Disclosure Standards Research Articles

Forensics Accounting in Business Law of the Kingdom of Saudi Arabia

Abstract This paper is dealing with one of the major challenges confronting the development of forensic accounting primarily legislation to combat fraudulent practices in the Kingdom of Saudi Arabia. The focus of our research is corporate and practice in the finance and banking sectors, since business operations are becoming more complex, especially with the recent developments in information and communication technology and as a consequence of the global pandemics of Covid-19 and the looming economic crisis. This has changed the nature of corporate fraud and fraudulent practices. This study has a primary goal to investigate the theoretical aspects of the integration of forensic accounting and corporate law and related regulation as tools for combating corporate and cyber fraud. In that sense, forensic accounting with a more than strong backing in the legislative aspects is strongly geared towards the minimization of the cost of employed capacities for forensic accounting activities to mitigate and eventually eliminate cyber fraud. The study also explores the effect of integrating forensic accounting and management control systems on banks’ reputations and the huge loss of revenue resulting from cyber fraud. The study develops a conceptual model to show the relationship between forensic accounting, the management control system, and cyber fraud in the banking sector. A legal context analysis methodological research approach was employed to express the relationship amongst the variables considered in this study to reduce corporate and public sector fraud, minimize cost and improve the reputation of corporate and public government sectors. Preliminary research in the formulation of clear conclusions gives an idea of the feasibility of combining the components of forensic accounting, corporate and related laws and regulations, management control systems, and corporate reputation to combat business fraud. This was validated in some general conclusions which resulted in an acceptable, logical, and feasible model of forensic accounting solidly founded in corporate law and structure. Some of the findings are that the speed and ease of convergence process symbiotic integration of forensic accounting and corporate law is the best solution that is feasible and suitable for achieving the set objectives. Our initial conclusion and recommendation are that the government of the Kingdom of Saudi Arabia should introduce legislation that would ensure strict corporate disclosure standards, requirements, and norms as this would defend companies’ critical assets as well as its anti-fraud programs.

Aligning Private Climate Risk Management to Paris Climate Goals: An Australian Perspective

Climate change is now clearly recognised as a source of financial risk for private sector actors. In Anglo-American jurisdictions like Australia, corporate law and prudential regulatory frameworks contain obligations to identify, disclose and manage material financial risks that can be applied to climate-related risks. These legal frameworks have served as a foundation for the emergence of a range of private regulatory initiatives which seek to develop and apply best practice standards for climate risk disclosure and management, and which involve a range of different actors in driving the uptake of, and seeking to enforce, these standards. This paper explores the body of emerging private climate risk regulation, focusing particularly on the central organising theme of these initiatives: aligning private climate risk management to the climate mitigation goals of the international Paris Agreement. It outlines the way in which Paris-alignment and net-zero emissions are emerging as new norms guiding private sector approaches to climate change and explores how this interacts with and builds on essentially climate-neutral, risk-based corporate law and prudential regulatory frameworks. While there is considerable potential in Australia for Paris-aligned private risk management to contribute meaningfully to achieving international climate mitigation goals, there are also well-founded concerns about the effectiveness of these private measures that require further investigation.

РОЛЬ ПРОФЕССИОНАЛЬНОЙ ЭТИКИ И ВНУТРЕННЕГО АУДИТА В РАСКРЫТИИ ИНФОРМАЦИИ О ПРЕДПРИЯТИИ

The issue of disclosure continues to be a challenge for users of financial and non-financial reporting and the accounting standards community. Financial disclosure standards aim to improve the qualitative characteristics, comparability, verifiability, timeliness and understandability of financial statements. Enterprises that implement the principles of the ESG agenda face the problem of disclosing information about the results of socially responsible activities in non-financial reporting. Such reporting is optional and standardized. This is due to the voluntary nature of socially responsible activity. The quality of information disclosure is determined by professional ethical principles and internal audit.

