1,720,987 research outputs found
How has the financial crisis affected earnings management? A European study
No full textThe article aims to investigate whether and how in the European Union (EU), the burst of the 2008 financial crisis affected misrepresentation of financial information due to earnings management. By analysing a sample of 11 844 firm-year observations listed in the EU over the period 2006–2012, an event study methodology allows us to calculate and compare country-by-country abnormal accruals over the estimation period and over the event period. Our findings validate our research hypothesis and suggest a decrease of misrepresentation in the large majority of the European countries after the burst of the financial crisis. The results take part in the debate in the accounting literature about the change of earnings management over a financial crisis and have several implications for standard setters and regulators that could learn how the common incentives of entities to attract potential investors during a crisis could lead them to provide a high-quality financial reporting
The effect of female presence on corporate boards of directors on the value relevance of accounting amounts: empirical evidence from the European Union
Full text linkThis paper investigates the ability of female presence to affect value relevance. Focusing on a sample of 487 entities listed in 18 European countries over the period 2009–2017, it uses a price model to assess the ability of female presence to affect the value relevance of earnings and book value disclosed in the consolidated annual reports of the firms analyzed. Findings offer evidence that female presence on corporate boards increases the value relevance of accounting amounts, providing insights that board composition affects investors’ judgments. Taking into account that in the literature scholars have shown that female presence is associated with market prices, this paper provides a contribution, showing its ability to affect the value relevance of earnings and book value of equity. The research findings suggest that not only the quality of accounting standards but also other factors such as female presence on the corporate board of directors affect accounting practices and, in turn, the quality of financial reporting and value relevance. Its findings offer an additional support to the European Union Gender Equality Strategy 2020–2025 according to which an increase in women's participation in the labor market has a strong, positive impact on the whole economy
Corporate governance, legal systems and value relevance of fair value estimates: empirical evidence from the EU banking sector|Gobierno corporativo, sistemas legales y relevancia de valor de las estimaciones de valor razonable.Evidencia empírica del sector bancario de la ue
No full textScholars agree that the role played by corporate governance mechanisms is likely to be affected by the quality of the legal systems in which firms operate. This paper investigates whether the quality of firm-level corporate governance is more valuable in countries with a high- or low-quality legal system. To do so, the paper focuses on the value relevance of fair value hierarchy disclosed by the European financial entities listed in 14 stock markets over the period 2011-2015. Findings show that differences in the quality of legal systems positively affect the value relevance of fair value estimates and provide evidence that the effect of firm-level corporate governance on the value relevance of fair value assets and liabilities is stronger in countries with high-quality legal systems. Our study contributes to the literature to the extent to which it shows that the ability of corporate governance to improve the value relevance of fair value measurements depends on the quality of the legal system under which firms operate. For this reason, our results complement findings reported by prior studies that have separately investigated the effect of the quality of corporate governance and of investor protection on the value relevance of fair value measurement
The effect of corporate governance and investor protection environments on the value relevance of new accounting standards: the case of IFRS 9 and IAS 39
Full text linkThe first-time adoption of IAS/IFRS accompanied by the issuance of new international accounting standards has provided mixed results regarding their ability to improve accounting quality. A possible reason is that not only the quality of the standard-setting process, but also other factors might affect accounting quality and one of its dimensions, namely, value relevance. By analysing data from a sample of 316 financial entities listed in 43 countries from all over the world and adopting IFRS 9 in place of IAS 39 as of 1st January 2018, this paper tests whether the quality of firm-level corporate governance and country-level investor protection environments affects the value relevance of equity values calculated according to the requirements of IFRS 9 and IAS 39. The results suggest that, despite both accounting standards providing investors with value relevant information, in the presence of high-quality corporate governance or a high-quality investor protection environment, IFRS 9 is more value relevant than IAS 39, whereas the opposite is true in the presence of low-quality corporate governance or a low-quality investor protection environment. The research results provide the first empirical evidence of the value relevance of the new accounting standard on financial instruments and contribute to the debate on the existence of other factors that, together with the quality of the IASB standards, affect the quality of financial reporting
Non-Financial Resources to Enhance Companies’ Profitability: A Stakeholder Perspective
Full text linkPurpose
This study aims to investigate the impact of stakeholders’ nonfinancial resources (NFRs) on companies’ profitability, filling a significant gap in the literature regarding the role of NFRs in value creation.
