Disclosure Of Relationships Research Articles

Identifying Financially Material Content in Corporate Social Responsibility Reports

ABSTRACTThis study examines the relationship between financially material content in corporate social responsibility (CSR) reports and the decision usefulness of these reports. Utilizing sustainability disclosure standards and a machine learning topic modeling algorithm, a firm‐specific quantitative measure of financially material content in CSR reports is developed. It is hypothesized that firms providing greater amounts of financially material CSR content enhance their information environment, which enables analysts to make more accurate earnings predictions. The findings confirm a positive relationship between the extent of financially material CSR content disclosed and analyst forecast accuracy. This research demonstrates the effectiveness of using machine learning to identify financially material content within unstructured voluntary disclosures and contributes to the literature on the financial materiality of CSR activities and their related disclosures.

Efektivitas Ketua Komite Audit dan Kinerja Perusahaan: Peran Moderasi Pengungkapan Keberlanjutan

This study aims to analyze the role of moderation of sustainability disclosure in relation to the effectiveness of the chairman of the audit Committee which consists of accounting expertise, tenure, monitoring expertise, expertise experience of the chairman of the audit Committee on the performance of the company. Through data collection sourced from the IDX website, there are 21 companies with a total of 139 data. This study uses multiple linear regression analysis method. Researchers used the IDX website to collect data, then processed using SPSS version 25.0. Based on the results of the study concluded that the variable accounting expertise of the chairman of the audit committee affect the performance of the company, while the variable tenure of the chairman of the audit committee, monitoring expertise of the chairman of the audit committee, expertise experience of the chairman of the audit committee does not affect the performance of the company. The variable of sustainability disclosure is able to moderate the influence of experience expertise of the chairman of the audit Committee on the performance of the company, while the disclosure of sustainability is not able to moderate the influence of accounting expertise, tenure, monitoring expertise of the chairman of the audit Committee on the performance of the company.

리픽싱 전환사채 발행기업의 회계선택에 관한 사례연구 : 전환권 분류를 중심으로

[Purpose] The purpose of this study is to analyze through actual cases how a company’s accounting choices related to the right to convert refixing convertible bonds subsequently affect its financial statements. [Methodology] Among companies that issued convertible bonds with similar conditions at the same time, the entity classifies convertible bonds into derivative liabilities, capital, and derivative liabilities, respectively, subsequently reclassifies them into capital to confirm from a practical point of view how the accounting treatment of convertible bonds affects financial statements. In particular, considering that the refixing clause is linked to the stock price of the issuing companies, we consider whether the stock price movement was similar when selecting the sample companies to show that it is not an unusual case that appears only in extreme samples. [Findings] If the conversion right is classified as equity, changes in the share price and subsequent accounting for the conversion right do not affect the financial statements, but if it is classified as a liability, it can have a material impact on the statement of comprehensive income, and the impact increases with the size of the convertible bond issued and the change in share price. We also found that the accounting choice for the conversion right can be changed at the discretion of the companies, but it is confirmed that related disclosures is very insufficient. [Implications] The case of this study confirm that accounting for items that are not clearly presented in K－IFRS can cause confusion in the capital market if the accounting treatment is not clearly defined by the relevant authorities. It also suggests that political efforts should be made to ensure that the IASB’s discussion process for revising IAS 32 takes into account the situation in Korea.

Investigating CSR Disclosures and Aggressive Financial Reporting in Relation to Tax Aggressiveness: Can Board Structure Change The Status Quo?

In recent years, academic researchers and policymakers have increasingly discussed the role of Corporate Social Responsibility (CSR) disclosures and aggressive financial reporting in tax aggressiveness. Tax aggressiveness can be defined as a company's eagerness in using legal loopholes and other methods of tax reduction. Companies must evaluate how their tax practices affect their reputation and adhere to tax reporting and CSR standards. The objective of this research is to investigate in the relationship between CSR disclosures and aggressive financial reporting on tax aggressiveness moderated by board structures. The board's internal control function is expected to reduce tax aggressiveness-related risks. The study employed static panel data regression analyses on 665 firm-year data from the Indonesia Stock Exchange from 2016 to 2020. This study discovered that a larger board size could diminish the negative relationship between CSR disclosure and tax aggressiveness in particular industries while strengthening the positive relationship between aggressive financial reporting and tax aggressiveness. The current work suggests that companies with more independent boards of directors could increase the negative association between CSR disclosure and tax aggressiveness while reducing the positive association between aggressive financial reporting and tax aggressiveness. This study could reference future corporate policy regarding the most effective board structures to minimise tax aggressiveness.

