Peer MD&A risk information disclosure and corporate audit demand

HRMARS - This paper takes A-share listed companies in China from 2013 to 2022 as the research sample and positivism analyzes the impact of financial leverage on the level of risk information disclosure of listed companies. Through text analysis, the risk information disclosure indicators in the annual reports of listed companies are constructed, and a multiple linear regression model is established. The research finds that the higher the financial leverage ratio of a company, the higher the level of risk information disclosure, indicating that highly indebted companies have the motivation to increase risk information disclosure to alleviate information asymmetry with creditors. Further analysis shows that this positive relationship is more significant in non-state-owned companies. This study provides new positivist evidence for understanding the interaction between corporate debt financing and information disclosure, and is of great significance for regulatory authorities to improve the information disclosure system and for investors to identify corporate risks. Purpose: The research objective of this paper is to analyse the relationship between financial leverage and risk disclosure of listed companies. It explores whether management chooses to disclose more risks or conceal risks when financial leverage rises. Thus, it aims to analyse the motives of risk disclosure of listed companies and the influence mechanism of financial leverage on risk disclosure, and then put forward suggestions for regulatory authorities to improve the risk disclosure system. Design/methodology/approach: This paper adopts a quantitative research design, selecting A-share listed companies in China from 2013 to 2022 as samples. The dependent variable is the level of risk information disclosure, measured by the proportion of risk-related keywords in the annual report to the total number of words. The core independent variable is financial leverage, measured by the debt-to-asset ratio. Control variables include profitability, revenue growth rate, company size, and the shareholding ratio of the largest shareholder. The positivist part mainly uses a fixed effects regression model to reduce the impact of individual differences. Robustness tests are conducted through alternative variables, introducing lagged terms, and other methods. This research design can systematically examine the impact of financial leverage on corporate risk information disclosure. Findings: Research has found that among listed companies in China, Companies with higher risk asset holdings have higher disclosure levels, suggesting that highly indebted companies increase risk disclosure to mitigate information asymmetry with creditors. Further research has found that this positive relationship is even more significant among non-state-owned companies. It means that non-state-owned companies are more willing to proactively disclose risk information when their financial leverage is high. Research limitations/implications: This paper only considered the quantity aspect of risk disclosure, but has not taken into account the quality aspect of risk disclosure. Future research could explore risk disclosure and its economic consequences from aspects such as the tone of the text. Practical implications: The research results of this paper can provide a reference for creditors to assess corporate credit risk and investors to make investment decisions. And it can provide a reference for regulatory authorities to formulate differentiated and refined information disclosure regulatory policies. Originality/value: This paper enriches and expands the research on information disclosure based on agency theory and signalling theory, and links financial leverage with risk information disclosure. This study effectively integrates property rights theory, corporate governance theory and information disclosure.

The essence of any bank is that it is a risktaking enterprise and therefore, as a part of good corporate governance, it is expected that relevant risk-related information will be released to the marketplace. Currently, however, it is suggested that there is insufficient disclosure of risk information by banks and as a consequence Pillar 3 of Basel II lays out a comprehensive framework for risk disclosures with the intention that this will enable stakeholders to assess the risk pro.le of a bank. In addition, one outcome of the UK company law review is that there will be a requirement for all quoted companies to discuss risks and uncertainties within the annual report. This paper analyses these risk disclosure requirements while also reviewing current bank disclosure practices within the context of this risk disclosure debate. The important issues of disclosure of forward-looking risk information, location of disclosure and proprietary risk information are also discussed together with their implications for the proposed disclosure requirements.

