Enhance Corporate Accountability Research Articles

Analysis of the Role of Social Accounting in Addressing Income Inequality and Environmental Influences

This study examines the role of social accounting in addressing income inequality and managing environmental impacts, highlighting its adaptability across diverse socio-economic contexts and its contribution to corporate social responsibility (CSR). Utilizing a systematic literature review, this study synthesizes insights from recent research to explore how flexible social accounting frameworks align with different regulatory and socio-economic environments. It assesses both theoretical foundations and practical applications. Legitimacy theory serves as a conceptual basis, framing social accounting as a tool for building public trust and enhancing corporate accountability. The findings suggest that social accounting effectively promotes economic and environmental transparency. Social accounting fosters greater public trust and aligns corporate actions with societal expectations by enabling companies to record and report wage distribution, employment practices, and environmental metrics. The study also underscores the importance of flexible social accounting frameworks that allow companies to adapt to local socio-economic conditions, especially in regions with resource constraints or unique regulatory environments. This study advances the understanding of social accounting’s dual role as a reporting and strategic tool for sustainable development. Practically, it suggests that companies adopting adaptable social accounting frameworks can improve stakeholder relations, build credibility, and support long-term sustainability goals. These findings are relevant for corporate managers, policymakers, and future researchers interested in the impact of socially responsible practices on corporate reputation and public trust.

Enhancing corporate accountability through covert situational integrity testing (CSIT)

ABSTRACT This article explores the potential of ‘covert situational integrity testing’ as a mechanism for assessing corporate/organisational compliance with legal rules and standards, the goal being to enhance corporate/organisational accountability. There are major challenges to holding corporations/organisations to account for non-compliance: low detection levels, incomplete understanding of the inner workings of organisations, and the modest power of current social scientific research methodologies. This article argues there is scope for methodological innovation through the use of covert situational integrity testing, a variation of mystery shopping methodologies, to address some of these gaps, with a focus not on service quality or customer satisfaction but on compliance with regulatory and legal requirements, and as a data gathering tool on secretive and difficult to access areas of business operation. We focus on two examples: AML compliance by challenger banks, and the promotion of aggressive tax avoidance schemes. Our core argument is that covert situational integrity testing provides a research mechanism through which robust and systematic observational data can be collected and scrutinised by independent, third-party assessors to understand levels of organisational/corporate compliance with legal rules and standards, and by doing so, identify critical vulnerabilities and strengths in the compliance responses of organisations and industries.

Reconstruction of Abandonment and Site Restoration (ASR) Regulations to Create a Conducive Investment Climate in the Oil and Gas Sector

The reorientation of policies related to Abandonment and Site Restoration (ASR) in the oil and gas industry is an important step to ensure environmental sustainability post-operation. This research aims to evaluate the implementation of ASR policies in Indonesia, regulated under Law No. 22 of 2001 on Oil and Gas and Government Regulation No. 27 of 2012 concerning Environmental Permits. The methodology used includes qualitative analysis of existing regulations, in-depth interviews with stakeholders in the oil and gas sector, and case studies of several companies that have implemented ASR practices. By focusing on the aspect of corporate responsibility in site recovery after operational activities, this research identifies the challenges faced by businesses in implementing sustainable ASR practices. The findings indicate the need for a review of existing regulations to align with sustainability principles and environmental protection. Recommendations for policy improvement include strengthening oversight, developing clear technical guidelines, and increasing local community engagement in the restoration process. It is expected that this policy reorientation can enhance corporate accountability and protect the environment, providing positive impacts for communities and ecosystems surrounding operational sites.

Exploring the impact of digital knowledge, integration and performance on sustainable accounting, reporting and assurance

