Advances in Corporate Disclosure Practice

A special issue of International Journal of Financial Studies (ISSN 2227-7072).

Deadline for manuscript submissions: closed (24 February 2023) | Viewed by 20366

Special Issue Editors


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Guest Editor
Bangor Business School, Bangor University, Hen Goleg, College Rd, Bangor LL57 2DG, UK
Interests: corporate narrative reporting; international financial reporting standards (IFRS); Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI); extensible business reporting language (XBRL); market-based accounting research; auditing; corporate governance; earnings management; corporate investment efficiency; corporate finance; Islamic accounting and finance
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Guest Editor
Brunel Business School, Brunel University London, Kingston Lane, Uxbridge, London UB8 3PH, UK
Interests: accounting and governance; accountability and ethics (corporate social responsibility—social and environmental accounting); sustainability; integrated reporting; market-based accounting research
Special Issues, Collections and Topics in MDPI journals

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Guest Editor
Faculty of Law, Economics and Finance, Campus Kirchberg, Université du Luxembourg, 6, rue Richard Coudenhove-Kalergi, L-1359 Luxembourg, Luxembourg
Interests: accounting; corporate governance; corporate social responsibility; ESG; sustainability
Special Issues, Collections and Topics in MDPI journals

Special Issue Information

Dear Colleagues,

In this Special Issue, we are interested in bringing together rigorous manuscripts that advance accounting and corporate finance research. We invite manuscripts featuring original research that complements our understanding of voluntary and mandatory disclosure practices of financial and nonfinancial information in the corporate environment. We call for manuscripts that deal with all aspects related to measurements of corporate disclosure, factors affecting the levels and quality of corporate disclosure, and the economic and non-economic consequences of practising corporate disclosure. We are interested in conceptual, theoretical, methodological, empirical case studies and systematic review studies.

Prof. Dr. Khaled Hussainey
Dr. Ahmed Elamer
Dr. Imen Derouiche
Guest Editors

Manuscript Submission Information

Manuscripts should be submitted online at www.mdpi.com by registering and logging in to this website. Once you are registered, click here to go to the submission form. Manuscripts can be submitted until the deadline. All submissions that pass pre-check are peer-reviewed. Accepted papers will be published continuously in the journal (as soon as accepted) and will be listed together on the special issue website. Research articles, review articles as well as short communications are invited. For planned papers, a title and short abstract (about 100 words) can be sent to the Editorial Office for announcement on this website.

Submitted manuscripts should not have been published previously, nor be under consideration for publication elsewhere (except conference proceedings papers). All manuscripts are thoroughly refereed through a single-blind peer-review process. A guide for authors and other relevant information for submission of manuscripts is available on the Instructions for Authors page. International Journal of Financial Studies is an international peer-reviewed open access quarterly journal published by MDPI.

Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1800 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

  • corporate financial disclosure measurement
  • artificial intelligence measurement of corporate disclosure
  • market-based accounting research
  • disclosure and corporate governance
  • stock market reaction to disclosure practice
  • economic consequences of corporate disclosure
  • non-financial consequences of corporate disclosure
  • disclosure during COVID-19
  • Industry 4.0 and corporate disclosure
  • international financial reporting standards (IFRS)
  • accounting and auditing organization for islamic financial institutions (AAOIFI)
  • extensible business reporting language (XBRL)

Published Papers (6 papers)