PurposeThis study aims to explore the linkages between sustainable development and sustainability reporting by approaching the UN’s 2030 Agenda in connection with the Integrated Reporting (IR) and Global Reporting Initiative (GRI) frameworks. It aims to outline a theoretical model able to support the achievement of sustainable development goals (SDGs) through appropriate reporting.Design/methodology/approachThe research methodology follows a qualitative approach, combining content and benchmarking analyses of the official documents in question. It aims to provide a better understanding of the conceptual matches between the “5 Ps” of sustainable development and the two sustainability reporting frameworks (IR and GRI) by breaking them down into components and overlapping their constituents to highlight the connections.FindingsThe results reveal that both sustainability reporting frameworks provide prerequisites to ensure SDGs achievement due to the embedded sustainability issues. As there are more matches between SDGs and the capitals implied in the pursuit of value creation, IR better fits to become part of the sustainable development strategy as a valuable option for reporting on SDGs.Practical implicationsThe study addresses academia through a better understanding of the connections between SDGs and sustainability reporting. It might help regulators to improve their latest efforts to enhance transparency and comparability through the enactment of Directive 2014/95, as long as it has not imposed a standardised report yet. It could guide practitioners to face future challenges and support their steps towards standardised reporting practices.Originality/valueThis paper approaches the newsworthy topic of sustainable development, outlining a conceptual model meant to support the SDGs achievement through appropriate standardised reporting. It might also fill the gap of the Directive 2014/95 on non-financial information disclosure as it identifies the most suitable type of reporting to enhance the harmonisation at the European level.

This paper aims to assess the impact of smart innovation on implementing the UN sustainable development goals (SDGs) in the national agri-food system, as stated in the UN concept paper “2030 Agenda for Sustainable Development.” Within the methodological framework based on the principles of sustainability, taking into account the author’s approach to the essence and content of the organizational and economic mechanism of achieving the SDGs in the studied industry, the paper identifies the problems and prospects of implementing smart innovation that affect the transformation of the national agri-food system and determine the priorities of economic practice. The authors prove the thesis that new technology and breakthrough innovation are of priority importance for implementing the UN SDGs in the Russian agri-food system, providing access to international agri-food markets. The author’s approach to the idea of wide implementation of smart innovation in the achievement of the SDGs in the national agri-food system (AFS) is based on the idea that justified and technologically realized complex progressive innovation on a digital platform will allow creating conditions for implementing sustainable socio-ecological and economic development of the studied industry. Nevertheless, in the theoretical and methodological aspect, the achievement of the UN SDGs in the Russian AFS based on smart technology is not fully studied which led to the choice of the topic and the goal of this research. The authors conclude that global trends in the sustainable development of the national AFS, which are largely relevant to Russia, indicate the growing importance of the formation and implementation of an organizational and economic mechanism to achieve the UN SDGs in the AFS, taking into account the innovation factor. The correlation between innovation and progress toward achieving the UN SDGs is shown to be uncontroversial. It is defined in SDG 9 “industry, innovation, and infrastructure:” “Build resilient infrastructure and promote inclusive and sustainable industrialization and innovation.” The research novelty lies in the fact that the impact of smart innovation on achieving sustainable growth of the Russian AFS in the context of the UN SDGs has been comprehensively investigated for the first time. The authors prove that advanced technology, sustainable solutions, and breakthrough innovation are crucial for achieving the UN SDGs in the Russian AFS. Moreover, they indicate that the Russian AFS with the introduction of smart technology is the main condition for improving the competitiveness of the industry and ensuring the country’s entry into international agricultural markets.KeywordsSustainable development goalsAgri-food systemOrganizational and economic mechanismSmart innovationTechnologyDigitalizationJEL codesQ01Q10Q56013031032P18

