Mohammad Zohair
J. Risk Financial Manag. 2025, 18(5), 265; https://doi.org/10.3390/jrfm18050265 - 14 May 2025
Viewed by 430
Abstract
Digitalisation has evolved as a multidimensional phenomenon and impacts the business world. SMEs heavily invest in digital platform capabilities to keep track of digital transformation, enabling them to perform business model experimentation to generate and develop innovation. This paper explores the role of [...] Read more.
Digitalisation has evolved as a multidimensional phenomenon and impacts the business world. SMEs heavily invest in digital platform capabilities to keep track of digital transformation, enabling them to perform business model experimentation to generate and develop innovation. This paper explores the role of these two crucial growth-promoting variables in the performance of art and craft-based firm’s performance. Through this paper, the researchers contest the argument that, although digital platform capabilities accelerate business model experimentation for firm performance, competitive advantage plays a significant mediating role. Along with these arguments, this study also explores the role of digital platform capability in business model experimentation. It examines the mediating role of business model experimentation in the forming of a competitive advantage. The research model under examination belongs to the explorative school of research; hence, the researchers have used partial least square–structural equation modelling (PLS-SEM) on a sample of 211 Indian firms belonging to the category of art and craft-based businesses. The hypothesis testing results facilitate exciting insights about the direct and indirect effects of digital platform capabilities, business model experimentation, and competitive advantage on firm performance. In light of the research findings, policymakers, SME consultants, and managers may obtain practical insights in order to develop an intervention mechanism. Researchers working in this area will glean a fresh look at the antecedents of SME performance as this model is explorative; future research may explore the testing of the model in different geographic locations and industry contexts. Full article
(This article belongs to the Special Issue Entrepreneurship in Emerging Economies)
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35 pages, 7112 KiB  
Article
The Dynamic Effects of Economic Uncertainties and Geopolitical Risks on Saudi Stock Market Returns: Evidence from Local Projections
by Ezer Ayadi and Noura Ben Mbarek
J. Risk Financial Manag. 2025, 18(5), 264; https://doi.org/10.3390/jrfm18050264 - 14 May 2025
Viewed by 769
Abstract
This paper examines the impact of various uncertainty channels on stock market returns in Saudi Arabia, with a focus on the Tadawul All Share Index (TASI). It examines factors such as Saudi-specific Geopolitical Risk, Global Oil Price Uncertainty, Climate Policy Uncertainty, and U.S. [...] Read more.
This paper examines the impact of various uncertainty channels on stock market returns in Saudi Arabia, with a focus on the Tadawul All Share Index (TASI). It examines factors such as Saudi-specific Geopolitical Risk, Global Oil Price Uncertainty, Climate Policy Uncertainty, and U.S. Monetary Policy Uncertainty. Using monthly data from November 1998 to June 2024 and the Local Projections (LP) methodology, the study examines how these uncertainties impact market returns across various time horizons, taking into account potential structural breaks and nonlinear dynamics. Our findings indicate significant variations in the market’s response to the uncertainty measures across two distinct periods. During the first period, geopolitical risks have a strong positive impact on market returns. Conversely, the second period reveals a reversal, with negative cumulative effects, suggesting a shift in risk–return dynamics. Oil Price Uncertainty consistently exhibits a negative impact in both periods, highlighting the changing nature of oil dependency in the Saudi market. Additionally, Climate Policy Uncertainty is becoming more significant, reflecting increased market sensitivity to global environmental policy changes. Our analysis reveals significant asymmetries in the effects of various uncertainty shocks, with Monetary Policy Uncertainty exhibiting nonlinear effects that peak at intermediate horizons, while commodity-related uncertainties exhibit more persistent impacts. These findings, which remain robust across various tests, offer critical insights for portfolio management, policy formulation, and risk assessment in emerging markets undergoing substantial economic changes. Full article
(This article belongs to the Section Financial Markets)
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18 pages, 296 KiB  
Article
How Does Climate Finance Affect the Ease of Doing Business in Recipient Countries?
by Monica Kabutey, Solomon Nborkan Nakouwo and John Taden
J. Risk Financial Manag. 2025, 18(5), 263; https://doi.org/10.3390/jrfm18050263 - 13 May 2025
Viewed by 532
Abstract
Developing countries face a disproportionate degree of threat from climate change. As such, they require and receive significant financial support to address the menace. However, little is known about the potential externalities of this form of external liquidity for the business sector. This [...] Read more.
