Corporate Accountability Research Articles

CURRENT AND MODERN PROBLEMS OF CORPORATE ACCOUNTING AND REPORTING ACCORDING TO INTERNATIONAL STANDARDS.

CURRENT AND MODERN PROBLEMS OF CORPORATE ACCOUNTING AND REPORTING ACCORDING TO INTERNATIONAL STANDARDS.

Who really matters in corporate tax?

Internal and external parties meaningfully shape corporate tax outcomes. However, we lack a holistic understanding of the major parties involved and their comparative effects. Using proprietary IRS data for public and private firms, we identify the top executives, corporate accountants, external accounting firms, and individual tax preparers and examine the comparative importance of these parties on corporate tax outcomes. We find that external individual tax preparers matter much more than the accounting firms that employ them. Internal actors (top accountants and executives) explain more of the variation in corporate tax outcomes than external actors (individual tax preparers and accounting firms). We also find some evidence that individuals’ characteristics are associated with the tax behavior of the corporations they serve. Overall, we conclude that some of the actors who are unobservable in public data play a greater role in corporate tax outcomes than parties that are a focus of prior research.

Supply Chain Governance at a Distance

This article examines the role of industry in implementing and interpreting the international legal norm of human rights due diligence. Our study focuses on a multi-industry association called the Responsible Minerals Initiative (RMI), which has assumed a leading role in implementing conflict minerals legislation and interpreting the norm of human rights due diligence in mineral supply chains. Drawing on interviews with RMI staff, corporate representatives, and independent members of the RMI’s governance committees, we analyze the RMI’s risk assessment tools that facilitate corporate compliance with global mineral supply chain regulations. We demonstrate that these technocratic tools mask the underlying corporate interests that control how human rights due diligence is being interpreted and implemented on the ground. We then argue that global supply chains are being “governed at a distance” through these technical practices whereby companies divest themselves of responsibility to their suppliers. Supply chain governance at a distance is therefore transforming the norm of human rights due diligence from an instrument of corporate accountability to a tool of corporate legitimacy.

The effects of female executives on financial statement comparability

AbstractThis study uses data from China to investigate the impact of female executives' proportion on a firm's financial statement comparability. We find that having female executives can improve a firm's financial statement comparability, particularly in the presence of a key female executive. Furthermore, we find that female executives improve firms' corporate governance and internal control quality, which in turn enhances financial statement comparability. Importantly, this impact exists only in large firms, non‐state‐owned firms, and firms domiciled in mature markets. Overall, our study reveals this mechanism and examines the conditions under which gender‐specific characteristics can affect corporate accounting quality.

Model Manajemen Usaha dan Hubungannya dengan Kinerja UKM (Studi Kasus pada UKM Sembung Batik Kulonprogo Jogyakarta)

Indonesian SMEs play an important role in employment and contribution to GDP. However, complex issues still hamper the progress and rise of SMEs. This research aims to explore the causes of these problems by focusing on management models in SMEs. The study uses qualitative methods through interviews, observations, and documentation. The research subject was UKM "Sembung Batik" in Kronprogo, Yogyakarta. We manufacture batik fabrics with letters and prints and develop fashion products with batik motifs. It is hoped that the results of this study will explain the relationship between the operating model implemented by Sembung Batik UKM and its operating performance. In this way, new management solutions and models can be developed that are more effective and efficient for improving the performance of small businesses. This study uses SWOT analysis as an indicator of performance evaluation and considers aspects of corporate governance such as manufacturing, marketing, finance, and human resources. The findings show that Sembung Batik UKM has significant development potential with increased assets, turnover and net profit. However, traditional management models with manual financial and production controls are still an obstacle. Low technology utilization in the areas of production, marketing, human resources, and accounting information systems also means that small businesses are not performing optimally. Efforts to increase income are possible through product diversification, hiring a creative workforce, using corporate accounting software, etc.