The convergence of reporting information on quality costs and reporting on sustainable development of machine-building enterprises, the study of theories and terminology of corporate social responsibility and the role of quality costs in its context as well as reporting standards in the field of sustainable development regarding disclosure of non-financial information. Methodology. Analysis of the theoretical foundations and terminology of corporate social responsibility and the role of quality costs in its section, reporting standards in the field of sustainable development regarding the disclosure of non-financial information, the convergence of reporting information on quality costs and reporting using the methods of theoretical generalization, grouping and comparison. The convergence of quality cost reporting and sustainability reporting is based on synthesis and system analysis methodology. Results. The development of theories and terminology of corporate social responsibility and the role of quality costs in its context was summarized. The principles of ensuring sustainability, which include a comprehensive approach to the assessment of management decisions in managing the enterprise and the effective use of all material and non-material resources of the enterprise, were considered. Forecasting a decrease in integral indicators of enterprise sustainability has a direct impact on the number of quality costs. It was established that the traditional financial reporting of enterprises does not disclose all data on quality costs. A comparative characterization of the standards of sustainable development reports regarding the disclosure of non-financial information was carried out. An attempt to converge quality cost reporting and sustainability reporting using internationally recognized sustainability reporting has been made. The conditions for improving analytical support for quality cost management have been determined. The problems of displaying data on quality costs, mainly due to incomplete disclosure of information in the financial statements of enterprises, were identified. The possibilities of expanding reporting information on quality costs in the existing practice of sustainable development reporting were outlined. Scientific novelty. It is proposed to shift from financial accounting to sustainability accounting by adjusting the main reports, which should include profits and losses, to show how quality-related costs and revenues can directly affect the financial performance of the enterprise. Practical significance. The results of this study contain practical recommendations regarding the convergence of reporting information on quality costs and existing reporting on sustainable development in the implementation of economic activities of machine-building enterprises.

Water stress is a major challenge present in drylands and it generally leads to an uneven progress in social, economic, and natural systems. However, its impact on the achievement of sustainable development goals (SDGs) in drylands remains unclear. By establishing a comprehensive assessment system incorporating SDGs progress evenness, this study has assessed water stress and its impact on sustainable development in Inner Mongolia, a typical and representative area of Eurasian drylands. Our results suggest that although Inner Mongolia has experienced rapid progress towards its SDGs, disregarding the evenness of SDGs progress overestimates the current situation and ignores regional gaps. Many poorly performing SDGs have made little progress over the past few decades, thus intensifying uneven progress goals. Further analyses have examined how water resources are associated with these problems. Moreover, multiple SDGs related to human essential needs and environmental conservation, including SDG 1 (no poverty), SDG 2 (zero hunger), SDG 3 (good health and well-being), SDG 7 (affordable and clean energy), and SDG 12 (responsible consumption and production), were significantly positively correlated with ecological water consumption, whereas SDGs related to economic growth, such as SDG 8 (decent work and economic growth), were positively correlated with industrial water consumption. These findings suggest that a conflict in water allocation for the achievement of different SDGs accounts for the uneven progress across the SDGs and therefore this impedes the sustainable development of these drylands. Therefore, we argue that industrial upgrading, regional planning, and management policies should be integrated into a single unified framework from an SDGs perspective to relieve water stress, thus promoting sustainable development in drylands.

Evaluation of non-financial information and its contribution to advancing the sustainable development goals within the Spanish banking sector

Purpose – The goal of the research was to test a general assumption about culture contribution to sustainable development via the relationship between culture-related indices and the achievement of specific sustainable development goals. Research methodology – Linear regression analysis along with robustness testing was used to test research hypotheses. The data set is represented by 19 explanatory variables and 2 dependent variables, which are proxies for sustainable developments goals Decent Work and Economic Growth and Industry, Innovation and Infrastructure – Innovation index and Global competitiveness index. The data were collected from 27 European countries for the period 2011–2020. Findings – Statistical analysis revealed relationship between sustainable development indices and culture development of European countries. Decent Work and Economic Growth demonstrated more significant relationship to cultural development than the Industry, Innovation and Infrastructure Development. Research limitations – The findings are limited by the fact that some variables were missing. Practical implications – The outcomes of the research allow to define the structure of relationship between sustainable development goals and cultural development indicators. Originality/Value – The research results have indicated that the achievement of sustainable development goals Decent Work and Economic Growth and Industry, Innovation and Infrastructure Development are affected by the level of cultural development.

Currently, one of the most pressing issues being discussed in many jurisdictions, including the Russian Federation, as well as international organizations, with the participation of the Russian Federation, is the issue of sustainable economic development. Over the years that have passed since the establishment of the UN Sustainable Development Goals, projects implemented in this direction and having the relevant title have revealed such problems as transparency of investment, targeted spending and, ultimately, green laundering. All the above-mentioned problems have become the subject of close attention of scientists and legislators all over the world, as regardless of the level of economic development and the volume of capital investments, all face the same risks and problems. Obviously, the priority approach should be the approach developed by the practice of international organizations, but we should not overlook some steps that may be useful for legal regulation at the national level. This article provides a legal analysis of the existing regulation in different jurisdictions in order to show, firstly, the already existing harmonized rules at the international level, and secondly, to outline other possible directions of development. First of all, we are talking about such a mechanism of regulation (control) as disclosure of non-financial information.

