Quality Of Accounting Information Research Articles

Noncontrolling shareholders' network centrality and corporate earnings management: Governance or conspiracy?

Corporate governance is undermined by the tunneling of controlling shareholders. Social networks play a positive role in corporate governance; hence, the question is whether noncontrolling shareholders can take advantage of their network position to participate in corporate governance and subsequently influence earnings management. Our findings indicate that noncontrolling shareholders' network centrality can impede positive accrual-based earnings management and primarily functions as a governance mechanism via external governance. Also influencing the relationship between positive accrual-based earnings management and noncontrolling shareholders' network centrality are the religious culture in different regions and the nature of corporate property rights. Our study contributes to the debate about the role of noncontrolling shareholders by providing direct evidence that the network centrality of noncontrolling shareholders plays an active role in enhancing corporate governance and accounting information quality.

Mixed ownership reform and non-state-owned enterprise innovation: Evidence from China

PurposeThis study examines the impact of China’s mixed-ownership reform on the innovation of non-state-owned acquirers, with a particular focus on the impact on firms with high financing constraints, low-quality accounting information or less tangible assets.Design/methodology/approachWe use a proprietary dataset of firms listed on the Shanghai and Shenzhen Stock Exchanges to investigate the impact of mixed ownership reform on non-state-owned enterprise (non-SOE) innovation. We employ regression analysis to examine the association between mixed ownership reform and firm innovation.FindingsThe study finds that non-state-owned firms can improve innovation by acquiring equity in state-owned enterprises (SOEs) under the reform. Eased financing constraints, lowered financing costs, better access to tax incentives or government subsidies, lowered agency costs, better accounting information quality and more credit loans are underlying the impact. Additionally, cross-ownership connections amongst non-SOE executives and government intervention strengthen the impact, whilst regional marketisation weakens it.Originality/valueThis study adds to the literature on the association between mixed ownership reform and firm innovation by focussing on the conditions under which this impact is stronger. It also sheds light on the policy implications for SOE reforms in emerging economies.

Relative strength of business groups and the value-relevance of earnings for group-affiliated companies

This paper investigates the value-relevance of group-affiliated companies using a sample of Chinese private listed companies. We find that the value-relevance of earnings for the affiliated companies is negatively related to the relative strength of the business groups, and a higher operating risk of the affiliated companies may weaken the negative relationship. Moreover, a stronger relative strength of the business groups may reduce the likelihood of the affiliated companies’ future stock price crashes. Overall, our results suggest that low value-relevance of earnings for group-affiliated companies may not be indicative of low accounting information quality.

Green finance and the relationship with goodwill: A study based on the perspectives of accounting information quality and financing constraints

This paper uses data from Chinese listed companies between 2007 and 2020, obtaining a sample of 28,513 valid A-share listed companies. Various regression tests are employed to verify the relationship between green finance and corporate goodwill. Additionally, robustness tests, including the substitution of key variables, narrowing the time window, and introducing a one-period lag for the independent variable, consistently show a positive relationship. Based on these findings, the paper concludes that the development of green finance enhances the goodwill value of enterprises. Furthermore, the study reveals that the development of green finance improves the accounting information quality of enterprises, reduces financing constraints, and subsequently enhances the goodwill value of companies. Presently, there is a scarcity of research examining the correlation between green finance and corporate goodwill value. This study provides a valuable supplement to understanding the impact of green finance development on corporate behavior and holds significance in research.

Social trust and the cost of equity

Social trust is the result and reflection of repeated games between individuals. Is social trust capable of optimizing enterprises’ financing modes? The following results are obtained. (1) The greater the regional social trust level, the lower the cost of equity. (2) Social trust plays a larger role in lowering the cost of equity in state-owned enterprises and enterprises located in regions with strong rule of law. By improving accounting information quality, social trust can reduce investor information risk, thus lowering equity costs.