Design/methodology/approach
Data from 76 organizations from 2017 to 2019 were collected and analyzed. Four primary NFRs and their key value drivers were identified, representing core elements that support different dimensions of a company’s performance. Statistical tests examined the relationship between stakeholders’ NFRs and financial performance measures.
Findings
When analyzed collectively and individually, the results reveal a significant positive influence of stakeholders’ NFRs on a firm’s profitability. Higher importance assigned to NFRs correlates with a higher return on sales.
Originality/value
This study contributes to the literature by empirically bridging the gap between stakeholder theory and the resource-based view, addressing the intersection of these perspectives. It also provides novel insights into how stakeholders’ NFRs impact profitability, offering valuable implications for research and managerial practice. It suggests that managers should integrate nonfinancial measures of NFRs within their performance measurement system to manage better and sustain companies’ value-creation process
Assessing stakeholders’ perception influence on companies’ profitability: evidence from Italian companies
No full textThe stakeholders’ view represents one of the key dimensions that affect companies’ performance, directly impacting the managerial decision-making process. However, despite many theoretical studies that suppose the relevant role covered by the stakeholders’ perception in the value creation process of organizations, no empirical evidence on whether and how it affects companies’ profitability has been produced. In this context, by focussing on a sample of 141 firm-year observations over the period 2017–2019, this paper uses a linear regression model to investigate and fill this gap. Findings significantly show that a high stakeholders’ perception score (SPS) increases firms’ profitability, providing insights that implementing a strategy oriented to stakeholders’ engagement affects a company’s economic performance. It is suggested that practitioners integrate stakeholders’ perception into performance management system (PMS) processes to achieve economically and environmentally-oriented performance
Auditor Independence and Value Relevance in the European Banking Sector: Do Investor Protection Environment and Corporate Governance Matter?
No full textOur study explores the effects of statutory auditor’s independence on value relevance,
measuring the different impact against the quality of country-level investor’s protection and firm-level corporate governance. A sample of 98 European financial entities listed on the stock markets of 15 countries in the period from 2009 to 2014 is used to measure statutory auditor independence by taking into account audit firm tenure, partner tenure, and the percentage of nonaudit fees. Findings demonstrate that in different investor protection environments or in the presence of differences in corporate governance quality, phenomena that could be interpreted as a deterioration of the auditor independence do not necessarily determine a decrease in the value relevance of accounting numbers. Rather, they may determine a possible increase if the knowledge spillover effects prevail over the perception that independence has deteriorated. These findings add to the literature and provide regulators with insights by suggesting that not only accounting and auditing practices but also country features or firm-level corporate governance quality might influence the outcome of reforms on the independence of the statutory auditor as well as value relevance judgment
Is regulatory capital more value relevant than book value of equity? A cross-country analysis
No full textThis research aims to enter in the debate about the pros and the cons of regulatory capital (RC) disclosure providing empirical evidences that this measure of capital is more value relevant than book value of equity (BV). To verify our hypothesis, we collected data from the consolidated annual reports issued over the period 2009-2012 by 170 entities listed in 22 of the 27 countries that belong to the Basel Committee and that issue their annual reports complying with the IASB standards. Methodologically, by using a modified version of the Ohlson (1995) model, we use five different techniques that confirm that the RC is more value relevant than BV. So, our findings show that not only RC is issued to strengthen the soundness and the stability of the international banking system and to diminish an existing source of competitive inequality among international banks, but also to provide useful information to investors for their economic decisions
La value relevance dei valori di bilancio delle imprese in perdita. Profili teorici ed evidenze empiriche
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