Disclosure Quality Research Articles

Implementation of Green Accounting to Support High-Quality SDGs Disclosure and Enhance Stock Prices

Natural resources are the primary raw materials produced by companies within the Mining Sector. Their products are not only needed by the Indonesian community but also by people in other countries. In the context of business expansion, the mining sector requires significant funding. In reality, based on data obtained from the Indonesia Stock Exchange, the stock prices in this sector continue to decline. The fact that many companies disclose Sustainability Development Goals in a non-detailed manner is a cause of the decline in a company's reputation in the eyes of the public. The suboptimal disclosure of Sustainable Development Goals is due to the fact that many companies in the mining sub-sector are neglecting their obligations for reclamation funds, commonly referred to as Green Accounting. The aim of this research is to analyze that relationship. The totalresearch observations are 45 companies and will be tested using path analysis. The research results indicate that the implementation of Green Accounting can enhance the quality of Sustainability Development Goals disclosure, High-quality Sustainability Development Goals disclosure can increase Stock Prices, and the implementation of Green Accounting can boost Stock Prices through high-quality SDGs disclosure.

Top management team stability and ESG greenwashing: Evidence from China

AbstractThis study examines the relationship between top management team stability (STMT) and ESG greenwashing. Using a sample of Chinese listed companies for the period 2009–2022, we find that top management team stability has a negative effect on ESG greenwashing. Mechanism tests provide evidence that top management team stability reduces greenwashing by decreasing agency costs and improving the quality of information disclosure. Additional analysis reveals that this relationship is more pronounced for firms audited by non‐Big Four firms, non‐state‐owned enterprises, and firms with high executive shareholding. The study combines the characteristics of internal human capital with the efficiency of market information, offering a new perspective in the literature on ESG greenwashing.

Evaluating quality reward and other interventions to mitigate US drug shortages

AbstractDrug shortages have been persistent in the United States for over a decade, posing serious threats to public health and the healthcare system. While previous research has investigated the causes and effects of drug shortages, there is a dearth of research exploring potential solutions to mitigate this problem. Using a system dynamics model of the US generic drug market, we evaluate the long‐term effectiveness of two existing policy interventions (expediting drug approvals and nudging manufacturers to ramp up their production) and the “quality reward” initiative that is being actively explored by the FDA and industry. Our results indicate that while the existing interventions can be helpful in addressing shortages, their long‐term effect seems limited. In contrast, quality reward can mitigate drug shortages in a sustainable way. However, a caveat of quality reward is the potential emergence of a monopolistic supply market with negative consequences. We suggest that a carefully designed quality disclosure mechanism can address this issue. To the best of our knowledge, this is the first study to quantitatively and comparatively evaluate the long‐term effectiveness of quality reward and other interventions on drug shortages and provide structural explanations for their performance.

Influence of company secretary characteristics on information disclosure violations: evidence from China

AbstractThis study analyzed data from 1999 to 2015 on Chinese listed companies to examine the impact of the Company Law of the People’s Republic of China (2006) on company secretary characteristics and information violations. A cross-sectional estimation was used to explore the impact of the Company Law (2006) on the status and expertise of Chinese company secretaries and information disclosure violations. Propensity score matching addressed the endogeneity problem caused by sample selection bias. The results showed that the Company Law (2006) significantly enhanced the status and expertise of company secretaries, mitigating information disclosure violations among those with higher status or professional ability. However, the interaction of higher status and professional ability adversely increased information disclosure violations. Improvements in the status and expertise of company secretaries also led to increased internal replacements and reduced external punishment for errant company secretaries. These findings have implications for enhancing the quality of information disclosure and controlling future violations. They are valuable to regulators, boards of directors, and investors.