KOSPI 상위 10개 기업의 산업별 중요성을 반영한 ESG 공시 충실성 연구

Voluntary ESG disclosure practices are on the rise, oftentimes not fully embracing material ESG information which is in increasing demand in the capital market. This calls for the adoption of financially material ESG disclosure standards. The SASB standards, with their clear industry-specific material disclosure guidelines, are gaining legitimacy in Korean and global markets. This study examines the disclosure integrity of ESG disclosures of the Top 10 companies listed on the KOSPI in terms of industry-specific financial materiality. We construct a coverage-ratio-scoring-mechanism by mapping Bloomberg ESG Disclosure datasets and sustainability reports to the SASB standards. The results show that 1) during 2018-2020, KOSPI Top 10 firms showed advanced industry-specific material ESG disclosure both in quantity and quality and 2) readily-available Bloomberg ESG Disclosure datasets did not fully capture the scope of the SASB-related disclosure practices of the sample firms.

What Remains Unsolved in Sub-African Environmental Exposure Information Disclosure: A Review

Background: Africa comprises the bulk of struggling economies. However, Sub-Saharan Africa is experiencing rapid industrialization and urbanization. Excessive resource use, pollution, and the absence of relevant environmental disclosure are factors that contribute to these human-made damages. Environmental pollution as a threat to sustainable development results from these damages. Although it has been established that Sub-Saharan Africa would benefit from resource-management development, sustainable environmental strategies, and a reduction in urbanization and persistent poverty, the information on these issues has not been made public. Objective: To provide a full account of the level of environmental-exposure disclosure in Sub-Saharan African countries, including the current level of progress, gaps, and prospects, we reviewed the literature on environmental exposure information research in African populations. Methodology: We searched PubMed and Google Scholar for peer-reviewed research articles, reviews, or books examining environmental exposure and information disclosure in human populations in Africa. Results: In total, 89 full-text articles were eligible for the inclusion criteria. A quality assessment of the retrieved articles using the PRISMA guidelines resulted in the exclusion of 40 articles; therefore, 49 studies were included in the final analysis. In Sub-Saharan Africa, the environmental exposure information on household injuries, the use of chemicals such as pesticides in farming, industry-linked vectors and diseases, laboratory chemical exposure, industrial exposure, and epigenetic factors are not well-disclosed to the population. Conclusion: Environmental information disclosure standards should be incorporated into central-government policy recommendations. Standards should identify polluting industries, and companies should refrain from the voluntary disclosure of environmental information to manage their reputation. Heavy-pollution industries should be made sufficiently transparent to lessen the company–media collusion on information disclosure.

The Implication of IFRS Financial Instruments Disclosure on Value Relevance

The main objective of this research is to examine the effects of financial instruments declared under IFRSs on value relevance over thirteen years. The research sample included 35 European enterprises that were listed on the main market of the London Stock Exchange from 2007 to 2019. This study focuses on the adoption of IFRS.7 and IAS.32 disclosure standards, in line with previous studies. The Ohlson model (1995) was utilised in the study to evaluate the dependent variable since it is the module used most often in determining value relevance. The findings indicated that financial knowledge about financial instruments (FI) was typically valuable throughout the research. In addition, the significance of financial instruments and other disclosures when examining sub-components were not valued as relevant but rather provided information regarding the kind and level of exposure to FI risks. Furthermore, the earnings and book value of the common equity have a favourable impact on the value relevance. Hence, the key contributions of this study went beyond enriching the body of literature to make recommendations regarding the most influential determinant among financial instrument items that positively enhance value relevance.

