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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. .

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...

This paper aims to investigate whether and how enterprise risk management (ERM) quality may be influenced by national culture. Using a sample of 105 banks from 21 countries over the period of 2013-2020, we document that power distance, masculinity, uncertainty avoidance and long-term orientation are significantly associated with ERM quality. Our research contributes to the existing risk literature by highlighting how the dimensions of national culture impact ERM quality. The article also discusses how the cultural dimensions of a national culture embedded in the organizational values can influence the quality of bank's risk management processes. This study helps banking regulators by providing a clear picture of how an informal institution, such as national culture, contributes to explaining differences in the quality of ERM implementation.

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 purpose of this paper is to investigate whether the firms with the same Big Four audit firm and from the same legal system disclose more comparable non-GAAP measures. Using 23,436 pairs of European firms, we hand-collected infor-mation on the non-GAAP measures disclosed in the statement of comprehensive income. The results showed that the firms with the same Big Four audit firm or from the same legal system are positively and significantly associated with non-GAAP comparability. Our work adds to the studies on accounting comparability. Furthermore, it provides fresh insights that support the latest IASB activity on the Primary Financial Statement project, under which the standard setter has en-dorsed ED/2019/7 General Presentation and Disclosures.

We provide evidence that the differences in economic growth and stability of firms dur- ing different stages of their life cycle encourage managers to manage the reported earn- ings differently to achieve their goals. Our findings support the expectation that manag- ers adjust the reported earnings upward using positive discretionary accruals during the introductory and decline stages of firm life cycle. The upward adjustment of reported earn- ings during the introductory stage enables them to achieve the objective of sending posi- tive signals on firm performance when the firm is in a formative stage, and also provides a better base for prediction of future earnings. The upward adjustment of reported earnings during the decline stage are expected to enhance firm’s life, which would enable manag- ers to take remedial actions to improve firm performance, especially when the firm is in a distress situation. On the other hand, our findings show that managers may consider using negative discretionary accruals during the growth and maturity stages so that they can save some earnings for use during later years when firm performance compared to market expectations is weak. The managers are, however, not likely to adjust the reported earn- ings downward when the reported earnings fall short of market expectations. Additionally, we find that large institutional shareholdings perform effective monitoring and discourage managers to use discretionary accruals because their use may result in lower reliability of reported earnings.

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 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.

PurposeThis study aims to examine the impact of corporate board characteristics and country-level legal system on corruption disclosures mandated by the recent European Union (EU) Directive No. 95/2014.Design/methodology/approachBased on a sample of 234 European listed companies and covering the 2017–2018 period, this study uses regression analyses to empirically test the association of independent directors, board gender diversity and country’s legal system with disclosure of corruption information.FindingsThe presence of independent directors and female directors is positively associated with corporate corruption disclosures. The association between independent directors and corruption disclosures is especially strong when firms are operating in the common law environments.Research limitations/implicationsThis study is exclusively focused on larger European listed firms and therefore the findings may not be valid for small and medium firms.Practical implicationsThis study provides important information to policymakers to have a better understanding of the factors that influence firms’ disclosure policy on corruption-related activities. It also offers useful information to investors because it shows firms’ propensity to disclose corruption information that would enable them to evaluate their risk and return better.Originality/valueTo the best of the authors’ knowledge, this is the first study that evaluates firms’ response to the EU Directive No. 95/2014 in disclosing corruption information after its implementation in 2017. It documents the effective role played by female directors in influencing firms’ information disclosure policies. It also confirms that common law environment is more conducive to disclosures.

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.

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.

This study investigates the effects of firm and country factors, considered as determinants of the financial instruments risk disclosure (FIRD) proxied by IFRS 7 in the European banking system. We select 582 banks-year observations based on the largest five European economies (France, Germany, Italy, Spain and the UK) as provided by the International Monetary Fund (IMF). Our analysis covers a period of 8 years (2007-2014) and adopts an OLS model. Results show that both firm (the type of auditor, board size and profitability) and country factors (financing environment, regulatory environment, and organizational status) affect FIRD. Limitations for this paper could relate to country selection, as well as on the breadth of the sample. Nevertheless, these aspects could unveil possible areas of future inquiry. The contribution of the study is twofold. It enriches the literature about firm and country determinants on financial instruments risk disclosure, as combined rather than single-standing variables. Yet, it draws the attention of banks’ management and investors on what the crucial factors to reach an optimal level of FIRD are and gain the confidence of capital markets, reducing information asymmetries. This is the first empirical investigation on the determinants of FIRD, using IFRS 7, in the European banking sector that adopts firm and country factors in a combined effort.