Purpose The purpose of this study is to perform bibliometric analysis to systematically and comprehensively examine the current landscape of digital knowledge, integration and performance in the transformation of sustainability accounting, reporting and assurance. Design/methodology/approach This research uses a systematic literature review, following the Scientific Procedures and Rationales for Systematic Literature Review protocol and uses various bibliometric and performance analytical methods. These include annual scientific production analysis, journal analysis, keyword cooccurrence analysis, keyword clustering, knowledge gap analysis and future research direction identification to evaluate the existing literature thoroughly. Findings The analysis reveals significant insights into the transformative impact of digital technologies on sustainability practices. Annual scientific production and journal analyses highlight key contributors to the adoption of digital technologies in sustainability accounting, reporting and assurance. Keyword cooccurrence analyses have identified key themes in sustainability accounting, reporting and assurance, highlighting the transformative role of digital technologies such as artificial intelligence (AI), blockchain, Internet of Things (IoT) and big data. These technologies enhance corporate accountability, transparency and sustainability by automating processes and improving data accuracy. The integration of these technologies supports environmental, social and governance (ESG) reporting, circular economy initiatives and strategic decision-making, fostering economic, social and environmental sustainability. Cluster-by-coupling analyses delve into nine broader revealing that IoT improves ESG report accuracy, eXtensible Business Reporting Language structures ESG data and AI enhances life cycle assessments and reporting authenticity. In addition, digital transformation impacts environmental performance, big data optimizes resource use and edge computing improves eco-efficiency. Furthermore, this study identifies avenues for future research to advance the understanding and implementation of digital technology in sustainability accounting, reporting and assurance practices. Research limitations/implications Academically, this research enriches the understanding of how digital technologies shape sustainability practices and identifies gaps in digital knowledge and integration. Practically, it provides actionable insights for organizations to improve sustainability reporting and performance by effectively leveraging these technologies. Policy-wise, the findings advocate for frameworks supporting the effective implementation of these technologies, ensuring alignment with global sustainability goals. Originality/value This study offers a detailed analysis of the performance and intellectual framework of research on implementing digital technology in sustainability accounting, reporting and assurance. It highlights the evolving research landscape and emphasizes the need for further investigation into how emerging technologies can be leveraged to achieve sustainability goals.

The Role of Environmental Accounting in Mitigating Environmental Pollution Risk and its Disclosure

This research explores the critical role of environmental accounting in mitigating environmental pollution risks and improving disclosure practices. Environmental pollution has become a significant global concern, amplified by industrial activities and mismanagement of natural resources. As stakeholders increasingly demand corporate responsibility, environmental accounting has emerged as a pivotal tool for organizations to quantify their environmental impacts, integrate eco-ethics into their financial systems, and enhance transparency in environmental risk disclosures. This study examines how environmental accounting frameworks can aid in reducing corporate pollution by identifying the cost of pollution-related activities and aligning them with financial decision-making processes. Additionally, the research investigates the regulatory frameworks that promote environmental transparency and the challenges that companies face in implementing these practices. Case studies on corporate environmental accounting demonstrate both the potential and limitations of current practices. The research concludes with recommendations on the strategic integration of environmental accounting to foster sustainability and risk mitigation. These findings underscore the importance of consistent environmental disclosure in enhancing corporate accountability and in reducing environmental risks.

Management by keywords

Abstract We examine a corpus of integrated reports endorsed as best practice to explore how the concept of ‘capital’ and its novel extension into six types of capitals — including ‘human’, ‘social and relationship’, and ‘natural’ — are discursively constructed and legitimised in the corporate field. Our findings show that the new capitals are mentioned frequently, but in a bullet point-like way without elaboration on their significance — a response strategy that we call ‘management by keywords’. Our analysis suggests that the collective business mindset remains centred on financial value creation, with the new capitals acting as servants to financial objectives. This questions the transformative power of the six capitals, hailed as a business innovation, to move corporate practices towards more social and environmental sustainability via enhanced corporate accountability. At the conceptual and methodological level, the study showcases the potential of corpus linguistics for fostering interdisciplinary research involving linguists and scholars in business and accounting.

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.

CSR's Moral Commitment and Greenwashing

This research explores the phenomenon of greenwashing within the context of Corporate Social Responsibility (CSR) and examines its ethical implications. Greenwashing refers to the practice of companies presenting themselves as more environmentally responsible than they are, misleading stakeholders and undermining genuine CSR efforts. The study investigates the deceptive nature of greenwashing, analyzing its prevalence across various industries and its impact on corporate credibility. It also explores ethical frameworks, such as Max Weber’s typology of ethics, to understand how current CSR practices may inadvertently promote greenwashing. Effective communication and stakeholder engagement are identified as critical factors in preventing greenwashing, emphasizing the need for transparency. The paper reviews existing regulatory measures and voluntary standards aimed at curbing greenwashing and proposes a hybrid approach that combines both to enhance corporate accountability. The findings underscore the importance of a robust framework to ensure that CSR initiatives are genuine and impactful, addressing the challenges posed by greenwashing