Mainstreaming environmental, social and governance integration in investment practices in South Africa: A proposed framework

Orientation: Responsible investment (RI) is gaining prominence globally. As South African asset managers increasingly apply environmental, social and governance (ESG) criteria, they require improved guidance on the integration thereof in mainstream investment practices.Research purpose: A best-practice framework for ESG integration is proposed based on empirical results and international standards.Motivation for the study: The mainstreaming of ESG is examined in South Africa, a country where integrated disclosure by listed companies is well established and asset managers are challenged to meet international standards while facing emerging market realities.Research approach/design and method: Selected South African asset managers completed a questionnaire and semi-structured interviews were conducted with national and international asset managers to gauge their views on ESG integration best practices.Main findings: The findings highlight the limited local opportunity set and scope to increase client demand for RI in South Africa. Inconsistencies were noted in how the local asset managers incorporated material ESG information in their investment policies and practices.Practical/managerial implications: ESG integration should form part of the entire investment process. To effectively apply the proposed ESG framework, Investment managers should formalise and publish comprehensive RI policies and develop internal ESG data provision systems covering material subjects defined by international ESG disclosure standards. Invest managers are encouraged to conduct ongoing engagement with investee companies on key ESG issues.Contribution: While the need for ESG integration is recognised, local asset managers require improved guidance on the incorporation of complex ESG issues. A best-practice framework for ESG integration is hence proposed.

Study of Carbon Disclosure and Its Differences Between Different Countries Based on the Case of Energy Company Shell

Low carbon sustainable development is a popular issue in contemporary economic development, after the Kyoto agreement was signed, various countries around the world invested in the establishment of a carbon trading market and the system of carbon information disclosure system. For the research on carbon information disclosure, the current researchers focus more on accounting issues such as how to recognize and measure, however, there is a lack of uniform regulations on how to disclose carbon information for multinational enterprises. Therefore, this article takes Shell as an example to investigate the differences in carbon information disclosure standards between China and the UK by analyzing the differences between its carbon information disclosure in the UK and China. It is discovered that China is in the initial stage of establishing both the carbon market and carbon information disclosure, while the UK, as a developed country, has formed a relatively perfect carbon information disclosure system, in addition to the different attitudes of Chinese and foreign media. In order to establish a comprehensive carbon information disclosure standard in China, government policies, media support and corporate actions are needed to eliminate the inequality of carbon information disclosure among multinational companies.

The Influence of Environmental, Social, and Governance Performance on Foreign Investment

Research aims: This study aims to investigate the effect of environmental, social, and governance (ESG) performance on foreign investment through corporate reputation.Design/Methodology/Approach: This study’s population was all non-financial companies listed on Indonesia Stock Exchange from 2015 to 2019. Moreover, the hypotheses testing technique used was Two-Stage Least Square (2SLS), with 150 observations distributed in balanced panel data. In addition, additional analysis was conducted to examine how each company paid attention to ESG practices based on its industry classification through descriptive statistical analysis.Research findings: The regression results revealed that companies with good ESG performance tended to have a high level of foreign investment. However, it could not be explained by the corporate reputation. In an additional test, this study documented that the mining industry had a much better ESG performance than other industrial groups.Theoretical contribution/Originality: This study pays attention to foreign investment through trading domestic equity shares, whereas previous studies only focused on ESG practices in the FDI process. In addition, this study examined corporate reputation in explaining the relationship.Practitioner/Policy implication: The research results can be used by standard setters in developing sustainability disclosure standards in Indonesia, which International Sustainability Standards Board is currently initiating.Research limitation/Implication: The weakness in this study is the small number of samples employed in the test due to the minimal availability of ESG data in the database.

Compliance Level with Ifrs 7 by Deposit Money Banks: Whither Nigeria

Purpose: The study examines the compliance level with IFRS 7 by deposit money banks in Nigeria for the period between 2017-2020.
 Design/Methodology/Approach: The study adopts an un-weighted disclosure index method to test the two hypotheses and using Qualitative Grading System (QGS) to rank the level of compliance with the aid of explorative research design.
 Findings: The study found that in average, the over-all compliance by DMBs at commencement year stood at 51.04% and this implies that as at the commencement year DMBs weakly complied with the requirements of IFRS 7.
 Implications/Originality/Value: The study concluded that though DMBs in Nigeria do not totally comply with the provisions of IFRS 7 throughout the study period yet, there have been significant improvements in the level of compliance with the standard disclosure in the annual reports of DMBs in Nigeria. It’s therefore recommending that banks should strive to ensure full compliance with the standards as this will add more confidence in the economy. This must be done with the enforcement of regulatory bodies. The FRCN should intensify its mandate to ensure banks strictly comply with the provisions of IFRS.