Developing countries face a disproportionate degree of threat from climate change. As such, they require and receive significant financial support to address the menace. However, little is known about the potential externalities of this form of external liquidity for the business sector. This paper evaluates the impact of climate finance on the ease of doing business (EODB). On the one hand, climate finance might lead to an improved business environment as the funds facilitate infrastructure provision, technological innovation, and international collaboration for recipient countries. On the other hand, however, the business environment might be negatively impacted by complex new regulations, disruptive technological transitions, market distortions, and resource diversions. Countries receiving climate funds may also introduce new environmental and business regulations, implement new technologies, and divert resources to new programs to justify the receipt of aid or demonstrate a commitment to balancing economic development with environmental objectives. We theorize that given the expected disruptions to business, climate finance should negatively impact the EODB. We also argue that this negative impact will be more severe for resource-rich countries than for their resource-poor peers. Countries rich in natural resources might experience higher disruptions to business operations as they attempt to balance resource-dependent economic operations with environmental objectives mandated by climate finance. Utilizing panel data for 86 recipient countries for the 2002–2021 period, we test our hypotheses using the Generalized Methods of Moments (GMM) technique. The baseline results suggest that climate finance has a weak positive impact on the EODB. However, as argued, resource-dependence heterogeneity analysis reveals that climate finance significantly negatively disrupts the EODB in resource-rich countries. Furthermore, a sectoral comparative analysis shows that while climate finance has a significant positive impact on the growth of the service sector, it significantly slows the growth of the resource sector, affirming the argument that climate finance might attract higher disruptions to resource-dependent business operations. By implication, lowly diversified economies might realize more negative than positive effects of climate finance, and investors should consider providing support to ease the pains of transitioning from resource-intensive growth to clean energy-driven development strategies. Full article
(This article belongs to the Special Issue Featured Papers in Climate Finance)
27 pages, 342 KiB  
Article
Auditor Expertise and Bank Failure: Do Going Concern Opinions Predict Bank Closure?
by Kose John and Shirley Liu
J. Risk Financial Manag. 2025, 18(5), 262; https://doi.org/10.3390/jrfm18050262 - 12 May 2025
Viewed by 489
Abstract
This study investigates how the quality of engagement auditors, assessed using the auditor’s industry expertise and size at both national and state levels, influences the likelihood of going concern opinion (GCO) issuance for U.S. banks from 2002 to 2023. We also examine how [...] Read more.
This study investigates how the quality of engagement auditors, assessed using the auditor’s industry expertise and size at both national and state levels, influences the likelihood of going concern opinion (GCO) issuance for U.S. banks from 2002 to 2023. We also examine how auditor quality affects the accuracy of GCOs, specifically regarding Type I (false positive) and Type II (false negative) errors in GCO issuance. Using a dataset of 4992 bank-year observations from 414 unique banks, we analyze the correlations between auditor characteristics and these error types. We find that state-level audit industry experts issue significantly more accurate GCOs, demonstrating lower rates of both Type I and Type II errors compared to their counterparts. National-level experts and larger audit firms primarily show a reduced likelihood of Type II errors, indicating a more conservative approach. Our findings underscore the importance of localized auditor expertise in assessing bank financial health and suggest that enhanced collaboration between auditors and regulators could improve the predictive power of GCOs. These results offer important implications for regulatory policy and emphasize the need for improved audit standards to bolster financial system stability. Full article
(This article belongs to the Special Issue Financial Reporting and Auditing)
32 pages, 1996 KiB  
Article
Integrating Circular Economy Principles in Water Resilience: Implications for Corporate Governance and Sustainability Reporting
by Ronald C. Beckett and Milé Terziovski
J. Risk Financial Manag. 2025, 18(5), 261; https://doi.org/10.3390/jrfm18050261 - 12 May 2025
Viewed by 600
Abstract
This paper makes an empirical contribution to the relatively sparse literature on the relationship between corporate governance and sustainability disclosure in mandatory reporting. We study the pursuit of UN SDG 6—clean water and sanitation—as an instance of sustainability and make observations from the [...] Read more.