Regulatory Oversight of Voluntary SEC Filers

SYNOPSIS Over 1,600 firms exempt from registration requirements have voluntarily filed with the SEC at some point in the last two decades. We investigate whether the SEC scrutinizes these voluntary filings to a similar degree as those submitted by mandatory filers. Our findings suggest a lower likelihood of SEC review for voluntary filers, on average. We identify several factors, however, that help mitigate concerns regarding the overall quality of voluntary filers’ regulatory oversight. First, financial statements and related disclosures are reviewed just as frequently for voluntary filers as for mandatory filers. Second, conditional on a comment letter being issued, the comment letter process is similarly rigorous for both groups. Finally, voluntary filers do not significantly differ from mandatory filers in the likelihood of an accounting restatement. Our results suggest the SEC monitors voluntary filers differently from mandatory filers, but that this monitoring is sufficient to promote comparable financial reporting quality.

Analysing the Firm Value Effects of Environmental, Social and Governance Disclosure: Empirical Study of Indian Firms

The present research aims to analyse the effect of environmental, social and governance (ESG) disclosure on firm value using a sample of Indian-listed firms. The current research adopts cross-sectional regression analysis approach to analyse the financial data of 940 sample firms. The market-to-book value ratio and Tobin’s Q ratio are considered as market value indicators whereas ESG disclosure has been measured as indicator variable from annual report. The results conclude that ESG disclosure has significant positive effect on the market value of the sample firms. Further, the study also analyses the effect of carbon-sensitivity on this relation and found that carbon-sensitive firms experience lower intensity of the positive effect on firm value as compared to others. The findings provide significant implications for managers who can use ESG related disclosures to enhance the firm value. Besides, policymakers can also use the present findings to convey the positive impact of ESG performance and thereby improve the adoption of sustainable and socially desirable business practices. The present study provides pioneering evidence on the firm value effect of ESG disclosure in the context of one of the largest growing economies. The ESG disclosure and firm value nexus has been underexplored in emerging countries, and hence present research adds value to the existing literature.

Risk-oriented approach in audit activity

The paper is devoted to a comprehensive study of the risk-oriented approach in auditing. Based on the analysis of research by foreign and domestic authors, the content of the materiality of audit risk is clarified. Their inextricable relationship in the practical implementation of the risk-oriented approach is shown. The special attention is paid to the application of mathematical calculations to determine materiality and audit risk. The possibilities and main directions of using mathematical calculations for determining materiality and audit risk are shown. Based on the obtained results, it was concluded that mathematical calculations of materiality and audit risk have a relative value and should be submit to the professional skepticism of the auditor. The conducted research is based on the edition of International Standards on Auditing, including ISA 315 "Identifying and Assessing the Risks of Material Misstatement" and ISA 540 "Auditing accounting estimates and related disclosures". The publications provide relevant methodological recommendations for the practical use of a risk-oriented approach in audit activity.

Pengaruh Pengungkapan Tanggung Jawab Sosial dan Lingkungan (TJSL), Pertumbuhan Penjualan, dan Intensitas Modal terhadap Nilai Perusahaan

This research aims to explore the connection between corporate social responsibility (TJSL) disclosure, sales growth, and capital intensity in relation to firm value, incorporating profitability and leverage as control variables. The research takes a quantitative approach, analyzing secondary data and focusing on companies in the consumer non-cyclical sector listed on the Indonesia Stock Exchange from 2018 to 2022. Through purposive sampling, 198 observational samples were gathered between 2018 and 2022. The data analysis, conducted using the SPSS version 29.0 program, involved multiple linear regression analysis. The findings highlight a significant positive impact of capital intensity on firm value. However, corporate social responsibility disclosure and sales growth show no noticeable effect on firm value based on the results of this study.

Does sentiment of investor protection information disclosures affect credit risk premium? Evidence from China

As directly relevant information for bond issuance, bond prospectuses clarify the contents related to investor protection, such as protection mechanisms, debt repayment plans and safeguard measures. The sentiment of these disclosures reflects the issuer’s emphasis on risk management and the investor equity, and is an important reference information for investors to determine risk compensation. This paper selects a sample of 6,048 Chinese corporate bonds from 2006 to 2022 and explores the relationship between the sentiment of investor protection disclosure and bond credit risk premium. The findings indicate that the more negative the sentiment of investor protection related disclosures in the bond prospectus, the higher the credit risk premium for the bond. Further empirical analysis reveals the positive moderating role of credit ratings in this relationship: the positive relationship between the negative sentiment of investor protection disclosures and credit risk premiums is more significant among bonds with higher credit ratings, while it is not significant among bonds with lower ratings. The findings can inform regulatory policy makers in improving market transparency and protecting investors’ interests.