Sustainable corporate environmental information disclosure: Evidence for green recovery from polluting firms of China

For a greener society, good corporate environmental information disclosure is crucial. This study empirically examines the influence of media attention and state-owned equity, and their interaction on corporate environmental information disclosure by A-share heavily polluting firms in the Shanghai and Shenzhen stock markets from 2015 to 2019. The results show that state-owned equity can improve the level of corporate environmental information disclosure; however, it mainly affects financial environmental information disclosure. Media attention also improves the level of corporate environmental information disclosure, but only for non-financial environmental information. Moreover, media attention and state-owned equity have a certain substitution effect on environmental information disclosure: a higher state-owned equity ratio weakens the positive effect of media attention on environmental information disclosure. To improve environmental information disclosure, the government must clarify disclosure standards to improve the comparability of environmental information. In addition, media and shareholders can fully leverage their external and internal supervisory roles to promote the environmental responsibilities of firms. Our findings can be useful for further promoting corporate environmental information disclosure and developing relevant policies.

Voluntary Assurance of Sustainability Reports: Evidence from Indonesia

Purpose : This study aims to prove the determinants of the adoption of assurance statements in companies in Indonesia. Several companies in Indonesia have included assurance reports in their sustainability reports as a voluntary disclosure. This phenomenon motivates this study, considering that sustainability report assurance is gaining interest among companies, but there is still very little literature discussing this issue, specifically in Indonesia. This research will fill the research gap on sustainability report assurance. 
 Method : Using data from companies participating in ASRRAT (Asian Sustainability Report Rating) for five years (2017 – 2021), this study assesses the influence of governance, profitability, and company age on the company’s decision to adopt assurance on sustainability reports. Total unit analysis are 140 sustainability reports from 28 companies. 
 Findings : The results show that governance, profitability, and the company age significantly influence the adoption of assurance on sustainability reports. This study provides preliminary evidence of the willingness of companies to adopt assurance of sustainability reports in Indonesia by identifying characteristics that distinguish Indonesia from other countries concerning the choice to implement an assurance for sustainability reports. 
 Novelty : This research uses governance measures based on the GRI standard of governance disclosure standards, consisting of 29 disclosure indicators. Previous studies linking governance with sustainability reports only tested specific governance mechanisms, such as the audit committee, board of directors, or diversity.
 Keywords : Assurance Statement; Corporate Governance; Sustainability Report

Investigation and Analysis of the Status Quo of Social Organization Standards in Chinese Civil Astronautics Field

China has realized that it is difficult to establish enough standards to meet the market demand in some innovative fields by relying on government standards alone. The social organization standards developed by non-governmental organizations and social organizations are developing rapidly. This paper analyzes the current development and existing problems of social organization standards in the field of Chinese civil astronautics, takes the data of the national social organization standards information platform as the research object, and conducts mining and key analysis by extracting important data such as standard type, standard publication and implementation time, and standard disclosure, put forward suggestions to strengthen the building of social organization standardization capabilities, improve public recognition, and promote the development of technology in the field of civil astronautics in China.

