1,720,975 research outputs found
Accounting Restatements and Key Audit Matters disclosure
No full textThis monograph is one of the few books to investigate the understudied but fascinating topic of accounting restatement in the European context.
In the first chapter, substantial changes over time in treatments for correction of errors under the International Financial Reporting Standards and Italian generally accepted accounting principles are examined.
Following that, a brief overview of the literature, mainly concerning the United States environment, and characteristics of and trends in accounting issues drawn from restatements announced by a sample of firms listed in European countries from 2016 to 2020 are presented.
After a review of multi-country empirical research, chapter 3 presents an assessment of the frequency and severity of restatements at the country, industry and year levels.
Finally, chapter 4 considers the forewarning effect of topics communicated in the key audit matters in relation to subsequently revealed account-specific misstatements by proposing a new matching procedure.
Throughout the work, the author provides frequent comparisons with findings obtained by United States scholars
RISK MANAGEMENT AND COMPANY SIZE: A SURVEY OF ITALIAN PRIVATE COMPANIES
No full textThis paper aims at studying the state of the art of enterprise risk management (ERM) within private firms, and it improves the knowledge of how firm size influences risk department settlement decisions inside micro, small, medium and big unlisted corporations. This paper contributes to the literature with an empirical analysis of whether private firms consider it worth
managing risk using a dedicated risk management department although it is not imposed by any mandatory rule or by self-regulation. Submitting a questionnaire to a sample of Italian unlisted companies, the authors find that 67% of respondents have no risk management system and only 10% are planning to create one. A real risk-management culture still needs to be developed amongst private entities. Significant opportunities remain for medium and big organizations to strengthen underlying processes for identifying and assessing the key risks that the entity normally faces
Risk management and firm size: a survey of Italian private companies
No full textThis paper studies enterprise risk management (ERM) systems within private
firms, and examines how firm size influences risk settlement decisions inside
micro, small, medium and large unlisted corporations. This paper contributes to the
literature with an empirical analysis of whether private firms consider it worth
managing risk using formalized organization and procedures, even if this is not
imposed by any mandatory rule or by self-regulation. Submitting a questionnaire to
a sample of Italian unlisted companies, it is found that 67% of respondents have no
risk management department and only 10% are planning to create one. It seems
that formalized risk-management systems amongst private entities are not
widespread. It is likely that significant opportunities remain, especially for medium
and big organizations, to strengthen underlying processes for identifying and
assessing the key risks that the entity normally faces
Financial reputation repair through environmental performance
No full textPurpose – This paper aims to examine whether firms in polluting industries improve their environmental
performance to effectively repair their financial reputation in the aftermath of an accounting restatement – a
financial reputation-damaging event.
Design/methodology/approach – The authors test their hypotheses using multiple regression analysis
of a sample of firms listed in International Financial Reporting Standards (IFRS)-adopting countries. They use
a comparative empirical design in which a sample of firms that underwent a restatement (henceforth,
restating firms) are compared with control groups of pair- and multiple-matched firms that did not undergo
restatements (non-restating firms).
Findings – The study finds that restating firms have higher environmental performance in the aftermath of
restatement events. Additionally, the authors demonstrate that this environmentally based reputation repair
positively influences the financial reputation of the firms, as measured by analyst coverage and
recommendations and which previously decreased because of the restatement event.
Practical implications – Because environmental levers are a substantial contextual factor in
polluting industries, shifting the stakeholder debate to firms’ environmental commitment can improve
financial stakeholders’ opinions and favour the repair of the multifaceted reputation of the financially
damaged firm.
Social implications – With a worldwide growing attention to environment there is a critical need for
understanding how polluting firms integrate sustainability and financial reputation. We demostrate that
polluting firms recover from a financial failure pursuing their environmental performance.
Originality/value – Contributing to the behavioural theory of reputation repair and in line with the
legitimacy perspective in environmental disclosure research, this paper shows that polluting firms recover
from a loss to their financial reputation by diverting stakeholders’ attention towards the environmental field,
thus restoring their financial reputation, as financial analysts value environmental performance
improvement – a substantial contextual factor of polluting firms’ reputation repair process
Sociological Structures and Accounting Misbehavior: An Institutional Anomie Theory Explanation of Restatements in Family Firms
No full textThis article studies the underinvestigated but fascinating issue of the sociological determinants of accounting misbehavior while focusing on an allegedly illicit accounting practice (i.e., restatement) in family- vs. nonfamily-controlled corporations. Under the framework of institutional anomie theory, we examined whether sociological structures (i.e., legal forces and cultural values) influence accounting errors inducing restatements. By applying a multivariate regression analysis to a sample of restating firms listed in 23 countries during the 2006-2014 period, we found that legal forces and cultural values significantly moderate the severity of accounting errors. The results of this study suggest that investors, managers and policymakers should more fully consider the sociological structures of societies when debating the feasibility of corporate misbehaviors, as combining firm-level and country-level analyses could help to predict a firm’s accounting misbehaviors, such as more severe accounting errors
HOW FIRMS RECOVER FROM A LOSS IN REPUTATION CAUSED BY ACCOUNTING RESTATEMENT: A STUDY OF ENVIRONMENTAL PERFORMANCE IN POLLUTING INDUSTRIES
No full textIn this article, we examine whether restating firms operating in environmentally sensible
industries improve environmental performance in the post-restatement period in order to
recover from a loss in reputation. Using a sample of firms listed in 12 IFRS-adopting countries we
find that, after accounting restatement, restating firms engage more in environmental
responsible practices. We also highlight that the increase in environmental performance is not
significantly larger for firms incurred in more severe accounting restatement. In the end, we
investigate whether the improved environmental performance influences analyst coverage. The
results indicate that analyst following only increases for restating firms taking more
environmental responsible activities, suggesting that firms’ efforts to regain their reputation are
valued in the aftermath of restatement event
"Sustainable" reputational repair strategies in restating polluting companies
No full textCorporate reputation is not a static quality, as business misconduct often causes reputational penalties. An accounting restatement, which is a form of business misconduct, results from a violation of the appropriate application of accounting practices and reflects managers' incentive to obtain short-term benefits. While numerous scholars have focused their attention on the adverse implications caused by financial restatement, relatively little research examined how firms might recover from a loss in reputation. Drawing upon the behavioural theory on reputation repair, we formulate and test our hypotheses on strategical responses to reputational damaging restatements in environmentally sensitive industries
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