Search

We examine whether the characteristics of chief financial officers (CFOs) are associated with real earnings management (REM). Using hand-collected data on CFOs’ characteristics, we find that female CFOs and highly visible CFOs are associated with lower levels of REM, while CFOs with an MBA or with an accounting background are associated with higher levels of REM. Our analyses also reveal that the combination of CFOs’ characteristics is important for understanding the association between CFO profiles and REM. Overall, this study identifies the potential profiles of CFOs who are more likely to implement business strategies aimed at managing earnings.

Purpose The current paper aims to understand whether fair value accounting (FVA) affects analysts’ loan approval decisions and default risk judgments. Design/methodology/approach This study focusses on three issues: unrealized gain or loss resulting from FV measurement recognized in other comprehensive income (OCI), recognition of assets at FV or historical cost and the disclosure or non-disclosure of the FV of collateral assets. It uses an experiment carried out with a sample of 29 CFA analysts. Findings The results show that all three issues have a significant effect on analysts’ judgment and decision-making in processing FV estimates. Originality/value The paper extends knowledge on how financial analysts perceive FV estimates and disclosure and may help the accounting standard boards assess the challenges facing analysts when they apply professional judgments in interpreting FV measurements and disclosures. Moreover, it offers fresh views to the debate on the decision usefulness of FVA, particularly relevant in the post-implementation review of IFRS 13.

This study aims to understand whether the disclosure provided by the Integrated Performance Plans (IPPs) issued by Italian State Universities is substantive or for-mal. In particular, this research, using the interpretative lens of Middle Range The-ory (MRT) by Habermas, investigates the level of interrelationship that exists be-tween the different sections of the IPP (strategic planning, organizational perfor-mance, risk analysis, transparency and anti-corruption, and individual perfor-mance) and it verifies the degree of disclosure thoroughness contained in these dif-ferent sections. Analysing a sample composed by the last IPP published by 66 Ital-ian Universities and adopting a meaning-oriented content analysis, final results show that although the findings show a generally positive level of information, in the preparation of the Plans a prevalent attitude of formal compliance with the law seems to persist. As the meaning-oriented content analysis has shown, in most cases disclosure is used by Italian universities for essentially symbolic purposes. The analysis offers the chance for a twofold contribution to theory and practice. Firstly, it expands the theoretical debate offering newer insights on how infor-mation is disclosed and the factors influencing disclosure behaviours towards spe-cific accountability purposes. Secondly, it presents interesting practical and policy-making implications, suggesting them to pay effort in designing solutions to ease the substantive operationalization of holistic systems, not fully achieved yet. .

Purpose This study aims to investigate the readability of financial risk disclosure divulged by listed banks of the first five European countries according to gross domestic product. Design/methodology/approach This study adopts the management obfuscation hypotheses and tests data gathered for a sample of 790 observations from listed banks in Europe covering the 2007–2018 period. This study uses a readability index (Gunning’s fog index) as the dependent variable for measuring the readability of banks’ mandatory financial risk disclosures. Moreover, it relies on a completeness index, discretionary accruals and several control variables for identifying the determinants of risk disclosure readability using ordinary least square regression for testing the hypotheses. Findings The findings show the existence of a positive relation\nship between readability and completeness of risk disclosure. In contrast, a negative relationship exists between readability and banks’ discretionary accruals. Originality/value This study expands the stream of accounting literature analyzing the lexical characteristics of narrative risk disclosure, and, by focusing on the financial risk disclosure of banks, it extends the readability-related debate, which has primarily concentrated on other types of disclosure to date. This study is relevant to regulators and policymakers for fostering reflections as actions for improving the financial risk disclosures readability. This study is also of potential interest for investors to better delve into the questions surrounding risk disclosure.

The eight papers included in this issue offer the opportunity to capture the latest trends in on-topic researches. The thread of this issue concerns the centrality of the emerging marketing and economies in developing new knowledge and understanding in corporate governance studies.

The aim of this study is to test whether financial risk disclosures required by IFRS 7 and Pillar 3 are value relevant for investors to support them in their investment decisions. The sample in the...