Determinants and consequences of corporate social responsibility disclosure: A survey of extant literature

AbstractThis paper systematically analyzes and synthesizes the literature on the determinants and consequences of corporate social responsibility (CSR) disclosure. The study is unique in that it synthesizes based on the geographical setting of the original research. We analyzed 135 empirical studies published in Chartered Association of Business Schools (ABS) ranked journals from 1982 to 2020. The results reveal that various global, country‐specific, market‐specific, and firm‐specific factors are important in determining a firm's CSR disclosure policies. These factors are consistently relevant in both developed and developing economies. Furthermore, the synthesis shows that companies achieve various CSR disclosure‐related benefits in the form of a better reputation, enhanced financial performance, better access to external finances, better stakeholder management, and enhanced corporate accountability. In terms of theories, we observe a high heterogeneity among various studies examining the same empirical phenomenon. Based on the analysis and review results, we identify avenues for future research.

Managerial Ability and Accounting-Tax Compliance

Managerial ability comes from capabilities, skills and experiences that reflect on strategic differentials for all organizational levels, being a premise of greater efficiency and accounting and tax knowledge that can bring great benefits to the results of organizations. In this context, this study seeks to verify the influence of managerial skill on the accounting and tax compliance of publicly traded companies at a global level. This research is characterized as descriptive, with a quantitative approach, carried out through documents collection and the data were treated by multiple linear regression. The research population comprises public companies from 28 countries, with a sample of 11,506 companies from 2012 to 2019. In general, the results showed that managerial skill positively influences the level of accounting-tax compliance of companies. When comparing the results between the groups of countries analyzed, it is evident that the country's legal orientation becomes a complementary factor to managerial skill in determining accounting-tax compliance. For example, companies with more skilled managers located in common law countries have greater accounting-tax noncompliance, on the other hand, companies with greater managerial skills from civil law and Muslim countries have greater accounting and tax compliance. The study reinforces the premise that companies from common law countries and with greater managerial skills are concerned with providing higher quality accounting information to external users, placing less emphasis on the use of corporate accounting for tax purposes.

Corporate governance and management accounting to reduce agency conflicts

This paper aims to discover priority alternatives involved in decisional-making processes to reduce agency problems considering Corporate Governance (CG) and Management Accounting (MA) criteria. Using the Multi-Criteria Decision-Making (MCDM) methodology, it is possible to model the hierarchy structure to determine the ranking of decisional priorities using the Analytic Hierarchy Process (AHP) method. CG and MA are the main criteria for decision-making to reduce problems between ownership and capital control. Thus, engaging agents is the first alternative to reduce agency conflicts considering a general approach. Strategic accountability should be a priority to reduce agency problems focusing on CG and confidence is the main variable to consider from the MA standpoint. The research provides a multiple criteria system to reduce agency problems in decision-making. This work contributes to information asymmetry’s minimization and has implications on value preservation and creation for stakeholders. The decisional structure and the alternatives related to CG and MA have direct practical applications for managers and actors involved in business decisions to reduce agency conflicts. This paper provides evidence on the importance of CG and MA variables to reduce information asymmetry and agency problems and sets out the main priorities in a context of decision making for managers.

Theoretical Aspectrs of Integrating Non-Finance Information in Corporate Accounting

Today it is very important to maintain confidence of concerned parties at all levels, as the lower confidence, the higher stimulus is to change the partner or producer. Since the late 20th century non-finance accounting became more and more significant due to internationalization, digitalization and growing role of intangible assets in company capitalization. Non-finance accounting includes ecologic, social and managerial information. Sustainable development and non-finance information have become the key problem among business leaders, investors and regulation bodies. Participants of capital market pay higher attention to the importance of non-finance information. Investors, regulation bodies and banks strive for higher standardization to provide accountability and to enter nonfinance factors in ratings and normative acts. Intensifying global attention to issues of climate change, diversity and inclusivity, as well as COVID-19 crisis accelerated this process. The article studies possible reasons, why companies provide voluntary non-finance information, in spite of potential costs and strategic after-effects. The problem is very important as serious efforts are taken to identify and generalize various theories, which specify corporate accountability making by companies. The author analyzed theories of revealing non-finance information in company reports.