This paper makes an empirical contribution to the relatively sparse literature on the relationship between corporate governance and sustainability disclosure in mandatory reporting. We study the pursuit of UN SDG 6—clean water and sanitation—as an instance of sustainability and make observations from the literature considering water resilience scenarios, circular economy perspectives, as well as governance and integrated reporting requirements. The term “water governance” has been used to characterize operational actions needed to maintain a balance with water scarcity being a dominant theme. Continuing adaptation to emergent conditions is needed and we draw on an agile structuration theory model to help understand how a succession of innovation projects supports the transition to a circular economy. Our theoretical discussion is reinforced by an in-depth longitudinal case study of Yarra Valley Water (YVW), an innovative Australian water utility. The longitudinal case study analysis provides insights into several different types of innovative projects that demonstrate how circular economy principles in water resilience are integrated for corporate governance and sustainability reporting. Several case studies could be a topic for future research drawing on the agile structuration theory model presented in this paper. Full article
(This article belongs to the Special Issue Sustainability Reporting and Corporate Governance)
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28 pages, 349 KiB  
Article
Government Ownership as a Catalyst: Corporate Governance and Corporate Social Responsibility in Jordan’s Industrial Sector
by Abdelrazaq Farah Freihat and Renad Al-Hiyari
J. Risk Financial Manag. 2025, 18(5), 260; https://doi.org/10.3390/jrfm18050260 - 11 May 2025
Viewed by 487
Abstract
This research examines how corporate governance (CG) affects corporate social responsibility (CSR) disclosure with government ownership as a moderation factor by analyzing panel data from 30 industrial firms listed on the Amman Stock Exchange during 2018–2022. The study employed board of directors and [...] Read more.
This research examines how corporate governance (CG) affects corporate social responsibility (CSR) disclosure with government ownership as a moderation factor by analyzing panel data from 30 industrial firms listed on the Amman Stock Exchange during 2018–2022. The study employed board of directors and audit committee characteristics as independent variables to represent CG while developing a CSR disclosure index. The research controlled for company size and financial leverage in its model. The findings demonstrate that corporate governance dimensions affect CSR disclosure, while government ownership significantly enhances this relationship in a positive direction. Government ownership increases R2 values, which shows that corporate governance merged with government ownership modifies the corporate governance and CSR disclosure relationship by strengthening the impact when government stakes rise. Statistical analysis revealed that board independence, board duality, audit committee size and independence, along with audit committee meeting frequency, all had positive effects on CSR disclosure. The study found no statistically significant effect of board size, frequency of board meetings, or the financial expertise of audit committee members on CSR disclosure. Based on the findings, this study outlines recommendations to strengthen governance practices that support social disclosure. Full article
(This article belongs to the Special Issue Environmental, Social, and Governance (ESG), Corporate Social Responsibility (CSR), and Green Finance)
21 pages, 14050 KiB  
Article
Bitcoin vs. the US Dollar: Unveiling Resilience Through Wavelet Analysis of Price Dynamics
by Essa Al-Mansouri
J. Risk Financial Manag. 2025, 18(5), 259; https://doi.org/10.3390/jrfm18050259 - 9 May 2025
Viewed by 1293
Abstract
This paper investigates Bitcoin’s resilience against the U.S. dollar—widely recognized as the global reserve currency—by applying a multi-method wavelet analysis framework to daily price data of Bitcoin, the USD strength index (DXY), the euro, and other assets ranging from August 2015 to June [...] Read more.
This paper investigates Bitcoin’s resilience against the U.S. dollar—widely recognized as the global reserve currency—by applying a multi-method wavelet analysis framework to daily price data of Bitcoin, the USD strength index (DXY), the euro, and other assets ranging from August 2015 to June 2024. Quantitative measures—particularly the Frobenius norm of wavelet coherence and an exponential decay phase-weighting scheme—reveal that Bitcoin’s out-of-phase relationship with the dollar is lower and more sporadic than that of mainstream assets, indicating it is not tightly governed by dollar fluctuations. Even after controlling for the euro’s dominant influence in the DXY, BTC continues to show weaker coupling than mainstream assets—reinforcing the idea that it may serve as a partial hedge against dollar-driven volatility. These results support the hypothesis that Bitcoin may serve as a resilient store of value and hedge against dollar-driven market volatility, placing Bitcoin within the broader debate on global monetary frameworks. As global monetary conditions evolve, the resilience of Bitcoin (BTC) relative to the world’s leading reserve currency—the U.S. dollar—has significant implications for both investors and policymakers. Full article
(This article belongs to the Special Issue Risk Management and Return Predictability in Global Markets)
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17 pages, 521 KiB  
Article
How Do Segment Disclosure and Cost of Capital Impact the Investment Efficiency of Listed Firms in Nigeria?