Assessing the Disclosure of Materiality Analysis in Integrated Reports: Evidence from Sri Lanka

The disclosure of materiality analysis in integrated reports demonstrates the genuine intention of business organisations to fulfil stakeholders' information requirements through stakeholder needs and expectations analysis. This study assesses whether the Sri Lankan companies have taken the required initiatives to disclose the materiality analysis in their integrated reports. This research will assess the above concerns with the support of stakeholder and legitimacy theories. Integrated reporting (IR) has opened avenues for increasing the content validity and quality of reports published by companies by providing required guidelines and reporting Standards. Reporting on the materiality analysis is required by the Global Reporting Initiative (GRI) 3 Standard and the International Integrated Reporting Council (IIRC) Framework but remains voluntary. The revised Standard provides guidance on what information the companies are required to disclose, how they have prioritised material topics, and how they have decided the extent of related disclosures. Accordingly, this study will provide insights into the aspect of disclosure of materiality analysis in the annual reports of companies listed in the Colombo Stock Exchange (CSE) by analysing the annual reports of the selected listed companies in the years 2016/17, 2017/18, 2018/19, and 2019/20. A binary disclosure index has been developed to indicate whether the materiality-related disclosures have been mentioned and explained as required. The disclosure index will be quantified and statistically tested to arrive at conclusions regarding the analysis. The study has revealed that there is a growing trend in the disclosure of materiality analysis in the annual reports of the Sri Lankan listed companies. The companies have dedicated a few pages in their annual reports to discuss their materiality analysis process and the key stakeholders. Meanwhile, there is a lack of information on the methods used by the companies to identify their stakeholders. However, they have revealed information on the methods used to identify their material topics to some extent.

Corporate climate risk disclosure: assessing materiality and stakeholder expectations for sustainable value creation

PurposeThis study aims to evaluate the adequacy of climate risk disclosure by providing empirical evidence on whether corporate disclosure meets rising stakeholders’ demand for risk disclosure concerning climate change.Design/methodology/approachDrawing on a triangulated approach for collecting data from multiple sources in a longitudinal study, we perform a panel regression analysis on a sample of multinational firms between 2007 and 2021. Inspired by the Global Reporting Initiative (GRI) principles, our innovative and inclusive model of measuring firm-level climate risks underscores the urgent need to redefine materiality from a broader value creation (rather than only financial) perspective, including the impact on sustainable development.FindingsThe findings of this study provide evidence of limited corporate climate risk disclosure, indicating that organisations have yet to accept the reality of climate-related risks. An additional finding supports the existence of a nexus between higher corporate environmental disclosure and higher corporate resilience to material financial and environmental risks, rather than pervasive sustainability risk disclosure.Practical implicationsWe argue that a mechanical process for climate-related risk disclosure can limit related disclosure variability, risk reporting priority selection, thereby broadening the short-term perspective on financial materiality assessment for disclosure.Social implicationsThis study extends recent literature on the adequacy of corporate risk disclosure, highlighting the importance of disclosing material sustainability risks from the perspectives of different stakeholder groups for long-term success. Corporate management should place climate-related risks at the centre of their disclosure strategies. We argue that reducing the systematic underestimation of climate-related risks and variations in their disclosure practices may require regulations that enhance corporate perceptions and responses to these risks.Originality/valueThis study emphasises the importance of reconceptualising materiality from a multidimensional value creation standpoint, encapsulating financial and sustainable development considerations. This novel model of assessing firm-level climate risk, based on the GRI principles, underscores the necessity of developing a more comprehensive approach to evaluating materiality.

Do people with hereditary cancer syndromes inform their at-risk relatives? A systematic review and meta-analysis.

To evaluate rates of familial disclosure of hereditary cancer syndrome information. A systematic review and meta-analysis was conducted in accordance with PRISMA guidelines (PROSPERO no.: CRD42020134276). Key electronic databases were searched to identify studies evaluating hereditary cancer syndrome cascade relative disclosure. Eligible studies were subjected to meta-analysis. Thirty-four studies met inclusion criteria. Among 11,711 included relatives, 70% (95% CI 60 - 78%) were informed of their risk of carrying a cancer-associated pathogenic variant; of 2,875 relatives informed of their risk who were evaluated for uptake of cascade testing, 43% (95% CI 27 - 61%) completed testing. Rates of disclosure were higher among female vs male relatives (79% [95% CI 73% - 84%] vs 67% [95% CI 57% - 75%]) and first-degree vs second-degree relatives (83% [95% CI 77% - 88%] vs 58% [95% CI 45 - 69%]). Nearly one-third of at-risk relatives remain uninformed of their risk of carrying a cancer-associated pathogenic variant. Even among those informed, fewer than half subsequently complete genetic testing, representing a critical missed opportunity for precision cancer prevention. Five studies evaluating interventions to improve disclosure rates were generally ineffective. Urgent work is needed to elucidate barriers to relative disclosure by probands to develop targeted interventions that can optimize proband-mediated cascade genetic testing rates.