Does Executives’ Compensation Stickiness Encourage Environmental Investments? An Environmental Attention-Based Perspective

ABSTRACT This study explores the influence of executives’ compensation stickiness (ECS) on environmental investments in Chinese heavily polluting enterprises from 2009 to 2021. We find that ECS increases environmental investments by enhancing executives’ environmental attention. This positive impact is more significant in non-state-owned enterprises compared to state-owned enterprises (SOEs) and is more pronounced in companies with weaker local environmental supervision, lower local environmental investments, and less media supervision. Moreover, ECS enhances accounting information quality following environmental investments and also promotes the improvement of environmental performance and corporate value after such investments.

An Investigation of Antecedents and Outcomes of Accounting Information Quality: Evidence from SMEs

This article aims to scrutinize the antecedents and outcomes of accounting information quality (AIQ) of small- and medium-sized enterprises (SMEs) in the developing country of Vietnam. Based on the perspectives of agency theory and contingency theory, accounting information system quality (AISQ) has been considered as the main antecedent factor, and firm performance (FIP) is examined as the outcome in this article. We additionally examine the mediating role of AISQ in the context of information technology risks (ITR)–AIQ nexus. Furthermore, the moderating role of transformational leadership (TL) was considered in the context of the AISQ–AIQ nexus, and the AIQ–FIP nexus, respectively. Using the quantitative research methods with rigorous testing to determine the most accurate results and ensure reliability, this article concludes that the ITR have an appreciable influence on AISQ, and the AISQ has an appreciable favourable impact on AIQ. Additionally, the AIQ has an appreciable impact on FIP in the context of Vietnamese SMEs, and at the same time, AIQ positively mediates the AISQ–FIP nexus. Lastly, TL positively moderates the AIQ–FIP nexus.

Influence of the financial shared service center on the quality of accounting information

Purpose This research endeavors to assess the influence of financial shared service centers (FSSCs) on the quality of accounting information within China’s A-share listed companies. Using a multi-period difference-in-differences (DID) model, the study aims to empirically examine the correlation between the adoption of FSSCs and the quality of accounting information. Design/methodology/approach The study uses a robust methodology to evaluate the relationship between FSSCs and accounting information quality (AIQ). Leveraging the established FSSCs within China’s A-share listed companies as the treatment group, this research adopts a multi-period DID model. This approach enables a rigorous empirical examination of the influence exerted by FSSCs on the overall quality of accounting information. Findings The present study delves into the impact of FSSCs on AIQ and conducts empirical analysis using data from Chinese A-share listed companies between 2004 and 2021. The findings substantiate that: FSSCs significantly bolster the quality of accounting information, a conclusion retained even after robustness tests. Specifically, FSSCs exhibit a positive correlation with the comparability, timeliness and disclosure quality of accounting information while demonstrating no significant influence on relevance, robustness and reliability factors. Research limitations/implications First, the analysis primarily rests upon data from Chinese A-share listed companies between 2004 and 2021, potentially constraining the generalizability of findings across diverse contexts. Second, despite controlling for various factors, unobserved variables or external factors not encompassed in the model might influence the relationship between FSSCs and AIQ. Additionally, the study’s reliance solely on quantitative data confines exploration into qualitative aspects that might offer a more comprehensive understanding of FSSCs’ impact on AIQ. Practical implications This paper establishes a nuanced connection between FSSC operations and AIQ, furnishing direct empirical evidence for their economic implications and propounding a novel avenue for augmenting AIQ. And, it furnishes guidance for forthcoming FSSC development, accentuating the necessity of harnessing information technology to enhance the relevance, reliability and robustness of accounting information. Originality/value Majority of prior empirical studies assessing AIQ have focused on singular indicators, lacking a comprehensive depiction of its overall level. To address this gap, this paper pioneers the construction of a comprehensive index for AIQ, providing a holistic representation of its level. Furthermore, this study stands as the inaugural investigation into the relationship between China’s A-share listed firms’ FSSCs and the quality of accounting information.