by Dolapo Faith Sule and Tankiso Moloi
J. Risk Financial Manag. 2025, 18(5), 258; https://doi.org/10.3390/jrfm18050258 - 9 May 2025
Viewed by 531
Abstract
The demand for improved segment disclosure is driven by the need to address investment inefficiencies and boost investors’ confidence in listed companies around the world. Transparency in corporate activities is essential for investors to determine the parameters of their stock return and investment [...] Read more.
The demand for improved segment disclosure is driven by the need to address investment inefficiencies and boost investors’ confidence in listed companies around the world. Transparency in corporate activities is essential for investors to determine the parameters of their stock return and investment efficiency across various segments of firms. Previous studies have primarily focused on a broader investment landscape in Nigeria, without paying adequate attention to the impacts of segment disclosure and cost of capital on the investment efficiency of listed firms. Against this backdrop, this study represents the first empirical research to examine the joint impact of segment disclosure and cost of capital on the investment efficiency of listed firms in Nigeria. Using a longitudinal research design, secondary data from 2015 to 2022 were extracted from the annual reports of 85 listed firms on the Nigerian Exchange Group (NGX). The data were analysed through descriptive and inferential statistical methods. Firms that reported their business or geographic segments were purposively selected for this study. The findings show that the cost of capital of the examined firms has a negative and significant impact on their investment efficiency (coefficient = −0.0268, p-value = 0.03079). On the other hand, the segment disclosure of the firms has a positive impact on their investment efficiency (coefficient = 0.0119, p-value = 0.0303). Lastly, total segment disclosure and cost of capital jointly have positive and significant effects (coefficient = 0.0192, p-value = 0.0030) on the investment efficiency of the firms. This study contributes to the growing research on segment disclosure by providing evidence that increased segment disclosure and a lower cost of capital can improve the investment efficiency of listed firms in Nigeria. Thus, this study recommends that the management of firms in Nigeria should disclose more segment information in their annual reports. This could consequently boost investors’ confidence in the reporting practices of firms, reduce the cost of capital of firms, and improve firms’ investment efficiency. Full article
(This article belongs to the Special Issue Corporate Sustainability and Firm Performance: Models, Practices and Policy Perspective)
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3 pages, 146 KiB  
Editorial
Editorial: Durable, Inclusive, Sustainable Economic Growth and Challenge
by Cristina Raluca Gh. Popescu
J. Risk Financial Manag. 2025, 18(5), 257; https://doi.org/10.3390/jrfm18050257 - 8 May 2025
Viewed by 250
Abstract
Nowadays, sustainability and sustainable development play vital roles in our lives [...] Full article
(This article belongs to the Special Issue Durable, Inclusive, Sustainable Economic Growth and Challenge)
19 pages, 292 KiB  
Article
Voluntary Audits of Nonfinancial Disclosure and Earnings Quality
by Sunita S. Rao, Carlos Ernesto Zambrana Roman and Norma Juma
J. Risk Financial Manag. 2025, 18(5), 256; https://doi.org/10.3390/jrfm18050256 - 8 May 2025
Viewed by 381
Abstract
We investigate the association between voluntary assurance of a firm’s corporate social responsibility (CSR) report and earnings management. A concern with CSR reports is they are used to promote a socially responsible image without a meaningful commitment to CSR activities, referred to as [...] Read more.
We investigate the association between voluntary assurance of a firm’s corporate social responsibility (CSR) report and earnings management. A concern with CSR reports is they are used to promote a socially responsible image without a meaningful commitment to CSR activities, referred to as “greenwashing”. To credibly signal the CSR report is reliable, a firm can incur the additional costs to voluntarily obtain assurance. Our results show that strong corporate governance plays a crucial role in limiting earnings management. The most consistent improvements in earnings quality occur when firms combine strong governance with CSR assurance from a non-accounting provider (NonACCT). The combination of strong governance and NonACCT assurance appears to be mutually reinforcing, suggesting a symbolic legitimacy strategy that is also substantively effective. Full article
(This article belongs to the Special Issue Emerging Trends and Innovations in Corporate Finance and Governance)
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