Ukrainian theatre avant-garde in the space of museum communication

The aim of the work is to study the principles of museum communication in the processes of exhibiting works by Ukrainian avant-garde theatre artists of the first third of the 20th century in exhibition projects in Ukraine and Estonia in 2014–2023. The research methodology is based on art historical and cultural analysis. The scientific novelty of the study is related to the evolution of museum communication strategies in their focus on the transmission of national messages in the domestic Ukrainian and international cultural space to reveal the specifics of the codes of Ukrainian identity and rethink the achievements of the Ukrainian avant-garde, including the theatrical avant-garde, from the standpoint of decolonising its perception. In this context, the artistic and intellectual models of the exhibitions «Scene of the Ukrainian Avant-Garde» (Mystetskyi Arsenal, Kyiv, Ukraine, 2014), «Futuromarennia» (Mystetskyi Arsenal, Kyiv, Ukraine, 2021–2022) and «Futuromarennia. Ukraine ja avangard» (KUMU Art Museum, Tallinn, Estonia, 2023) were analysed for the first time. The conclusions state the evolution of communicative models focused on building links between the Ukrainian avant-garde and folk decorative art, the disclosure of inter-artistic relations within the concept of pan-futurism in the space of Ukrainian culture, as well as the presentation of a postcolonial view of the reactivation of the links between Ukrainian and European art in the reflections of avant-garde artists. 
 Keywords: Ukrainian avant-garde, Ukrainian theatrical avant-garde, scenography, theatrical costume, contemporary museum practices, museum communication, visual communication, visual culture.

Changes in SMEs financing: risks and opportunities for agro-food companies

The financial and real crisis started in 2007-2008 has deeply transformed the way the Italian financial and capital market act. Italian SMEs need to be aware of the transformation not to be pushed out of the market itself and to take profit of the new relevant opportunities coming out thanks to the emerging new products and new intermediaries.The paper focuses the disappear of banks relationship lending and provides evidence about how to approach the market in the emerging "competing for capital" prevailing rule.It also stresses the relevance of ESG topics as emerging risk factor companies must look at when asking for new finance because of the Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability related disclosures in the financial services (SFDR).

What are the odds? Poor compliance with UK loot box probability disclosure industry self-regulation.

Loot boxes are purchased in video games to obtain randomised rewards of varying value and are thus psychologically akin to gambling. Disclosing the probabilities of obtaining loot box rewards may reduce overspending, in a similar vein to related disclosure approaches in gambling. Presently, this consumer protection measure has been adopted as law only in the People's Republic of China (PRC). In other countries, the videogaming industry has generally adopted this measure as self-regulation. However, self-regulation conflicts with commercial interests and might not maximally promote public welfare. The loot box prevalence rate amongst the 100 highest-grossing UK iPhone games was 77% in mid-2021. The compliance rate with probability disclosure industry self-regulation was only 64.0%, significantly lower than that of PRC legal regulation (95.6%). In addition, UK games generally made insufficiently prominent and difficult-to-access disclosures both in-game and on the game's official website. Significantly fewer UK games disclosed probabilities on their official websites (21.3%) when compared to 72.5% of PRC games. Only one of 75 UK games (1.3%) adopted the most prominent disclosure format of automatically displaying the probabilities on the in-game purchase page. Policymakers should demand more accountable forms of industry self-regulation or impose direct legal regulation to ensure consumer protection.