Costos de agencia y conservadurismo condicional de empresas públicas en la industria eléctrica brasileña

Introduction / objective: In organisations, conflicts of interest give rise to agency costs aimed at mitigating agent opportunism. High-quality accounting information reduces these conflicts by minimising information asymmetry. Consequently, this study aims to investigate the relationship between agency costs and conditional conservatism in Brazilian electric power industry companies listed on the B3. Methodology: Data from 21 Brazilian electric power industry companies for the period 2012 to 2020 were utilised. Twenty-four attributes associated with agency costs were analysed, and Ball and Shivakumar’s (2005) conditional conservatism model was employed as a measure of accounting information quality. Panel data regression models were used to obtain the results. Results: According to the central conditional conservatism model, companies tend to exhibit optimism rather than conservatism, anticipating gains instead of losses. Results, assessed across five dimensions, revealed that factors such as board composition, variable compensation, and agreements with shareholders reduce optimism, while qualified audits, longer tenures, and the presence of a permanent audit committee increase optimism. Therefore, attributes that influence optimism, accounting information neutrality, and consequently, financial reporting quality, are identified. Conclusions: This study benefits various users of accounting information. Investors can pinpoint governance policies that align interests, regulators can enhance oversight, and organisation members can adopt policies that encourage the alignment of interests between principals and agents.

The IFRS 16 implementation in Asia-Pacific countries: enhancing asset pronouncements or opaque information’s conveyance

PurposeThe purpose of this study is to investigate the implementation of International Financial Reporting Standard (IFRS) 16 in developing countries to enhance asset pronouncements or the quality of opaque accounting information for listed firms’ leasing transactions.Design/methodology/approachThis study designed ordinary least square (OLS) regression models to examine the hypotheses in two ordered tests. The first-order test ascertained the association between fundamental accounting information and earnings or stock prices. Then, the second-order test was nested to add the instrument variable to the first-order one. In addition, the researchers selected 17 Asia-Pacific countries.FindingsFirst, this study contributes to the fair value of firms’ asset measurements, and the accounting discipline requires adaptive scalability to produce future potential cash flows. Second, it reduces literature gaps between the pros and cons of the opaqueness of assets. In addition, these research arguments would be the referee for reducing information’s opacity. Finally, this study demonstrates the impact of IFRS 16’s implementation on firms’ conservatism levels and entropy’s information quality, requiring the regulators to accommodate these issues.Originality/valueDue to the implementation of IFRS 16, the authors are neutral about the impacted financial statements and political consequences for these Asia-Pacific listed firms and countries. First, we propose the uniqueness of problematic elaboration since implementing IFRS 16 results in a more pronounced or opaque information quality due to vulnerable complexities in the financial statements. Second, this implementation is associated with hierarchical information and conservatism, producing accounting information entropy or negentropy. However, the hierarchy theory suggests various levels of conservatism that could increase or decrease the information’s quality.

Accounting conservatism, accounting measurement, social capital disclosure, quality of accounting information: The moderating role of corporate social responsibility

The paper aims to investigate the direct impact of accounting measurement, Social Capital Disclosure (SCD), and Accounting Conservatism (AC) on the Quality of Accounting Information (QAI), focusing on consistency in the context of Corporate Social Responsibility (CSR). The study involves industrial companies in the Yemeni capital, Sana’a. Hypotheses are developed and tested through the collected data from a questionnaire distributed to 178 employees. Results indicate a positive impact of accounting measurement, SCD, and AC on the quality and reliability of accounting information. However, when considering CSR as a moderating variable, these factors do not show a significant positive effect. The study is limited to industrial companies in Sana’a, and broader implications may require consideration of various other sectors.

The effect of corporate social responsibility dimensions on accounting information quality: Empirical study in Saudia Arabia

Accounting studies neglected to link corporate social responsibility to accounting information, the theoretical background revealed the study gap and the paper referred to it in the question: Do the corporate social responsibility CSR dimensions affect the accounting information quality? The study aimed to reveal the effect of corporate social responsibility dimensions (economic, ethical, legal, and philanthropic) on accounting information quality (relevance and reliability) in banks in the Riyadh Governorate in Saudi Arabia. The researcher used a questionnaire to collect data from the study sample, and the data analysis was done using SPSS and smart partial least squares (pls), and its reliability and validity have been confirmed. Result revealed a positive effect of CSR (economic, ethical) dimension on the relevance of accounting information, a negative effect of CSR Legal dimension on the relevance of accounting information, and no effect of CSR philanthropic dimension on the relevance of accounting information, a positive effect of CSR (ethical, philanthropic) dimension on the reliability of accounting information and no effect of CSR economic and legal dimension on the reliability of accounting information.