Influence of Ethical PR Practices on Corporate Image during Scandals in Tanzania

Purpose: The aim of the study was to assess the influence of ethical PR practices on corporate image during scandals in Tanzania. Materials and Methods: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries. Findings: The study indicated that maintaining ethical standards significantly mitigates reputational damage. Ethical PR strategies, including transparency, accountability, and timely communication, help companies navigate crises more effectively. Transparency ensures that all relevant information is disclosed promptly, fostering trust among stakeholders. Accountability demonstrates a company's commitment to taking responsibility for its actions, which can help regain public trust. Timely communication ensures that the company controls the narrative, reducing the spread of misinformation. Studies indicate that companies employing ethical PR practices during scandals tend to recover faster and sustain less long-term damage to their corporate image. Additionally, these practices can turn a crisis into an opportunity to showcase the company's integrity and commitment to ethical standards, potentially strengthening its reputation in the long run. Overall, ethical PR practices are crucial in safeguarding and enhancing corporate image during and after scandals. Implications to Theory, Practice and Policy: Situational crisis communication theory (SCCT), stakeholder theory and image restoration theory may be used to anchor future studies on assessing influence of ethical PR practices on corporate image during scandals in Tanzania. Encourage organizations to establish proactive ethical guidelines for PR professionals. Advocate for the establishment of a regulatory framework that mandates ethical practices in PR. This policy can help standardize ethical behavior across the industry, enhancing corporate accountability.

Unraveling the Link between Perceived ESG and Psychological Well-Being: The Moderated Mediating Roles of Job Meaningfulness and Pay Satisfaction.

Enhancing corporate accountability in areas such as environment, social, and governance (ESG) has solidified its role in the discussion on improving corporate resilience and growth. ESG management activities not only augment corporate sustainability and risk control but also influence the professional roles and personal lives of members through their perceived ESG. Historically, most ESG research has centered on the interrelation of corporate ESG endeavors and outcomes, while studies focusing on the influence of perceived ESG on members have been sparse. In this light, our investigation, rooted in the conservation of resources theory, aimed to delineate the mechanistic link between perceived ESG and members' psychological well-being. This study employed a stratified random sampling technique and collected data across three waves, each spaced four weeks apart. Our sample comprised 325 Korean employees working in administrative, technical, service, and sales roles. This study recruited 325 Korean employees across three time-lagged phases and found that ESG comprehension enhances job meaningfulness, subsequently amplifying psychological wellness. Intriguingly, as pay satisfaction escalates, the mediating role of job meaningfulness between perceived ESG and well-being intensifies. Our study underscores that for organizations to harness perceived ESG to boost psychological well-being via job meaningfulness, managing pay satisfaction is imperative. These findings highlight a crucial policy implication: policymakers must actively promote ESG awareness and incorporate it into employee compensation strategies. This integration is essential to cultivating a healthier, more engaged workforce and driving long-term organizational success.

Hardening corporate accountability in commodity supply chains under the European Union Deforestation Regulation

AbstractThe European Union (EU) has recently introduced the Deforestation Regulation to close regulatory gaps in the sustainability and legality of global forest and agricultural commodity supply chains. We analyze this regulatory policy change by drawing on accountability scholarship and institutionalist theories of regulation. Our results show that the Regulation aims to enhance corporate accountability mechanisms through mostly state‐based hard regulation of commodity supply chains, reducing the role of market incentives and private regulation. This policy change is found to be the result of strategic policy‐oriented learning from perceived accountability failures of existing soft market‐based instruments, voluntary trade agreements, and experience with market‐correcting EU timber legality trade rules in a politically favorable context. The institutionalization of new forest‐risk commodity supply chain accountability norms in new EU trade rules would, by design, harden foreign corporate accountability for negative socio‐environmental externalities. However, the de‐facto hardening will depend on the final regulatory design, acceptance, compliance, implementation, enforcement improvements, and avoidance of leakage effects.

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.

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.