The implementation of the smart city concept and the smart transport system included in it can have a significant impact on the sustainable development of both individual cities and the entire country through achieving the UN Sustainable Development Goals (SDGs). Despite the fact that there are many studies devoted to the topic of smart transport development, the relationship, e ects and degree of influence of the smart transport system on sustainable development and the achievement of the SDGs have been practically unstudied. This study aims to prove, through a theoretical review of scientific papers and implemented transport projects, that smart transport, through its subsystems and functional elements, can have a direct or indirect impact on the achievement of some UN SDGs and the corresponding indicators. The work considers the key components of intelligent transport systems and studies their impact on the environmental, social and economic aspects of the urban environment. Based on the analyzed scientific papers and implemented transport projects, the authors presented diagrams reflecting the principle of the influence of the smart transport system, its subsystems and functional elements on the achievement of some SDGs and the corresponding indicators in the context of the implementation of the smart city concept. The study contributes to the detailed systemic understanding of the importance and potential of smart transport in solving the problems of sustainable development of cities and urban agglomerations, promoting a better understanding of the foundations of sustainable development in the context of the readiness of authorities to implement the smart city concept.

Land is the key asset in the agricultural sector and hence land policy is one of the key elements that determine whether SDGs are achieved in developing counties or not. In developing countries, land titling programs have been seen as a strategy for addressing SDGs. Even though the government of Ethiopia launched the rural land registration and certification program (LRCP) to secure the land rights of rural households in 1998, currently, there are limited empirical studies to examine the contribution of LRCP in addressing sustainable development goals (SDGs). This study is employed to fill this knowledge gap by assessing how LRCP supports the achievement of the UN SDGs. The research data were collected through key informant interviews, in-depth interviews, focus group discussions, and reviewing published and unpublished documents. Content analysis, narrative analysis, and SWOT analysis were applied to examine the research data. The study confirms that LRCP improves tenure security, which greatly contributes to the achievements of SDGs, such as SDG 1 (end poverty), SDG 2 (end hunger), SDG 5 (gender equality), and SDG 15 (life on land). The tenure security of rural societies is a key pathway for the achievement of SDGs in Ethiopia since their livelihood mainly depends on agriculture. Therefore, developing countries should focus on land rights to improve the livelihoods of rural societies in particular and to enable sustainable development in general.

Research Question- To what extent does the disclosure of non-financial information by companies listed on BSE after the adoption of the EU directive lead to a decrease in the use of earnings manipulation techniques? Motivation- In line with the Sustainable Development Goals (SDGs) developed by the United Nations (UN) in 2015, as well as the worldwide spreading requirements related to the disclosure of non-financial information, the influence of sustainability and non-financial reporting on firms' engagement in earnings management practices is investigated through a pre-post adoption of European Directive 2014/95/EU comparative analysis for firms listed on the Bucharest Stock Exchange (BSE) in the period 2015-2019. Idea- The study aims to analyse the influence of sustainability and non-financial reporting on companies' engagement in earnings management practices. Data and tools- To conduct the investigation, the research involves the assessment and analysis of three earnings management metrics resulted by running multiple linear regression models on a sample of 31 companies listed on BSE. Findings- Research findings emphasise a decrease in the use of income smoothing practices by sampled companies in the post-adoption period 2017-2019, compared to the period preceding the implementation of the EU directive related to mandatory disclosure of non-financial information, 2015-2016. Thus, firms characterised by a higher transparency in terms of sustainability reporting are less inclined to engage in earnings management practices. Contribution- This research complements the literature in the field of sustainability reporting and earnings management, providing empirical evidence on the significance and impact of publishing non-financial information, the results being noteworthy for both investors and standard setters.