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Research

12 pages, 265 KiB  
Article
Qualitative Analysis of IAS 2 Capability for Handling the Financial Information Generated by Cost Techniques
by Amer Morshed and Abdulhadi Ramadan
Int. J. Financial Stud. 2023, 11(2), 67; https://doi.org/10.3390/ijfs11020067 - 13 May 2023
Cited by 7 | Viewed by 2774
Abstract
Using a qualitative research design, this study examined the inventory valuation conflict between financial managers and auditors and its implications for the International Accounting Standard 2 (IAS 2). This study found that the conflict arose due to the lack of precise instructions in [...] Read more.
Using a qualitative research design, this study examined the inventory valuation conflict between financial managers and auditors and its implications for the International Accounting Standard 2 (IAS 2). This study found that the conflict arose due to the lack of precise instructions in the IAS 2 regarding cost–unit calculations. It was recommended that the IAS 2 should provide more examples or use the chamber of commerce as a source of information to clarify what should be considered as the product cost of storage expenses. This study supported previous findings that job order costing was used for customized manufacturing, while process costing was used for standardizing manufacturing. It also highlighted the importance of process costing in evaluating equivalent units and normal and abnormal losses in production, which affect inventory value. This study concluded that cost techniques should be viewed as managerial tools for calculating the cost of a unit. Cost managers should use their expertise to develop the cost formula for their specific industry while maintaining confidentiality. This study contributed to the literature by highlighting the importance of process costing in evaluating inventory valuation and resolving conflicts between financial managers and auditors. It also provided practical implications for improving the treatment of inventory in the IAS 2. This included directing the implementation of stable policies and attaching some indices when computing equivalent units, abnormal losses, and product costs. This study’s limitations included the use of a small sample size, and future studies should consider larger sample sizes from different industries and countries. Full article
(This article belongs to the Special Issue Advances in Corporate Disclosure Practice)
15 pages, 348 KiB  
Article
Do CEO Attributes Spur Conservatism?
by Rawan Atwa, Safaa Alsmadi, Buthiena Kharabsheh and Ruwaidah Haddad
Int. J. Financial Stud. 2023, 11(1), 52; https://doi.org/10.3390/ijfs11010052 - 22 Mar 2023
Cited by 1 | Viewed by 2023
Abstract
This study examines the relationship between chief executive officers’ (CEOs’) characteristics (e.g., tenure, experience, education, age and compensation) and accounting conservatism for a sample of 672 yearly observations from both Jordanian industrial and service companies listed on the Amman Stock Exchange (ASE) during [...] Read more.
This study examines the relationship between chief executive officers’ (CEOs’) characteristics (e.g., tenure, experience, education, age and compensation) and accounting conservatism for a sample of 672 yearly observations from both Jordanian industrial and service companies listed on the Amman Stock Exchange (ASE) during the period 2014–2021. Using feasible generalised least squares, the results show that CEOs with more experience and skills are positively and significantly related to accounting conservatism. Furthermore, consistent with upper-echelon-theory arguments, the findings reveal that CEO tenure is significantly and positively associated with the level of accounting conservatism. The results indicate that CEOs’ education, age and compensation are positively but insignificantly related to accounting conservatism. Overall, this study contributes to the literature by providing evidence of the importance of recognising the effects of CEOs’ characteristics on influencing accounting conservatism in Jordanian industrial and service companies. Full article
(This article belongs to the Special Issue Advances in Corporate Disclosure Practice)
21 pages, 596 KiB  
Article
Value Relevance of Board Attributes: The Mediating Role of Key Audit Matter
by Romlah Jaffar, Nor Asyiqin Abu, Mohamat Sabri Hassan and Mohd Mohid Rahmat
Int. J. Financial Stud. 2023, 11(1), 41; https://doi.org/10.3390/ijfs11010041 - 28 Feb 2023
Cited by 1 | Viewed by 2278
Abstract
The presence of board members with good governance attributes is value-relevant since it influences investors’ investment decisions. The value relevance is expected to improve with the newly introduced extended audit report to disclose key audit matters (KAMs). KAM disclosure provides information about issues [...] Read more.
The presence of board members with good governance attributes is value-relevant since it influences investors’ investment decisions. The value relevance is expected to improve with the newly introduced extended audit report to disclose key audit matters (KAMs). KAM disclosure provides information about issues faced by external auditors in the auditing of a company’s financial statement. Since the disclosure of KAM involves discussion and negotiation between the board and external auditor, it gives an indication that board value relevance can be affected by KAM disclosure. Using 931 firm-year observations from firms listed on the Bursa Malaysia between 2016 and 2019, this study re-examined the value relevance of the board and whether such value relevance improves with the disclosure of KAMs. The findings indicated that some board attributes influenced investors’ reactions negatively. The disclosure of KAM served as both an indirect mediator and a complementary mediator to increase the board’s value relevance. Investors reacted less negatively with KAM disclosure and companies’ values improved. The findings provide an insight into the role of KAM disclosure in reducing information asymmetry and assisting investors in making investment decisions. The findings support policymakers’ decisions to mandate the implementation of ISA 701, which requires the disclosure of KAMs. Full article