The effect of cloud computing on accounting information quality: Empirical study in Saudia Arabia

The effect of cloud computing on accounting information quality: Empirical study in Saudia Arabia

Competitive Shocks and Firm Productivity: The Role of Accounting Information Quality

Competitive Shocks and Firm Productivity: The Role of Accounting Information Quality

تأثير مسؤوليات مجلس الإدارة على جودة المعلومات المحاسبية (The Effect of the Responsibilities of the Board of Directors, on the Quality of Accounting Information)

Based on the world's crises over the last two decades, international bodies have sought to establish rules that govern commercial banks' standards of control and supervision. Although the banking sector is the backbone of economic life, governance has evolved over the last decade to include more transparency in management and regulate the relationship between the company's parties. Furthermore, to achieve a high level of quality in these reports, more trust should be placed in the information in these companies' financial reports. The problem statement addresses the effect of applying corporate governance standards of the responsibilities of the board of directors on the performance of Libyan commercial banks. The study aims to determine the effect of this standard's implementation on the quality of accounting information in Libyan commercial banks. In order to achieve the study's objectives, the questionnaire was used to collect data and assess the impact of applying standards of the responsibilities of the board of directors of corporate governance on the quality of accounting information. The Organization for Economic Cooperation and Development criterion was used as an independent variable, standards of the responsibilities of the board of directors, to measure it on the dependent variable (the quality of accounting information in banks). The study sample included several members of the board of directors, non-auditors, internal auditors, accountants and heads of departments in some branches of Libyan commercial banks. The descriptive approach was used in the analysis using the SPSS program. The study concluded that this governance standard positively impacts Libyan commercial banks' accounting information quality. However, this result was strong in the responsibilities of the board of directors on the quality of accounting information, in contrast to this study's standards and to previous studies. Comparing earlier research, it was found that the environment in which Libyan banks operate is different from that of these studies because Libyan banks confront a variety of hazards, including those related to the environment, the economy, politics, and security. The study also recommended that: the Central Bank should verify the banks' implementation of the Governance Guide issued by the Central Bank of Libya. Banks must have a guide to corporate governance principles and a committee responsible for ensuring compliance with the practice of these principles.

Research on Influencing Factors of Accounting Information Quality in the Digital Era

Research on Influencing Factors of Accounting Information Quality in the Digital Era

Corporate ESG Performance and Accounting Information Quality

This paper empirically examines the impact of ESG rating performance on the quality of corporate accounting information with 10015 listed companies in China's A-share market from 2012 to 2021. The results show that the better the ESG rating performance, the lower the level of real surplus management and the higher the quality of accounting information. Mechanism analysis shows that corporate ESG performance improves accounting information quality by reducing financing constraints and reducing information asymmetry. Heterogeneity analysis finds that the contribution of corporate ESG performance to accounting information quality is more significant in non-state-owned enterprises, non-polluting industry enterprises, enterprises in the eastern region. The research in this paper reveals the promotion effect of ESG on accounting information quality and provides a reference for the research on ESG in China.

Determining Factors for Enhancing Accounting Information Quality in Public Service Agencies