Decoding the impact of firm‐level ESG performance on financial disclosure quality

AbstractThis study examines the impact of environmental, social, and governance (ESG) performance on financial disclosure quality as measured by disaggregated financial statements (FSDQ), using data from US‐listed companies between 2002 and 2021. We find a positive association between ESG performance and FSDQ quality, suggesting that improved ESG performance is linked to enhanced disclosure quality and accountability and that managerial competence and strong organizational culture accentuate this relationship. Further analysis shows a stronger link between firms with high‐quality accounting practices and good financial reporting readability, whereas complex financial reporting weakens this relationship. Our findings remain valid when alternative measures of key variables are used, and under propensity score analysis, Heckman's two‐stage estimation, and cross‐lagged and entropy balancing techniques, ensuring the analysis is robust and reliable. Overall, our findings provide important new insights into ESG performance, suggesting it fosters enhanced disclosure and accountability to stakeholders.

Does environmental regulation affect corporate environmental awareness? A quasi-natural experiment based on low-carbon city pilot policy

The low-carbon city pilot (LCCP) policy, as an important measure for China to achieve its "dual carbon" goals, has attracted widespread attention regarding its implementation effects. However, no studies have yet focused on the impact of the LCCP policy on corporate environmental awareness. This study, based on data from Chinese A-share listed companies from 2007 to 2020, employs a triple difference model to evaluate the impact of the LCCP policy on corporate environmental awareness, filling the aforementioned gap in the literature. The results indicate that the LCCP policy can significantly enhance corporate environmental awareness, particularly in non-state-owned enterprises, enterprises in the growth stage, and those located in the eastern regions. The LCCP policy will compel corporations to enhance their environmental awareness by increasing the costs of environmental penalty and environmental governance. However, the analysis of economic consequences reveals that although corporate environmental awareness has improved, it has not directly translated into significant economic benefits or substantial environmental benefits. This may be indicative of a scenario where, in the short term, the cost effect of the LCCP policy outweighs the compensation effect. Nevertheless, the improvement in the quality of information disclosure can significantly mitigate these adverse economic consequences. This research not only enriches the academic outcomes related to environmental regulatory policies but also contributes to ensuring the effective achievement of green, low-carbon objective and the sustainable development of the economy and society.

Anxio-depressive disorders, traumatic symptoms, and suicidality among limb amputees: A cross-sectional and prospective study

IntroductionLimb amputation represents an ultimate therapeutic option in certain severe or progressive pathologies. We conducted this study to describe anxio- depressive disorders, traumatic symptoms, and suicidality among limb amputees, as well as factors associated with their occurrence. Materials and MethodsThis was a cross-sectional and prospective descriptive and analytical study conducted over a two-year period from October 2020 to October 2022, at the following departments of the Mohammed VI University Hospital Center in Oujda: Traumatological and Orthopedic Surgery departements A and B, and Peripheral Vascular Surgery departement, involving 122 patients. ResultsThe average age of our patients was 46.42 ± 14.76 years, with a predominance of males (male-to-female ratio of 2.21). Preoperative assessment of patients occurred 6 to 24 hours before amputation. Immediate postoperative evaluation took place on average 2.18 ± 1.53 days after surgery, ranging from 1 to 8 postoperative days. The prevalence of anxio-depressive disorders according to the MINI scale was 77%, comprising Depression (9%), Adjustment Disorder (36.9%), Acute Stress Disorder (20.5%), Post-Traumatic Stress Disorder (6.6%), and Anxiety Disorders (10.7%), with suicide attempts reported in 16.4% of cases. The mean score on the Hamilton Depression Rating Scale for our patients was 10.81 ± 3.27, on the Hamilton Anxiety Rating Scale was 16.33 ± 5.54, and on the Ducher Suicide Risk Scale was 0.82 ± 1.33. ConclusionThe occurrence of postoperative anxio-depressive disorders, traumatic symptoms, and suicidal behavior is associated with the following factors: male sex, personal history of depression, family history of psychiatric disorders, quality of diagnostic disclosure, postoperative sleep disturbances, postoperative panic attacks, psychological support, and socio-professional reintegration.