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.

Purpose This paper aims to examine the usefulness of disclosures provided by Egyptian firms in the management report from the viewpoint of financial analysts and institutional investors. Design/methodology/approach Institutional investors are surveyed to determine whether disclosures are meeting the needs of these financial statements’ users. The final sample consists of 78 financial analysts who work at stockbrokerage firms and 36 institutional investors who work in Egyptian banks and insurance companies. Findings The main findings reveal that investors view mandatory and voluntary disclosures differently. Some voluntary disclosures are more useful than mandatory disclosures, which highlights a gap between the regulations and users’ information needs. Moreover, the findings show that respondents consider information related to ownership structure more important than information on risks and firms’ future performance. Research limitations/implications This study enriches the scientific debate on the usefulness of disclosures provided in the management report. It might also encourage other researchers to focus on investigating different types of information that may have a significant influence on the decision-making process. Practical implications The findings will be useful to regulators to improve the current rules of disclosures. In addition, these results will also be helpful to managers because they highlight the disclosure items that are considered important by users. Originality/value This study provides evidence on how users perceive the usefulness of information disclosed in the management reports for their decision-making in an emerging capital market. Even though previous studies investigated the usefulness of management reports, no one of them emphasized the users’ viewpoint.

The aim of this study is to investigate what motivates financial analysts to participate in the accounting standard-setting process. We focus on financial analysts because they are an important group of the financial statements users. The paper employs the meso-level approach used by Durocher et al. (2007) that integrates the macro domain’s focus on the standard setters with the micro domain’s focus on individuals and thus it links the characteristics of due process for standard setting with users’ attitudes. We develop a survey for the Chartered Financial Analysts Institute (CFA), which is one of the largest associations of investment professionals in the world, and collected data through computer-assisted Web interviews. We use a structural equation model with PLS to test our hypotheses. Our main findings confirm that a combination of micro and macro domains explains the frequency of financial analysts’ participation in the standard setting process. This investigation, thus, deepens our understanding of motivations behind analysts’ involvement in the accounting standard-setting process and delivers both theoretical contributions and practical insights.

Using a unique dataset of 1270 Egyptian listed firm-year observations over 2003-2014, we investigate whether the basic premises according to the pecking order or market timing theories provide an explanation for the capital structure mix of Egyptian firms. Current work has provided mixed evidence in regard to these capital structure theories in the Egyptian context. Our results show that the most profitable firms are less likely to resort to external financing. However, in case where financial deficits exist then equity issued appears to track the deficit rather than debt. Moreover, issuances appear to track deficit periods instead of market timing attempts. Results obtained support notion that the typical Egyptian firm follows revised pecking order theory, with the importance of the four conventional determinants, profitability, tangibility, size effect and growth opportunity in debt holdings. © 2017 Elsevier B.V.

The usefulness of carbon disclosures has been questioned in the literature because they do not truly reflect firm’s carbon performance, suggesting that they may not be useful for risk evaluation and investment decisions. This study empirically tests the usefulness of carbon information voluntarily disclosed by the Italian firms. Our results based on the price model show that there is a positive association between the stock price and carbon disclosures, suggesting that investors find carbon information useful for their investment decisions. We find similar results based on the market valuation model. Additionally, the results reveal that the positive association is especially strong for firms that have established environmental committees on a voluntary basis and also for firms from the highly polluting industries defined by the EU_ETS program, confirming that investors’ positive response is especially strong to carbon disclosures by firms from the highly polluting industries. We also find that the market reacts positively to carbon disclosures by firms with a higher percentage of independent directors on their corporate boards, but the positive association is marginally significant.

This paper highlights the current accounting approaches to greenhouse gas (GHG) emissions. In particular, it explores and critically discusses the treatment of emission rights (ER) under carbon trading schemes from two distinct angles. On the one hand, it reviews the domestic solutions adopted by accounting bodies and, on the other, it examines current practices followed by firms in the European Energy Exchange (EEX). Regarding the former group, there are substantial differences, which would suggest some potential difficulties in finding a common solution for the future. Not surprisingly, there is still a diversity of approaches with regard to how firms report ER. Although the most common practice is not to include free ER in the main financial statements, the proportion of firms that recognize both ER and liabilities is larger than in prior studies (Warwick and Ng, 2012; Lovell et al., 2010; Ascui and Lovell, 2012; Black, 2013). Leaving aside sample differences, the new auctioning system introduced by Phase 3 of the European Emission Trading Scheme (EU ETS) may have affected firm behavior. Furthermore, it is also worth pointing out the decrease in non-disclosure. Interestingly, we show that local accounting rules on ER issued by EU bodies do not generally affect corporate financial reporting. To the extent this study updates the knowledge about current institutional developments and company practices on ER, it could help the International Accounting Standard Board (IASB) to develop a standard.