Foreign corporate accountability: The contested institutionalization of mandatory due diligence in France and Germany

AbstractIn the recent past, European states have adopted mandatory due diligence (MDD) laws for holding companies accountable for the environmental and human rights impacts of their supply chains. The institutionalization of the international due diligence norm into domestic legislation has, however, been highly contested. Our contribution analyzes the discursive struggles about the meaning of due diligence that have accompanied the institutionalization of MDD in Germany and France. Based on document analysis and legal analysis of laws and law proposals, we identify a state‐centric, a market‐based, and a polycentric‐governance discourse. These discourses are based on fundamentally different understandings of how the United Nations Guiding Principles on Business and Human Rights should be translated into hard law. By outlining these discourses and comparing the related policy preferences, we contribute with a better understanding of different ways in which MDD is institutionalized, with important consequences for the possibilities to enhance corporate accountability in global supply chains.

The development and application of a decision-useful measure of environmental best practice for the mining industry

PurposeThe failure of environmental reporting to meet the needs of stakeholders is partly due to the gap, or inconsistency, between information disclosed in corporate reports and the underlying quality of environmental management. Within the context of the mining industry, this paper present a novel approach to close this gap. By measuring and reporting the comprehensiveness of environmental management – in a manner consistent with the qualitative characteristics applied within financial reporting – this paper contends that stakeholders can, as a result, better assess the environmental risk of mining operations and hold organisations more accountable for their environmental commitments.Design/methodology/approachUsing interviews and surveys, this paper draws on the knowledge of experienced environmental practitioners to measure the otherwise intangible quality of “environmental management”. The accounting metric developed is then used to quantify the comprehensiveness of environmental management of thirty Australian-based mine sites.FindingsThe findings suggest: (1) the accounting metric presented in this paper could better inform the decisions of both internal and external stakeholders; (2) significant variation in the comprehensiveness of environmental management exists within corporate entities and across the mining industry; (3) ISO 14001 is generally an indicator – but not a guarantee – of strong environmental management and (4) ISO 14001 self-declarations are largely symbolic.Originality/valueThe accounting metric presented in this paper could better inform user decisions, enhance corporate accountability and drive continuous improvement in environmental management. It could also provide a foundation for similar customised metrics in other industries and across other areas of sustainability.

Transnational Migration of Laws and Norms in Corporate Governance: Fiduciary Duties and Corporate Codes

This paper explores the intersection of transnational law with contemporary corporate governance laws and principles. Transnational law, it must be said, is a far from settled concept. There is uncertainty as to what the term actually means, and how it differs from other concepts, such as national legal ordering or global law. For early theorists, the essence of transnational law was whether it regulated conduct or events that crossed national boundaries. More recent scholarship, however, has focused not on what is being regulated, but rather on how laws and norms are transmitted between supranational and local levels.Corporate governance, with its complex array of public and private actors, fits naturally within the modern conception of transnational law as a species of law that “can no longer be viewed through a purely national lens”. Financial markets today are global and interconnected and events, such as the 2007-2009 global financial crisis and the current COVID-19 crisis, exemplify the risk of contagion across those markets.Not only can corporate governance problems transcend national boundaries, so too can their solutions, which often involve regulatory efforts that operate at a transnational level. In this environment, the corporation has taken on a greater societal role. Indeed, according to The British Academy’s influential Future of the Corporation project, the main purpose of business today is “to solve the problems of people and planet profitably”.This paper explores, from a transnational perspective, the transmission of laws and norms that are designed to constrain directors’ conduct and enhance corporate accountability. It focuses on two key examples of such accountability mechanisms —fiduciary duties and corporate codes.The paper begins with a comparative and historical examination of directors’ fiduciary duties in the United States, the United Kingdom and Australia, analyzing the extent to which the transfer of fiduciary law to these common law jurisdictions has resulted in a unified approach to directors’ duties, as is often assumed by studies such as the law matters hypothesis. The paper then moves on to discuss the modern phenomenon of codes, such as corporate governance codes and shareholder stewardship codes. Corporate codes originated in the United Kingdom in the early 1990s, but have subsequently spread throughout the world. The paper explores the global transmission of these codes, which constitute powerful “norm creators”. The rise of corporate codes epitomizes the fact that transnational legal ordering occurs “multi-directionally and recursively up from and down to the national and local levels”. It also demonstrates the importance of “who writes the rules”, because this can affect the substance of those rules and result in significant divergence between national codes.The paper assesses these various developments against the backdrop of convergence and path dependence theories in corporate governance.