Research on the effect of fintech on inefficient investment: From the perspective of information effect and resource effect

This paper investigates the impact of fintech on investment efficiency. Based on the data of A-share listed enterprises from 2013 to 2021, the empirical results indicate that: (i) Fintech can significantly reduce underinvestment in enterprises. (ii) Easing financing constraints and enhancing the quality of disclosure serve as potential mechanisms for this effect. (iii) Heterogeneous analysis reveals that the impact of fintech on underinvestment is more pronounced for private enterprises, those disclosing ESG information, and enterprises located in 5 G and big data pilot cities, as well as in regions with higher levels of economic and educational integration. These findings have important implications for corporate managers, investors, and policymakers.

Disclosure and Dynamic Risk Sharing with a Large Shareholder

ABSTRACT We study the effects of disclosure in a dynamic market with imperfect competition. The supply of an asset is determined by a large shareholder with price impact, who trades slowly to diversify away from concentrated ownership. Small investors provide capital and thus risk-bearing capacity to the market. Although it is well known that disclosure impedes risk sharing by shifting risk before future trading opportunities, we show that disclosure, at the same time, can enhance risk sharing by promoting more trades. Resolving this tradeoff, an interior level of disclosure quality maximizes the small investors’ surplus as well as the total surplus, but minimizes the large shareholder’s surplus. Further, efficient disclosure policies feature increasing quality over time. JEL Classifications: D80; E21; G12; L13; M41.

Corporate Violations and Audit Opinions: Warning Effect or Uncovering Effect?

ABSTRACT This paper investigates the impact of corporate violations on audit opinions in China. Using the sample of Chinese listed A-share companies over the period 2004–2020, we find that corporate violations increase the likelihood of modified audit opinions (MAOs). Corporate violations increase MAOs likelihood by increasing agency costs, weakening internal control, improving earnings management, and reducing corporate profitability. The effect is more significant for firms with a lower proportion of female executives, higher risk preference of executives, and lower quality of information disclosure. These results have important policy and managerial implications, illustrating how agency conflicts stemming from corporate violations can influence audit opinions.

Corporate Governance Impact on Integrated Reporting Disclosure Quality: Evidence from Pre- and Post-COVID-19 on Chinese Listed Firms

Corporate Governance Impact on Integrated Reporting Disclosure Quality: Evidence from Pre- and Post-COVID-19 on Chinese Listed Firms

Corporate environmental, social, and governance information disclosure and audit governance in the context of green development

The purpose of this paper is to investigate the relationship between Environmental, Social, and Governance (ESG) disclosure and audit governance. The objective is to assess the impact of auditor team independence, auditor professional quality, and transparency of audit procedures on the quality of information disclosure, and to elucidate the role of these factors in advancing sustainable development. Research methodologies include the optimization of information disclosure text analysis using natural language processing (NLP) and text generation techniques, complemented by empirical analysis. Key findings indicate that the maximum error between NLP and manual annotation in the proportion of positive emotions in information disclosure is 0.03, and 0.06 in audit governance. The Rouge index score surpasses the 0.5 threshold, while the Perplexity value varies across three experiments, though remaining generally low. Deep learning model results reveal that auditor team independence, professional quality, and procedural transparency significantly enhance the quality of information disclosure. These findings offer crucial insights for enterprises, regulators, and investors, affirming the rationality and stability of the model, and providing valuable input for future green development strategies and decision-making processes.

Can investor-firm interactions mitigate ESG rating divergence? Evidence from China

This study empirically examines whether investor-firm interactions significantly influence the ESG rating disagreement among A-share listed companies in China. We use Q&A data between 2015 and 2021 from the Easy Interaction and E-Interaction platforms of the Shenzhen and Shanghai Stock Exchanges (SZSE and SSE). Our results reveal that investor-firm interaction can significantly reduce the ESG rating divergence, and this result remains robust after robustness tests. The mechanism test suggests that interactions related to ESG theme can improve the ESG disclosure quality and increase ESG practices; this leads to reduced information asymmetry, thus easing rating divergence. Further, the effect is more pronounced when listed companies' ESG disclosures are similar to those in their industry, non-centralized enterprises, low corporate governance level, and fewer green investors. From the ESG rating divergence mitigation perspective, this study provides empirical evidence on the economic consequences of emerging capital markets regarding investor-firm interactions.