This study focuses on the issues relating to the implementation of management accounting systems in complex settings such as archeological sites. The aim is to understand the conditions under which the implementation of performance management systems (PMS) may enable cultural organizations to fulfil their multiple objectives and the factors which play a crucial role in such dynamics. Focusing on the Herculaneum Conservation Project (HCP) the study explains how PMS came to be implemented having been made acceptable to all parties involved. The Middle Range Theory as developed by Broadbent and Laughlin (Accounting control and controlling accounting: interdisciplinary and critical perspectives, Bingley, Emerald, 2013) was utilized to explore how the PMS change took place in the HCP, and focus on the factors influencing this process. The findings reveal that the change in the PMS benefited from the involvement of a multidisciplinary Specialist Work Group. This involvement reduced the natural tendency to resist the forces of change and increased the commitment of the various groups of stakeholders to the new culture. The findings reveal how PMS were developed in the context of a multifaceted approach to change, allowing us to draw both theoretical and practical lessons that may be brought to bear in other complex contexts.

The purpose of this research is to examine how environmental committees, institutional shareholdings, and board independence affect managerial carbon disclosure decisions, particularly those of firms belonging to highly polluting industries. We focus on Italian firms that operate in a code law environment but that have the option either to adopt the unitary corporate structure prevalent in common law countries or to retain the dual corporate structure used in code law countries. We use weighted and unweighted carbon disclosure indexes based on the Kyoto Protocol requirements. The findings show that all factors greatly affect voluntary carbon disclosure and that their impact is especially strong for firms in highly polluting industries. This study has important implications for managers and regulators.

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.

This study aims to examine the influence that some characteristics of the board can have on reporting choices on greenhouse gas (GHG) emission, which has become a remarkable topic over the last years. Using the stakeholder theory as theoretical lens, we intend to verify whether the board composition and board diversity represent a significant determinant of the carbon disclosure. Recent literature highlights the urgent need to provide input on the issue of carbon accounting and disclosure. Thus, it is interesting to examine what are the main governance determinants that motivate companies to take accountability paths on this particular area. It is widely accepted, in particular, that the independent directors positively influence the provision of voluntary information, because of the more pronounced monitoring action that they exercise, to protect shareholders and stakeholders. Similarly, the presence of women and different ethnic membership, as aspects of board diversity, also ensure a more efficient functioning of the board and, therefore, stimulate impressive accountability mechanisms. The analysis is conducted in Italy because the Government has recently declared the reduction of emissions (in accordance with the Kyoto Protocol parameters) as a national policy objective to be achieved until 2020. The empirical analysis was conducted through the OLS method which has confirmed that the inclusion of independent directors, as well as a more marked diversity of the board - in the form of gender and geographical component - impacting positively on the voluntary carbon disclosure. Board independence and board diversity are key factors that encourage most marked transparency mechanism for the benefit of stakeholders. Our findings should be useful for top managers and regulators who are interested in improving corporate governance practices and climate-change strategies.

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.

The determinants of risk disclosure in the annual reports of listed state-owned enterprises (SOEs) have yet to be fully explored. This paper examines the potential impact of the composition of the boards of directors and other company-specific features on risk disclosure levels. The presence of women on a board made a significant difference to risk disclosure, as did the age of board members. Board directors having an accounting or finance/business qualification affected risk disclosure negatively; company size and an internet visibility were positively related to risk disclosure. Although an Italian study, the lessons here will have application to academia and to practitioners, policy-makers and standard-setters worldwide.

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.

SOMMARIO: 1. Introduzione allo IAS 36. – 2. Gli indizi di impairment. – 3. L’impairment test: il calcolo del valore recuperabile. – 3.1. Calcolo del fair value al netto dei costi di dismissione. – 3.2. Calcolo del valore d’uso. – 3.2.1. La stima dei flussi attesi. – 3.2.2. L’individuazione del tasso. – 4. L’impairment test: la rilevazione contabile della perdita. – 5. La definizione della Cash Generating Unit. – 6. L’avviamento e la Cash Generating Unit. – 7. La imputazione della perdita di valore di una CGU. – 8. La ripresa di valore. – 9. Informazione extracontabile.