Integrated report quality and earnings management – Evidence from South Africa

Background: No prescribed standard disclosure requirements for integrated reporting exist. Instead, the International Integrated Reporting Framework is widely adopted, which provides guidelines for integrated reporting to improve the quality of information reported to end-users. These guidelines, however, allow management a degree of freedom in implementing integrated reporting, making the quality of disclosure thereof dependent on management’s approach to reporting. In contrast to the purpose of integrated reporting stands the management of earnings where management can use judgement to manipulate financial reports to mislead end-users. The conflicting theoretical objectives of integrated reporting and earnings management (EM) pose the question of how these two variables relate to one another.Aim: We examine the association between the quality of integrated reports and EM.Setting: Our sample consists of 238 company-years from 2013 to 2017 that were listed as part of the Johannesburg Stock Exchange (JSE) top 100 companies and were ranked on Ernst and Young (EY’s) annual Excellence in Integrated Reporting Awards. The likely association between integrated report quality (IRQ) and EM was identified based on theoretical frameworks, including the stakeholder and agency theories.Method: We perform a robust, one-way cluster regression on our main empirical model, measuring IRQ on rankings, determined by the annual EY Excellence in Integrated Reporting Awards and EM through discretionary accruals.Results: We find a statistically significant negative association between EM, measured as income increasing accruals, and IRQ.Conclusion: Results suggest that companies with income increasing EM activities are less likely to disclose higher quality integrated reports.

Transitional Climatic Risk Assessment of Indian Firms Listed in BSE 100

The global economies are battling the global climatic change, and so is India. By signing the Paris Agreement in 2015, India is one among the 196 countries trying to reduce greenhouse gas (GHG) emissions and reach the desired climatic temperature of 2°C above pre-industrial levels. During this global transition, the role of the financial sector is crucial and cannot be undermined. The purpose of this study is (a) to analyse the sustainable finance practices in India, (b) to analyse the physical climatic risk exposure that India is into, (c) to analyse the transitional climatic risk exposures faced by Indian firms, (d) to analyse the policy initiatives by Indian government and global reporting standards on sustainability and, finally, (e) to perform a climate scenario analysis using the Paris Agreement Climate Transition Assessment (PACTA) model to materialize the transitional climatic risks faced by Indian firms in BSE 100. The study uses an inductive approach for its analysis. The study addresses few issues related to sustainable finance practices in India and questions the credibility of the sustainable reporting practices. The findings of this study evidently proves that Indian firms are not prepared to align themselves with climate-oriented investment plans for the future and insists for strong mandatory climate-relevant disclosure standards in India.

Comparative Analysis of Environmental Accounting and Corporate Performance in Nigeria

The study analyzed the performance of Nigerian publicly traded corporations in terms of environmental accounting (green accounting). The investigation covers the years 2012 through 2020 using secondary data and an ex-post-facto approach. This methodology was chosen since the data had already been documented by reputable organizations like the Central Bank of Nigeria and other financial institutions. Five publicly traded firms were chosen at random from among the research's overall population: Oando, Shell, Agip, Coin Oil, and ALCON Oil. The study comprised all publicly traded Nigerian enterprises. Using Ordinary Least Square (OLS) methodology. The findings of the study exposed that restoration, redemption, and compensation expenses positively affect the companys’ performance, on performance. That is, green accounting has aided in the improvement of organizational performance in the majority of Nigeria's publicly traded companies. It also demonstrates that the majority of the firms mentioned are active in restoration, redemption, and compensation testing. The article recommends that, a standard should be created for analyzing, treating, and reporting a company's environmental actions. For the purposes of performance control and assessment, publicly traded companies should establish common environmental reporting and disclosure standards. Companies' competitiveness and overall performance can be enhanced by making their environmental practices public in their annual reports

Approaches to climate-related risk disclosure in the draft international climate-related disclosure standard

Subject. This article discusses the Exposure Draft IFRS S2 Climate-related Disclosure Standard. Objectives. The article aims to address the content of the proposals set forth in the Exposure Draft that is one of the first documents published by the International Sustainability Standards Board in the structure of the IFRS Foundation for comment. Methods. For the study, I used analysis, synthesis, comparison, and generalization. Results. Based on a study of the structure of the Exposure Draft IFRS S2 Standard, the article notes that the main focus is on disclosing information about the impact of significant climate-related risks and opportunities on the value of the enterprise, which is useful to users of general-purpose financial statements. Conclusions and Relevance. The approaches to disclosing climate-related risks and opportunities proposed in the Exposure Draft IFRS S2 Standard can help improve the quality of decision-making by key users of general-purpose financial statements. They can be used by Russian organizations to disclose information on climate-related risks and opportunities.