The concept of sustainable development is an important management guideline at the level of individual organizations (3P concept), corporate governance (ESG agenda), regions and countries (resilience to shocks and achievement of sustainable development goals). The weakness of sustainable development rat-ings is their static nature, insufficient predictive potential, and limited opportunities for making management decisions. Sustainable development management in the digital environment determines the need to develop special assessment and diagnostic methods that allow both analyzing the achieved quantitative results in the economic, social, and environmental spheres of the region, and studying the determining factors and reasons. Under present-day conditions, the main factors are digital tools as determinants of achieving sustainable de-velopment goals. The goal of the study is to assess the use of digital tools in development projects, programs, and strategies of the constituent entities of the Russian Federation and to identify the industry and regional features of the digital support of sustainable development in the constituent entities of the Russian Federation. The hypothesis of the study is that the constituent entities of the Russian Federation are strongly differentiated by the level of using digital tools in the implementation of regional development strategies, programs, and projects in the economic, social, environmental, and management spheres related to their industry specializa-tion, which determine the achievement of qualitative and quantitative sustainable development goals. Research methods include content analysis, distance method, and structural analysis. The statistical base consisted of data from the regional strategies for the digital transformation of the constituent entities of the Russian Federation, as well as the Atlas of Economic Specialization of Regions of Russia. The study resulted in the systematization of approaches to understanding the sustainable development of regions, reviewed offi-cial ratings and methods for assessing the sustainable development of countries and regions, developed and tested a methodological approach to regional rating that takes into account the processes of achieving results – the use of digital technologies in development projects and programs. The study revealed that the industry specialization of regions has varying degrees of influence on the digital support of sustainable development. Medium-specialized regions are characterized by the maximum differentiation in digital support. The ob-tained results can be useful to federal authorities in elaborating methodological guidelines for the selection and recommendation of regional development projects, as well as to regional authorities in developing and implementing sustainable development strategies and digital transformation strategies.

The rapid expansion of information and knowledge of genetics has implications for the question of whether, and under what circumstances, information discovered in the course of genetic research should be conveyed to research participants and/or their relatives. The aim of this paper is to propose an ethically defensible solution to a specific case example illustrating this problem. To do this we reviewed the literature to find answers to the following three questions: (1) What do current regulations, guidelines, and commentary say about the disclosure of genetic risk information obtained through research to research participants? (2) What do current regulations, guidelines, and commentary say about the disclosure of genetic risk information obtained through research to the relatives of research subjects? and (3) What do current regulations, guidelines, and commentary say about the disclosure of genetic risk information obtained through research about former research participants who are now deceased? Our conclusion is that current U.S. federal guidelines governing the use of human subjects in research, as well as much of the current literature, do not adequately address the familial dimension inherent in genetic research, are virtually silent on the issue of sharing information of relevance to family members, and do not protect the deceased. It is our belief that this omission needs to be corrected and that explicit guidance on this issue needs to be provided to institutional review boards and researchers alike.

Subject. This article examines the issues of proactive engagement of universities in the implementation of international initiatives in the field of sustainable development, including through the disclosure of indicators on the Sustainable Development Goals (SDGs) achievement in their public reporting based on the ESG approach. Objectives. The article aims to systematize the existing frameworks in the field of preparing reports on sustainable development, as well as analyze the sample data of leading Russian universities on the implementation of the SDGs using the ESG approach. Methods. For the study, I used the methods of content and systems analyses, and information grouping. Results. The theoretical part of the article systematizes the existing regulatory context of sustainable development reporting, taking into account the analysis of the possibility of its use by higher education organizations. The empirical part of the article assesses the quality of reporting on sustainable development (the SDGs achievement) by a number of domestic universities. Conclusions and Relevance. The overwhelming majority of leading Russian universities report on the SDGs achievement, focusing on their guidelines and strategies in favor of sustainable development of the country and regions. The list of ESG indicators systematized in the article, adapted to the specifics of the higher education sector, can be used as a tool for assessing the changes in the results achieved by universities. The results of the study can be of interest to researchers in the field of university management, representatives of the administrative level, analysts and employees of accounting and analytical structural divisions of universities, which form the information base for generating public reports and making management decisions in the field of sustainable development.