Good Corporate Governance and Accounting Performance Affecting the Profit Quality of Companies Listed on the Stock Exchange of Thailand during the COVID-19 Pandemic

The objective of this research is to study the good corporate governance and accounting performance affecting profit quality of companies listed on the Stock Exchange of Thailand during the COVID-19 pandemic. The research methodology is multiple regression analysis used in the data analysis and the test of accounting performance used as an intermediate variable according to the concept of [16]. The sample group consists of companies listed on the Stock Exchange of Thailand from 2018-2021. The data used in the study was a total of 2,604 data. The research results revealed that from the mediator variables before COVID-19 (2018-2019) totalling 2 years, the good corporate governance scores have an influence on profit quality. The rate of return on equity is some intermediate variable. It shows that a good corporate governance score has an influence on accounting performance as measured by the return on equity ratio of the shareholders and profit quality. However, the results of the test on the intermediate variable after COVID-19 (2020-2021) did not meet the test criteria for good corporate governance influencing profit quality at the statistical significance level of 0.05.

The Mediating Effect of Corporate Social Responsibility and Corporate Accountability in the Relationship between Corporate Governance and Value-Based Financial Performance of Banks

The Mediating Effect of Corporate Social Responsibility and Corporate Accountability in the Relationship between Corporate Governance and Value-Based Financial Performance of Banks

Moderating role of risk management effectiveness on corporate social responsibility- corporate performance relationship

This study is designed to provide empirical evidences on the conditional influence corporate social responsibility (CSR) on corporate accounting and market performance. This study considers risk management (RM) as a conditional or moderating variable. Accounting performance was proxied by return on assets (ROA), earnings per share (EPS), and net profit margin (NPM), while market performance was proxied by Tobin-Q and stock price. Furthermore, those proxies form corporate performance variable based on factor analysis. CSR measured using the Global Reporting Initiative (GRI G4) Index. Meanwhile, RM was measured using total risk management proxy. By applying purposive sampling method, 253 non-financial companies were selected as a sample of this study. The Structural Equation Modeling (SEM) with the WarpPLS approach was used for data analysis. This study found that the corporate social responsibility has a positive effect on corporate performance, and the relationship between corporate social responsibility and corporate performance will be stronger if corporate risk management is applied optimally. The findings of this study imply that the good corporate performance will be achieved since a company discloses more CSR information and runs effective risk management as well.

Greed and Grievance: Corporations, States and International Investment Law in Times of Conflict

Abstract For those on the ground, conflict brings about devastation and displacement. For foreign investors who frequently seek commercial opportunities far and wide, conflict is not just a fellow traveller but also a crucial element of the environment in which international investment law was conceived and later took shape. This review essay seeks to uncover some of the fundamental and overarching themes underpinning the relationships between foreign corporations, states and local communities in times of conflict. By focusing on the distinct roles played by the corporation in situations of conflict – as a victim, contributor, beneficiary, perpetrator and accomplice – the essay aims to cast light on international law’s troublesome origins, biases and complicities and to highlight a growing concern over the enduring lack of effective avenues for corporate accountability.

The dissipation of corporate accountability: Deaths of the elderly in for-profit care homes during the coronavirus pandemic

The COVID-19 pandemic has raised serious questions about corporate accountability, exposing how poorly our systems of corporate accountability function under pressure. This paper examines one industry and jurisdiction where this problem is particularly visible, for-profit care homes for the elderly in Ontario, Canada (where the industry is called “long-term care” [LTC]). LTC companies continued to pay bonuses to executives and dividends to investors while COVID-related deaths mounted in their facilities. What does this tell us about how society holds companies accountable for their actions? This paper focuses on two highly institutionalized systems of accountability in the LTC industry in Ontario, namely healthcare governance and financial governance. We examine these two systems in the context of public pressure for regulatory action, pressure that has manifested in mainstream media coverage, social media outrage, and the threat of civil lawsuits. We compare the efficacy of healthcare and financial governance in this industry using a theoretical framework drawn from accountability literature, and explore the possibility of legal consequences for LTC corporations under corporate criminal law. We show how these systems together serve to dissipate corporate accountability through a fragmented, inadequate system of conflicting governance mechanisms, despite making a show of accountability rituals. We argue that these systems work together to divide the moral community in which corporations exist and where meaningful accountability might be possible, facilitating the misrecognition of the “corporate imaginary” as an accountable entity.