The market value of cash and the creation of high‐governance listings of voluntary adoption: Evidence from the Brazilian stock exchange

AbstractResearch Question/IssuesIn this article, we analyze whether the initiative of a domestic stock exchange that designed three high‐governance listings of voluntary adoption, in addition to maintaining its traditional listing, can mitigate managers' ability to expropriate cash. As a result of the reduction in improper cash diversion in firms with higher disclosure and corporate governance standards, we hypothesize that investors place a higher value on cash in the firms that voluntarily migrate to the premium listing.Research Findings/InsightsAfter a series of robustness checks, we document that investors place a higher value on the cash of firms from the non‐mandatory premium listing ($0.589) in relation to the cash of the companies from the regular traditional listing ($0.239). Our findings also reveal that the market value of cash is higher in firms from the segment with the highest standards ($0.687), where companies follow the “one share, one vote” principle.Theoretical/Academic ImplicationsThe empirical results suggest that shareholders associate the premium listings segments as a commitment that reduces the risk that cash holdings will be converted into private benefits, and consequently, they place a premium on the cash of companies that subject themselves to these levels. Hence, by lessening shareholders' markdown of cash holdings, the premium listing segments mitigate part of the value loss associated with weak governance in Brazil.Practitioner/Policy ImplicationsOur results provide important policy implications by demonstrating that a domestic stock exchange, by creating a premium listing of voluntary adoption, can provide mechanisms for firms to self‐select into segments with greater transparency and stricter corporate governance that, in turn, send a positive signal about the underlying risk that firms may expropriate cash. Hence, emerging countries where reforms of corporate law are designed to protect investors from facing serious political opposition may also consider creating special listings such as in Brazil, as a private contractual arrangement, to increase the protection of shareholders.

User-friendly yet rarely read: A case study on the redesign of an online HIPAA authorization

In this paper we describe the iterative evaluation and refinement of a consent flow for a chatbot being developed by a large U.S. health insurance company. This chatbot’s use of a cloud service provider triggers a requirement for users to agree to a HIPAA authorization. We highlight remote usability study and online survey findings indicating that simplifying the interface and language of the consent flow can improve the user experience and help users who read the content understand how their data may be used. However, we observe that most users in our studies, even those using our improved consent flows, missed important information in the authorization until we asked them to review it again. We also show that many people are overconfident about the privacy and security of healthcare data and that many people believe HIPAA protects in far more contexts than it actually does. Given that our redesigns following best practices did not produce many meaningful improvements in informed consent, we argue for the need for research on alternate approaches to health data disclosures such as standardized disclosures; methods borrowed from clinical research contexts such as multimedia formats, quizzes, and conversational approaches; and automated privacy assistants.

Does the mandatory disclosure of audit information affect analysts' information acquisition?

This paper explores the effect of public information on analysts' information acquisition. By introducing the implementation of the Key Audit Matters (KAM) Disclosure Standards for China's firms cross-listed in Hong Kong in 2017, we present evidence that KAM disclosure reduces analysts' firm visits, which is an important channel of information acquisition. The effect is particularly pronounced for firms with audit partner rotation and low institutional ownership. KAM disclosure by industrial leaders has a spillover effect on analyst visits for peer firms. Disclosure also improves the frequency and quality of analysts' forecasts and firms' information environments, indicating that KAMs are informative and audit information is an important determinant of analysts' information acquisition. Our study reveals the real effect of KAM disclosure on analyst decisions, which may be of interest to regulators concerned with the mandatory disclosure of audit information and capital market efficiency.