The aim of this paper is to understand what factors affect the thoroughness of the in-formation provided by Italian Universities in their Performance Plans. The recent reforms that characterized the Italian Higher Education led a full revision of the ad-ministrative apparatus. It not only encompassed a switch from cash accounting to accrual accounting, but suddenly gained wider strategic relevance, as attention is also devoted to the coherence between planning activities and reporting outcomes in order to ensure transparency and broader accountability. Hence, drawing on the le-gitimacy theory, we conducted a panel analysis with fixed effects on data gathered through a meaning-oriented content analysis of 132 Plans. The findings show that, early transition to accrual accounting, the adoption of management accounting tools and geographical position influence the thoroughness of disclosure towards specific accountability and legitimacy wishes. The findings offer noteworthy contributions not limited to the academic debate, but valuable for policy makers and practitioners.

This paper deepens the countervailing relationship between control and innovation in highly innovative networks. It adopts a middle range theory perspective [Broadbent and Laughlin, 2013. Accountin...

Standard-setting institutions require legitimacy to survive. Prior research infers their legitimacy mainly from the characteristics of standard-setting processes rather than from the legitimacy judgments of important constituencies. Using a survey of financial analysts, we quantitatively assess users’ perceptions about the characteristics of standard-setting processes, the relationships between these characteristics and legitimacy perceptions, and users’ legitimacy perceptions. Our first contribution is to use a sample of sophisticated financial statement users to empirically examine the theoretical proposition that users’ legitimacy perceptions could be a function of the perceived characteristics of standardsetting processes. We find that users’ perceptions about the characteristics of standardsetting processes affect the legitimacy they attribute to these processes. A combination of pragmatic, moral and cognitive legitimacies are at play in such legitimacy assessments. Our second contribution is to point out the importance of separately investigating various types of legitimacy, as users’ perceptions about them vary. Lastly, our third contribution is to highlight that the distinction between users’ perceptions of the characteristics of standardsetting processes and their legitimacy perceptions is not always clear-cut and that there are multiple interrelations among these concepts.

PurposeThe purpose of this paper is to deepen the countervailing relationship between control and innovation in knowledge-intensive complex organizations. It adopts a middle range theory perspective (Broadbent and Laughlin, 2013) to explore how control systems and innovation dynamics interact and shape each other in the contexts of high complexity and intensive knowledge creation.Design/methodology/approachThe paper employs single case study of a research-intensive biotech network located in Southern Italy, focusing on the change in the management accounting practices fostered by evolving environmental conditions and regulations that the network has faced in recent years.FindingsThe paper finds out how successful organizational changes are facilitated by the implementation of innovative control devices, favoring informal collaborative relationships, which in turn contribute to further innovate and to share knowledge and capabilities within the organization.Practical implicationsThe findings are relevant to all organizations involved in complex processes of co-production of knowledge and innovation. They allow for unpacking the “black box” of the interplay between innovation and control, which is becoming increasingly central to these organizations and to policy makers.Originality/valueThe value of the study lies in its ability to depict how contrasting and molding forces in control systems and innovation dynamics contribute to re-shape a complex organizational setting. The study offers a newer perspective of analysis to interpret the role of control systems in innovative networks, thus contributing to the growing academic debate on the antecedents and facilitators of knowledge sharing and knowledge integration.

This research focuses on the Performance Plans drawn up by Italian universities, to understand whether the information conveyed in this documents are able to achieve increasing transparency and greater accountability - fulfilling the willingness expressed by recent regulatory attempts - or if, conversely, they constitute a mere symbolic compliance effort. The study embraces the legitimacy framework and relies upon a meaning oriented content analysis of 66 Performance Plans. The main findings show little strategic value underlying Performance Plans, as well as the persistence of certain information gaps on key areas of strategic importance, offering a noteworthy contribution not restricted to the academic debate, but valuable for policy makers and practitioners.

The aim of this paper is to investigate the level of comparability of the IFRS 7 Financial Instruments Disclosure in banks’ annual reports across different European countries (Italy, Spain, France, Germany and UK) from 2007 to 2014. The banking sector seems to be particularly concerned with the issue of financial risks, especially during the most recent global financial crisis. In addition, risk disclosure has led to vigorous debates at both the national and international levels among scholars and standard setters. To test the comparability across countries, we use the van der Tas C index. Our results show that there is a medium level of comparability. Despite the accounting boards’ and authorities’ commitment to regulating this information, there are still substantial differences in the practices of risk disclosure, which have negative effects on comparability. Our results show that an increase in the degree of comparability exists during the observed period but we are still far from a condition of full comparability due to the presence of factors other than regulations that may affect accounting practices. These findings could be helpful for the decisions of institutional regulatory bodies and for investors.