This research examines whether personnel competency, information technology (IT) utilization and government accounting standard (GAS) proficiency have influenced accounting information quality and internal control as moderates in public service agencies (PSA). We performed a quantitative method and collected data by questionnaires. We distributed The questionnaires to the chief or head of public services agencies and their financial and accounting department staff in Surabaya as Population. Despite the minimum number based on Slovin being 80, the total number of collected samples for this study is 100. SEM-PLS conducted a hypotheses test. There are three research findings: (1) IT utilization and GAS proficiency are positively significant toward accounting information quality; (2) Internal control is supported as a moderating variable, positively significant to the relationship between personnel competencies and accounting information quality. These findings imply that IT infrastructure has to be well maintained and updated to assure accounting data reliability. Public service agencies need government accounting standard expertise by hiring experts, consultants, or well-trained accounting department personnel. Finally, to enhance the accounting information systems' quality, internal control is also an essential factor in ensuring that all components in the accounting system are running well. Keywords: Accounting Information Systems, Government Accounting Standards Proficiency, Information Technology Utilization, Internal Control, Personnel Competencies Abstrak Penelitian ini bertujuan untuk menguji peran kompetensi pegawai, penggunaan teknologi informasi (TI), dan pemahaman standar akuntansi pemerintahan (SAP) dalam memengaruhi kualitas informasi akuntansi dengan pengendalian internal sebagai variabel moderasi di Badan Layanan Umum (BLU). Data dikumpulkan menggunakan kuesioner. Kuesioner didistribusikan kepada kepala BLU, serta pegawai bagian akuntansi dan keuangan di wilayah kota Surabaya sebagai populasi. Total kuesioner yang dapat diolah adalah sejumlah 100. Jumlah ini telah memenuhi syarat pengolahan data karena melebihi 80 (jumlah minimum sampel berdasarkan perhitungan slovin). Hipotesis diuji dengan SEM-PLS. Hasil riset ini menemukan bahwa : (1) penggunaan TI dan pemahaman SAP berpengaruh signifikan positif terhadap kualitas informasi akuntansi; dan (2) Pengendalian internal terbukti signifikan memoderasi pengaruh kompetensi sumber daya manusia dan kualitas informasi akuntansi. Dengan demikian, BLU perlu menjaga dan memperbarui infrastruktur TI agar dapat memelihara reliabilitas data dan proses akuntansi, mempekerjakan tenaga ahli yang memahami SAP baik dengan cara melatih pegawai atau bersama konsultan SAP. Pengendalian internal di BLU juga penting diterapkan untuk memastikan bahwa sistem akuntansi berjalan dengan lancar. Kata Kunci: Sistem Informasi Akuntansi, Pemahaman Standar Akutansi Pemerintahan, Pemanfaatan Teknologi Informasi, Pengendalian Internal, Kompetensi Sumber Daya Manusia

Earnings quality and board meeting frequency

We propose that corporate directors are in greater need of soft information about the firm when the quality of hard accounting information is low. We further propose that board meetings constitute a key opportunity for corporate directors to gather soft information about the firm, and empirically investigate the relationship between financial reporting quality and the board's soft information gathering, as revealed by board meeting frequency. Consistent with expectations, we find that boards meet more frequently when accruals quality is low. We further find that the proportion of outside directors, insider ownership, and SOX regulation moderate this relationship. The evidence is reinforced by analysis of management earnings forecasts, financial restatements, and internal control weaknesses and is robust to several alternative earnings quality specifications. Additional empirical tests suggest that our results are incremental to the alternative explanation of increased meeting frequency to address problems in the reporting process per se. We conclude that corporate directors seek more frequent board meetings as an alternative information source to low earnings quality.

Analysis of the Effect of Accounting Information Quality, Institutional Ownership, and Financial Performance on Capital Market Reaction: A Case Study on Company XYZ on the Indonesia Stock Exchange

This research investigates the interplay between accounting information quality, institutional ownership, financial performance, and capital market reactions within the context of the Indonesia Stock Exchange (IDX). Employing Structural Equation Modeling with Partial Least Squares (SEM-PLS), a diverse sample of IDX-listed companies spanning various sectors, sizes, and leverage levels was analyzed. The measurement model assessment confirmed the reliability and validity of selected indicators, while the structural model revealed significant positive relationships between accounting information quality and institutional ownership with capital market reactions. Surprisingly, financial performance did not show a direct impact on market reactions. The model exhibited a good fit, explaining 60.2% of the variance in capital market reactions. Implications for investors and corporate decision-makers are discussed, emphasizing the strategic importance of transparent reporting and attracting institutional investors. Limitations include cross-sectional data and potential endogeneity concerns. This research contributes to the understanding of market dynamics in the Indonesian context and suggests avenues for future exploration.