European Real Estate Properties Valuation: Ten Years After Adopting IFRS 13

IFRS 13 had its mandatory implementation on January 1st, 2013. The new accounting standard, which represents one step closer to harmonization between U.S. GAAP and IFRS, aims to eliminate inconsistencies in fair value measurement and its related disclosures through the introduction of new reporting requirements, specifically for assets and liabilities with no active markets. Although these demands also encompass information concerning financial instruments, our focus was on the disclosure changes related to the fair value of investment properties, previously regulated solely by IAS 40. As investment properties comprise the majority of assets in the real estate industry, this sector was further examined. Through a statistical analysis of the sample companies’ annual reports for the periods immediately before and after the implementation of IFRS 13, the purpose of our descriptor-explanatory study was to investigate the level of compliance with IFRS 13 fair value disclosure requirements for investment properties in real estate companies in Europe. In order to answer this question, we first scrutinized the level of compliance with the new disclosure requirements brought up by the standard and then, intermediated by an adaptation of the model developed by Beretta & Bozzolan (2008), measured the disclosure quality for both periods considered. After data collection and analysis, our findings reveal that IFRS 13 does affect the disclosure quality of investment properties in real estate companies in Europe. Overall compliance is very high, while disclosure quality has increased since the implementation of IFRS 13. As a way to further broaden the research related to the more extensive disclosure requirements under IFRS 13, we suggest additional studies be undertaken where the point of view of the real estate companies could be explored. Moreover, it would be interesting to investigate whether the increased number of disclosures, both in relation to quantity and quality, is relevant from an analyst’s standpoint. Doi: 10.28991/HIJ-2023-04-03-04 Full Text: PDF

Commentary: Climate‐Related Risks Disclosures in the Notes to Financial Statements: Descriptive Evidence from Australia

AbstractThis paper aims to provide background information about the International Accounting Standards Board's Climate‐Related Risks in the Financial Statements project. Further, we provide some observations of related disclosures in the notes to the 2022 financial statements of the top 75 Australian Securities Exchange‐listed entities. Overall, we find that there has been improvement in the disclosures and considerations of climate‐related risks in the financial statements in recent years. However, the disclosures appear to be generic, which may not meet the needs of financial statement users. We suggest that further research is needed to provide evidence about how such risks are considered and disclosed in the financial statements and whether such information meets user needs. Evidence will help standard setters to consider appropriate action, such as providing educational material or amending the Accounting Standards, to enhance the quality of financial reporting.

온실가스 배출권 재무공시 현황 및 시사점

[Purpose] This study aims at providing the implications and the improvements of the financial disclosure of the carbon emissions and the carbon credits.
 [Methodology] This paper reviews the current financial disclosure of the companies which have large quantities of carbon emissions from accounting users’ perspectives. This study covers financial disclosures, including financial statements and their notes on their annual and quarterly reports.
 [Findings] This paper documents the gaps between the K-GAAP and the current disclosure practice. There is inconsistency between the carbon credits and carbon liabilities. There are wide deviations across companies with respect to the unit price of carbon credit when companies estimate the amounts of their carbon liabilities. The paper also proposes additional disclosure for the carbon liabilities and cost flow assumptions, etc.
 [Implications] Differentiated from the previous literature that is focused on quantitative analysis, this paper reviews the quality of the carbon related disclosures. This study provides proposals that can enhance the usefulness of carbon disclosure to the accounting information users.

Развитие учетной практики применения оценочных значений в фокусе раскрытия отчетной информации о ESG-факторах и рисках

The purpose of the study is to analyze the current practice of determination and disclosing of accounting estimates specifically provisions and contingent liabilities in the financial statements of Russian and foreign companies in the oil and gas, metals and mining and energy industries. As a result of the study, the use of accounting estimates in relation to the disclosure of ESG indicators was analyzed. Th e best practices for their disclosure in relation to financial estimations were identified. Based on the content analysis and comparative analysis of public reports, an industry-specifi c ranking of the disclosure quality was carried out. Th e practical significance of the study lies in the possibility to increase the transparency of corporate reporting for stakeholders through the introduction of best practices of the non-fiancial facts impact in terms of corporate governance.

The impact of student self-disclosure on the stress and wellbeing of tertiary educators during the COVID-19 pandemic

ABSTRACT Workplace stress, burnout, and fatigue are commonplace amongst tertiary educators, and are compounded by the ongoing challenges of teaching and learning during a global pandemic. Amid efforts to identify and understand contributors to educator stress, student-teacher interactions have received relatively little attention. However, educators are often expected to engage in pastoral care when students disclose academic and personal problems. Receiving and responding to self-disclosure can be emotionally taxing, particularly in professional contexts of care, and therefore contribute to educator experiences of stress and burnout. In this study, we examined the relations between student self-disclosure and educator stress and wellbeing during the COVID-19 pandemic in New Zealand. Almost all of the 318 tertiary educators received COVID-19 related disclosures from students. Findings show that educators whose students had shared personal problems during COVID-19 were more likely to report high stress and poor wellbeing.Such communication was also associated with higher rates of workplace presenteeism, suggesting that these teachers were likely to push themselves to a level that risks illness. Fortunately, these negative impacts were ameliorated when educators also reported a sense of support in the workplace. The implications for educators and tertiary institutions are discussed, including the provision of educator training and well-resourced student support services.