Managing Corporate Social and Environmental Disclosure: An Accountability vs. Impression Management Framework

Institutional environment demands from organizations to be accountable for their social and environmental actions and to provide information allowing the assessment of their long-term prospects for profitability may lead organizations to adopt Impression Management (IM) tactics to manage perceptions. Consequently, organizations may provide accounts demonstrating that they are good corporate citizens and possess the intangible assets required for future good financial performance. Although organizations have increased their corporate social reporting, the quality and reliability of those reports have been questioned. The literature suggests that these disclosures tend to be selective and biased, and do not enhance corporate accountability. This study proposes a formal conceptual framework linking IM, social and environmental accountability, financial performance, and organizational legitimacy. The arguments in this study are of economic, societal, and ethical concern, as IM behaviors may undermine the transparency of social and environmental reporting, and the decoupling between the economic and social image offered by companies through reporting and the reality. These insights also point at the complexities for organizations in dealing with accountability to all stakeholders. The conceptual framework proposed is useful for future studies aiming at understanding how organizations use IM in their corporate social reporting in the accountability process.

The Rana Plaza disaster seven years on: Transnational experiments and perhaps a new treaty?

AbstractThis article examines several noteworthy initiatives that were implemented following the deadly 2013 Rana Plaza disaster in Bangladesh. They broke new ground in transnational labour law. The ILO‐backed initiatives were largely successful but remain insufficient to achieve lasting change in the ready‐made garment industry, where global brands’ supply chain buying practices constrain investment in occupational safety and health. A proposed United Nations treaty on business and human rights now seeks to enhance corporate accountability. Although promising, as part of a smart mix of multi‐level public and private solutions, the treaty needs fine‐tuning in the light of lessons learned from post‐Rana Plaza experiments.

Convergent Insights for Sustainable Development and Ethical Cohesion: An Empirical Study on Corporate Governance in Romanian Public Entities

The global financial crisis was decisive in reanalyzing the role of corporate governance based on the accountability and ethics of governance practices and its impact on sustainable development. The study aims to analyze the relevance of and the interdependencies between financial governance assessment indicators and income efficiency with synergetic effects on sustainable development and social cohesion, offering a distinct contemplation on errors in governance and financial reporting. Deviations concerning the accuracy of financial statements, flaws in the process of budget creation and budgetary execution, poor implementation of internal control systems, non-compliance with procedures of public procurement contracts, and ineffectiveness in sound financial management represent barometers for assessing managerial accountability in the public sector. This study is based on data reported by the Romanian Court of Accounts processed with the principal component analysis and proposes a global efficiency index as a benchmark indicator barometer in order to analyze the influence of managerial accountability and sustainable reporting compliance on revenue reported by public institutions in Romania. The results of the study are of empirical importance and explore the constant need to evaluate managerial accountability and ethics, with an emphasis on error, in order to improve public governance and enhance corporate accountability.

Harmonising non-financial reporting regulation in Europe

PurposeMotivated by the new European Union Directive 2014/95 on non-financial and diversity information, this paper aims to develop a future research agenda to conduct pragmatic, theory-oriented research into the Directive and corporate sustainability reporting.Design/methodology/approachDrawing upon the relational dynamics between states, firms and society in regulating non-financial reporting (NFR), this essay frames and analyses the Directive and its grand theories, as unproven theories, by discussing its practical concerns and reviewing the academic literature.FindingsThe Directive is an act of policy to legitimise NFR that encompasses two grand theories: improve the comparability of information and enhance corporate accountability. From a pluralist perspective, companies can rest assure that their compliance with the Directive will be perceived as socially desirable, proper and appropriate. However, some of the forces involved in translating the Directive into actionable policies operate contra to the Directive’s goals and, instead, act as barriers to its grand theories. In addressing these barriers, a research agenda is proposed that both traces backward to re-examine the foundational theories of the past and looks forward to explore alternative possibilities for achieving these goals.Research limitations/implicationsThis paper provides researchers with a practical-driven and theory-oriented agenda for future research in light of the rising academic interest in the Directive.Practical implicationsThe barriers to the Directive’s grand theories help policymakers and practitioners to understand the practical concerns about the implementation of the Directive and other mandatory NFR policies.Originality/valueThis paper enriches the emerging debate on the Directive and highlights future possibilities for fruitful empirical research by developing a research agenda.