While a considerable amount of research has already been carried out into the corporate governance determinants of non-financial risk disclosure in companies in the private sector, such determinants in the annual reports of listed Governmentowned Companies (LGCs) have yet to be investigated fully. This study attempts to complete the picture. Italian LGCs have been selected for analysis and agency theory has been applied in the public sector under the accountability paradigm. The research investigates whether non-financial risk disclosure provided in the Management Commentary (MC) of Italian LGCs may be affected by ownership concentration, corporate governance mechanisms and company-specific features. The issue is of particular importance in a country where Government intervention has significantly affected its economic development since the nineteenth century. Our findings show that there is a relationship between the level of non-financial risk disclosure and Board diversity, leverage and sector. Our findings also reveal some useful insights concerning policy makers and standard setters.

Disclosure consists of the display and communication of information to parties in order to make them advised on a specific issue and allow to predict or assume appropriate decisions. Disclosure is a crucial topic in accounting and finance studies, even if it has been considered also in other strands. Generally, disclosure has been conceived as a tool for the functioning of an efficient capital market related to the optimal allocation of savings to investment opportunities. In particular, firms would like to attract the highest amount of resources by investors to support their activities. However, the relation between investors and the firm is not linear and two kinds of problems mainly arise. First, the firm has better information than savers on the real value of investment opportunities and tends to overstate. Savers, hence, face an asymmetry information problem. Second, once savers invest, firms have an incentive to expropriate their savings. In this regard, between firms and investors, information asymmetries and conflicting interests create a so-called lemon problem (Healy and Palepu 2001). Conflicting interests, however, are peculiar in state-owned enterprises (SOEs). SOE usually encompasses firms where the state government or local authorities either (1) own over 50 % of the share equity or (2) own less than 50 % of the share equity but are entitled to appoint of the majority of directors and consequently prevail in voting at general meetings. In most Organization for Economic Cooperation and Development (OECD) countries, SOEs are a means for national and local governments to support the economic growth and the development of a territory or a sector, and they account for a large part of gross domestic product. They manage public money and pursue social goals that coexist with economic objectives. Their inherent mandates, inevitably, clash with the economic rationale that determines profitable decision-making. In addition, SOEs often constitute a particular blend of characteristics that are conducive to conflicting tendencies: political interests may compromise efficiency and effectiveness; directors may favor their own personal interests and gains, and government ownership, in whole or in part, entails reduced risk of failure.

This paper aims to examine the entrepreneurial intention of undergraduate students, using a modified version of Ajzen’s theory of planned behavior (TPB), considering the perception of corruption. We conducted a questionnaire survey with Italian students. There were a total of 350 student participants. In order to analyze the data collected with the questionnaire, structural equation modeling is provided. Our results indicate that the majority of students have strong entrepreneurial intention but due to the effect of corruption students are dissuaded from engaging in entrepreneurship. Corruption has a negative effect on students’ entrepreneurial behavior. This paper provides a new model that helps to understand the students’ entrepreneurial intentions considering the corruption perception.

This paper aims to explore the readability of the disclosure provided by Italian universities that changed their accounting systems to accrual accounting over the past three years. The transition from cash to accrual accounting not only concerns financial statements, but also the related notes. Indeed, the Italian government has paid great attention to the narrative sections of reports due to their capacity to provide more transparency. To provide better accountability, financial statements must be readable for all stakeholders. We used two different indexes, namely the Gunning fog and GULPEase indexes. The analysis was conducted on a sample of universities to analyze the narrative sections of the first financial statements prepared according to the new accounting system in 2012–2014. The final sample comprised 32 Italian universities. The research results demonstrated low readability in the balance sheets of Italian universities after switching to accrual accounting, illustrating an unsatisfactory level of accountability.

This paper aims to find out what are the factors that favour an innovation in performance measurement deemed to be effectively implemented and capable to assess museums' performance. The study is grounded on the link between accounting logic and accountability within public sector organisations broadened by taking into account the issues relating to cultural value. The framework of this study maintains that the multidimensional elements constituting the cultural value, if interpreted through the lenses of the accountability process - by identifying subjects, accountability demands, equity implications and value dimensions - can ease the realisation of a holistic performance measurement system able to capture both the economic-financial and the social-environmental results. We use the case of the British Museum showing how it has been able to effectively innovate its performance measurement system towards greater accountability.