The phenomenon of China’s carbon accounting policies and practices

Purpose This study aims to explore China’s carbon accounting policies and practices to enhance its carbon accounting and trading practices and achieve carbon neutrality. Design/methodology/approach This study adopts a phenomenological methodology to explore carbon accounting by setting the scope of the phenomenon, establishing research methods, conducting interviews with 30 participants from 14 emitting entities and four accounting firms and establishing methods for data analysis. Five themes were identified using a five-step coding method. Findings The results show no uniformity in the accounting treatment of carbon trading; however, common characteristics exist, and they have generally adopted simplified and conservative accounting methods under China’s emission trading scheme. Their common characteristics are that the granted allowances are not recognised as assets by most emitting entities, emissions allowance assets are measured using the historical cost method, most emitting entities only conduct accounting when there are actual cash flows or outflows with regard to carbon emissions allowance trading, and only a few emitting entities disclose carbon trading information in their financial statements or corporate social responsibility reports. Originality/value This study highlights accountants’ crucial role in carbon activities by guiding emitting entities’ low-carbon initiatives and culture and transforming managers’ mindsets. It also introduces the China Accounting Standards Committee-based accounting methods for allowances and obligations, aiding carbon disclosure quality and sustainability. These findings also inform the carbon accounting standards that may enhance corporate accountability and address climate change.

Manager political preferences and company investor bases

AbstractWe investigate how the personal political preferences of top managers shape the investor base of firms. Based on the risk‐aversion attitude of firm decisions that rely on conservative political ideologies, we find that Republican managers tend to maintain a lower leverage level; invest less in tangible assets and R&D to pursue near‐term profitability; and maintain a high quality of information disclosure to increase stock liquidity. We demonstrate that firms led by Republican managers can attract more transient institutions. This relationship becomes stronger during financially stressful periods and is robust after considering the moderating role of managerial discretion and potential endogeneity.

Impact of The Corporate Governance on Sustainability Report Disclosure with Environmental Performance as A Moderation Variable in Indonesia

This study aims to analyze the effect of corporate governance on sustainability report disclosure, with environmental performance acting as a moderating variable. The analysis focuses on the role of the board of directors, independent commissioners, audit committees, and financial performance in influencing the quality of sustainability reporting, particularly within the Indonesian context. Environmental performance is measured using the PROPER scale. The study utilizes data from the annual and sustainability reports of 20 companies in the basic materials and energy mining sectors listed on the Indonesia Stock Exchange from 2018 to 2022, amounting to 100 observations. The data is processed using SPSS 23. The results show that the presence of female directors significantly enhances the quality of sustainability disclosures, as they tend to prioritize social responsibility. Moreover, financial performance, as measured by Return on Assets (ROA), positively affects sustainability reporting, with companies in better financial health being more transparent in their disclosures. Environmental performance, when combined with strong independent oversight, further improves reporting quality, reflecting the positive influence of independent commissioners and sound financial governance. The study concludes that environmental performance, as measured by the PROPER scale, plays a significant role in improving sustainability disclosures in Indonesia. It recommends that the Indonesian government provide stronger support and clearer regulations to help companies improve their sustainability practices and contribute to the G20 agenda.