The emerging corporate turn in transitional justice

This essay reviews recent developments in transitional justice (TJ) scholarship that represent an emerging corporate turn in TJ. TJ has traditionally focused primarily on states and state-like actors, a movement that has gone hand in hand with the increasing standardization of TJ as a field of practice. Highlighting some of the limits to this model of TJ, scholars have since early 2000s been calling for the need to include economic actors in the TJ system. These four books that have all been published between 2020 and 2022 reflect a new momentum for this movement within TJ scholarship. They all highlight, in different ways, how complimentary innovative mechanisms and creative legal combinations have led and can lead to holding economic actors accountable for past abuse. Corporate accountability has been a blind spot in the increasingly standardized approach to TJ, but this emerging corporate turn represents a possibility to innovating the TJ standard to include “new” actors as subjects of accountability. All books, however, also show that this is far from a straightforward process as it involves transforming the deeply engrained and rigid international law and human rights system, which have usually protected economic elites and focused on states.

The Self-Esteem, Moral Courage, and Whistleblowing: Case of Corporate Accounting Staff in Indonesia

Research purposes: This research aims to examine the relationship between self-esteem, moral courage, and internal whistleblowing intentions. The primary research framework uses prosocial theory to build logic to develop hypotheses.Methods: This research was designed as a survey method on the corporate accounting staff in Indonesia. Data collection by convenience sampling method with google Forms online. A sample of 184 respondents was tested by the maximum likelihood Structural Equation Model (SEM) with an asymptotic covariance matrix. This method was used because the multivariate data were non-normally distributed.Findings: The proven that moral courage encourages internal whistleblowing. Meanwhile, self-esteem doesn’t motivate employee intention to internal whistleblowing. Self-esteem is established as a determinant of moral courage. This evidence shows that moral courage is meditating.Novelty: Theoretically, this study contributes that self-esteem is an intrapersonal variable that can encourage employee intention of the internal whistleblower. In contrast to previous studies that examined professional accountants, internal audits, external audits, and employees, this study was conducted on corporate accounting staff.

Corruption disclosure practices of Islamic and conventional financial firms in Bangladesh: the moderating role of Big4

PurposeCorporate corruption reporting (CCR) is an emerging issue of the corporation for measuring transparency, integrity and accountability to the stakeholders and society. The purpose of this paper is to examine the role of CCR and financial management responsibility regarding the issue of corruption control.Design/methodology/approachTo explore the influences of corruption disclosure, this study considers the keywords-based content analysis of the listed financial firms of the Dhaka Stock Exchange in Bangladesh for 2012–2016. The research considers stakeholders and theoretical legitimacy lens for discussing corporate corruption disclosure. This study identified 143 self-driven keywords by classifying, analyzing and selecting the appropriate large set of keywords from the prior literature. This study examines 247 firm-year observations of all financial firms in Bangladesh using secondary data sources.FindingsThe results of the hierarchical regression analysis report that financial firms following Sharia principles have a negative and significant association with CCR, while Big4 has a positive and significant influence. Moreover, the interaction effect of Big4 on the relationship between Sharia principles and CCR is negative and insignificant. The findings reported that Islamic financial firms disclose less corruption information than conventional financial firms in Bangladesh.Practical implicationsThis study findings are expected to significantly impact corporate management and policymakers of developing and highly corrupted economies to enhance corporate accountability, transparency and reputation. The regulatory body can consider the findings to promulgate anti-corruption reporting rules and regulations.Originality/valueThe authors believe the theoretical lens used to support the method and findings of this paper are unique and novel.