(This article belongs to the Special Issue Advances in Corporate Disclosure Practice)
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18 pages, 352 KiB  
Article
The Determinants and Impact of Key Audit Matters Disclosure in the Auditor’s Report
by Hidaya Al Lawati and Khaled Hussainey
Int. J. Financial Stud. 2022, 10(4), 107; https://doi.org/10.3390/ijfs10040107 - 23 Nov 2022
Cited by 12 | Viewed by 5227
Abstract
We investigate the determinants of key audit matters (KAMs) in the auditor’s report. In particular, we examine the impact of overlapped audit committee (AC) directors on the quantity of KAMs disclosure. We also examine the consequences of KAMs disclosure. We test to see [...] Read more.
We investigate the determinants of key audit matters (KAMs) in the auditor’s report. In particular, we examine the impact of overlapped audit committee (AC) directors on the quantity of KAMs disclosure. We also examine the consequences of KAMs disclosure. We test to see if the quantity of KAMs disclosure affects audit quality. Oman was among the early adopters of KAMs disclosure requirement. We, therefore, use the content analysis approach to count the number of KAMs disclosed in auditor reports of financial firms listed on the Muscat Stock Market for the period of 2014 to 2019. We use regression models to test our hypotheses. Overlapped audit committee directors are measured as the ratio of AC members who also serve on other committees within the same firm. We use audit fees as a proxy for audit quality. We find that overlapped AC membership positively affects KAMs disclosure due to the knowledge spillover that results from serving on multiple committees. We also find that KAMs disclosure positively affects the quality of external auditing. We make an important and novel contribution to the literature on financial reporting, auditing and corporate governance. We add to the literature by providing the first empirical evidence of the impact of overlapped AC members on KAMs disclosure and the impact of KAMs on the quality of external auditing. The findings provide important policy implications to exceedingly appoint overlapped members on AC to enhance the level of KAMs disclosure, which leads to an improvement in audit quality. Full article
(This article belongs to the Special Issue Advances in Corporate Disclosure Practice)
11 pages, 265 KiB  
Article
Earnings Management and Annual Report Readability: The Moderating Effect of Female Directors
by Elvia R. Shauki and Eva Oktavini
Int. J. Financial Stud. 2022, 10(3), 73; https://doi.org/10.3390/ijfs10030073 - 28 Aug 2022
Cited by 5 | Viewed by 2947
Abstract
The purpose of this study is to examine the influence of earnings management on the readability of annual reports while also examining the moderating role of a female director. In particular, the readability of a company’s annual report will be seen from the [...] Read more.
The purpose of this study is to examine the influence of earnings management on the readability of annual reports while also examining the moderating role of a female director. In particular, the readability of a company’s annual report will be seen from the management perspective using the FOG index on the annual reports of companies listed on the Indonesia Stock Exchange during 2015–2018 (excluding the financial sector), with a total sample of 996. This research confirms that companies that conduct earnings management can make complex company annual reports that are difficult to read as these companies tend to hide earnings management practices. Thus, the users of annual reports will find it difficult to identify these practices. This study confirms the mathematical theory of communication that annual reports are a communication tool for companies and, therefore, must be free from financial manipulation such as earnings management because this action will give a bad signal. Moreover, the moderating effect of female directors was not proven. This implies that female directors in Indonesia had not been able to moderate the readability of annual reports; one possibility might be due to the composition of female directors, which was relatively small. Full article
(This article belongs to the Special Issue Advances in Corporate Disclosure Practice)
14 pages, 297 KiB  
Article
The Effects of New Accounting Standards on Firm Value: The K-IFRS 1116 Lease
by Hae Jin Chung
Int. J. Financial Stud. 2022, 10(3), 68; https://doi.org/10.3390/ijfs10030068 - 16 Aug 2022
Cited by 3 | Viewed by 2826
Abstract
We examine how the implementation of the K-IFRS No.1116 Lease affects firm value. This new accounting standard mandates capitalization of all leases, resulting in changes in the key accounting leverage ratios and rates of return. The contracting costs hypothesis suggests that changes in [...] Read more.
We examine how the implementation of the K-IFRS No.1116 Lease affects firm value. This new accounting standard mandates capitalization of all leases, resulting in changes in the key accounting leverage ratios and rates of return. The contracting costs hypothesis suggests that changes in accounting techniques have economic consequences because lending contracts are expressed in terms of accounting numbers. We find that capitalizing operating leases, which were off-balance-sheet transactions prior to K-1116 implementation, increases the lease liabilities-to-assets ratio and lease liabilities-to-debt ratio significantly. While a firm’s business fundamentals do not change with the K-1116, we show that the value of firms that use high levels of operating leases decreased with the implementation of K-1116. The declines in firm value are significant for the subgroups of firms that are likely to raise external financing, suggesting that the implementation of K-1116 increased the level of financing frictions and decreased the value of future investment opportunities. Full article
(This article belongs to the Special Issue Advances in Corporate Disclosure Practice)
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