The Quality of CSR Disclosure: Effect of Environmental Performance, Slack Resources, and Sensitivity Classification

This study aims to analyze the influence of slack resources, environmental performance, and industry sensitivity on the quality of Corporate Social Responsibility Disclosure (CSRD) in Energy and Basic Materials sector companies listed on the Indonesia Stock Exchange (IDX) during the period 2017 to 2023. Using a quantitative approach and explanatory research design, data was collected from annual reports, sustainability reports, and PROPER ratings from the Ministry of Environment. The results show that slack resources have a positive and significant effect on the quality of CSRD. Companies with higher slack resources tend to have better quality CSR disclosures. Environmental performance also has a positive effect on CSRD quality, where companies that achieve higher PROPER ratings show better CSR reporting. In addition, industry sensitivity has a positive effect on CSRD quality, which suggests that firms in environmentally sensitive industries tend to provide higher quality CSR disclosures to maintain legitimacy and reputation. Control variables Institutional Ownership and Company Size are not able to control the influence of the relationship between Environmental Performance, Slack Resources and Industry Sensitivity on the quality of Corporate Social Responsibility Disclosure (CSRD). These findings provide empirical evidence on the importance of slack resources, environmental performance, and industry sensitivity in improving the quality of CSRD, and offer valuable insights for corporate management and policy makers.

The impact of accounting disclosure according to the standard (IFRS-16) lease contracts on the efficiency of the finan

IFRS-16 standard showed changes in the quality of disclosure and accounting treatment of lease contracts, which was reflected in the information content of the financial statements. The research deals with the statement of the impact of applying IFRS-16 standard on the efficiency of the financial performance of banks by measuring the level of performance according to financial indicators. The research aims to evaluate the changes in reclassifying lease contracts to financing and operating on the financial position of banks. The financial analysis method was adopted, relying on some of the main financial indicators to evaluate the financial performance of Mansour Investment Bank, the research sample, such as the ratio of debt to equity, the ratio of fixed assets to equity, and some other indicators. The most important conclusions are that there is a clear impact in applying the standard on the efficiency of the bank's performance, the research sample. The most important recommendations are the necessity of applying the standard to all Iraqi banks in order to enhance the qualitative characteristics of accounting information in financial statements and increase the efficiency of these banks in the financial markets.

Corporate governance mechanisms and the quality of sustainability reporting – results from a systematic literature review

Purpose: The article investigates the extent to which corporate governance mechanisms have been researched in the context of sustainability reporting quality, given the lack of a standardized non-financial reporting framework and the use of different reporting guidelines by companies.Methodology/approach: We conducted a systematic review of the literature, which included 20 publications carefully selected from 881 publications extracted from the EBSCO database and Google Scholar.Findings: The literature review identified the impact of key corporate governance instruments/mechanisms/attributes on the quality of reporting disclosures, mainly in the area of social responsibility and, to a lesser extent, (developing) sustainability reporting. The results were analyzed geographically, culturally and contextually, with a primary focus on listed companies. Research limitations/implications: The literature review was limited to two databases and academic articles in English and Polish.Originality/value: This is one of the first studies to document the state of research to date on the quality of sustainability disclosures in conjunction with corporate governance.

Climate risk and split ratings: evidence from Korea

ABSTRACT This study examines the effects of climate risk on split ratings. Numerous studies have examined the correlation between financial reporting quality and split ratings. However, few studies have explored the effect of business ethics on split ratings. Thus, this study focuses particularly on environmental factors within the broader context of Environmental, Social, and Governance (ESG), that have recently attracted significant attention. We conducted a multiple regression analysis of the impact of climate risk on split ratings using a dataset of companies listed on the Korea Exchange. The analysis indicates that climate risk, which encompasses a firm’s greenhouse gas emissions and energy consumption, contributes to the split ratings of corporate bonds. This observation implies that heightened exposure to climate risk amplifies the likelihood of split ratings owing to diminished accounting transparency resulting from practices such as earnings management and a decline in the quality of disclosures. This study not only expands the understanding of the determinants of split ratings theoretically, but also offers investors empirically supported insights into the relevance of considering climate risk in their investment and credit decisions. Furthermore, this suggests the necessity for government policymakers to establish a monitoring system aimed at alleviating potential information asymmetry issues for firms facing elevated climate risk.