Accountabilities in the NHS

Abstract This article is based on ethnographic fieldwork carried out with managers, politicians and political activists in the English public healthcare system. Rather than a dominance of financial accountability, I found a mish-mash of accountabilities, in which the duty to ‘balance the books’ was a key driver but one that relied on other forms of coercion. Campaigners mobilised the concept of political accountability against cuts and privatisation. While bureaucrats were often sympathetic to activists’ point of view, they felt constrained by ‘the reality’ of limited funds. Their conceptualisations of what was possible were enclosed. Debate regarding those limits was foreclosed. I sketch these limits on bureaucrats’ ethical imagination, theorising them as ideological closure. But at times, managers did imagine alternative possibilities. Mostly, they kept quiet regarding alternatives due to a fear of losing their jobs. Thus, corporate accountability – to one's employer – enforced service retrenchment in the name of financial accountability.

Unpacking Corporate Due Diligence in Transnational Climate Litigation: A Planetary Perspective

Straddling national and transnational law, corporate due diligence presents a legal quandary. How should business entities address climate change matters? Due diligence generally implies the duty to assess and disclose potential risks and uncertainties in addition to the duty to prevent and manage risks and uncertainties based upon global standards of expected conduct. In this context, has a duty of climate due diligence emerged to protect both society and shareholders? Further, what legal sources are currently shaping climate due diligence? This article explores the implications of due diligence derived from transnational climate change litigation against business entities. The research field is still nascent — with only one decision clearly addressing the benchmark against which business entities shall conduct climate due diligence. In this landmark case, Milieudefensie v Shell (2021), the District Court of The Hague mandated climate due diligence obligations upon Royal Dutch Shell, as aligned with Dutch tort law, international law, the European Convention on Human Rights case law, and transnational soft law instruments, notably the United Nations’ Guiding Principles on Business and Human Rights (UNGPs) and the reports of the Intergovernmental Panel on Climate Change (IPCC). Focusing on the underexplored topic of due diligence in transnational law, this article sheds light on the ground-breaking, albeit methodologically problematic, treatment of legal sources in the due diligence benchmark elucidated in Milieudefensie v Shell. Moreover, the paper explores how the planetary boundaries theory can provide courts with a toolbox to operationalise IPCC reports and the UNGPs and anchor them in the doctrine of legal sources for corporate accountability over climate issues. Because no general principle of due diligence exists, transnational climate litigation proves key to articulating science-based business duties in mandatory due diligence over climate matters. Focusing on the underexplored topic of due diligence in transnational law, this article sheds light on the ground-breaking, albeit methodologically problematic, treatment of legal sources in the due diligence benchmark elucidated in Milieudefensie v Shell. Moreover, the paper explores how the planetary boundaries theory can provide courts with a toolbox to operationalise IPCC reports and the UNGPs and anchor them in the doctrine of legal sources for corporate accountability over climate issues. Because no general principle of due diligence exists, transnational climate litigation proves key to articulating sciencebased business duties in mandatory due diligence over climate matters.

Litigating Corporate Human Rights Information

This article analyzes trends in litigation brought against corporate actors regarding human rights information. Such information includes, but is not limited to, statements on packaging claiming that products are “ethically sourced” and investor‐facing disclosures representing that an issuer's operations are environmentally friendly. It proceeds by outlining the sources of human rights‐related disclosures as they arise under both legal and voluntary regimes. The article then addresses the case law. Recent years have seen an increase in lawsuits involving human rights information, or lack thereof, imparted by companies. Consumer protection or consumer fraud cases are being filed, alleging that companies have either provided false and misleading information or omitted information about corporate human rights impacts and mitigation efforts. Investors are filing similar claims. The article examines the trend and considers the role of this litigation both in holding companies to their word and in providing corporate accountability for the underlying human rights abuses that false or misleading human rights information may mask. It ultimately argues that, although success at trial in such cases remains elusive, litigation is a useful and potentially growing tool for holding companies to their word regarding human rights claims. It contextualizes this litigation, arguing that other means by which companies can be held to their word should be strengthened, including public enforcement and—potentially—new disclosure and due diligence laws.