European Accounting Review最新文献

{"title":"Disclosure Tone and Short-Selling Pressure: Evidence from Regulation-SHO","authors":"Ankit Jain","doi":"10.1080/09638180.2023.2270655","DOIUrl":"https://doi.org/10.1080/09638180.2023.2270655","url":null,"abstract":"Managers use disclosure tone as a strategic tool to manage investors’ expectations and demand for information. I provide evidence that investors’ actions can, in turn, exercise a disciplining effect on tone management. Using exogenous relaxation in the short-selling constraints from Regulation-SHO and employing the difference-in-differences design on a propensity-score matched sample, I find that short-selling pressure reduces tone management. Greater short- selling pressure results in less optimism in tone unrelated to fundamentals, and in disclosures about the future rather than the past. Moreover, this reduction in tone management is stronger for firms with higher short-selling constraints pre-Regulation-SHO and for those with overoptimistic and overconfident managers.","PeriodicalId":11764,"journal":{"name":"European Accounting Review","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-11-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135818175","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Derivatives Disclosures and Stock Price Informativeness","authors":"Wen-Hsin Chang, Wen-Hsin Hsu","doi":"10.1080/09638180.2023.2260844","DOIUrl":"https://doi.org/10.1080/09638180.2023.2260844","url":null,"abstract":"AbstractThis study examines the effect of SFAS 161, Disclosures about Derivative Instruments and Hedging Activities, on stock price informativeness. FASB issued SFAS 161, effective in 2008, to provide investors with an enhanced understanding of the objectives and implications of firms’ use of derivatives and hedging activities. Our primary goal is to examine whether SFAS 161 facilitates the dissemination of firm-specific information to the market and thus increases stock price informativeness. Using a U.S. sample covering fiscal-years 2001–2018, this study employs a difference-in-difference research design and identifies the treatment group (derivatives users) by conducting a textual analysis of the firm’s derivatives disclosures in the 10-K reports. The results show that for firms that engage in derivatives activities, stock price informativeness increases after the adoption of SFAS 161. We further find that the positive association between SFAS 161 adoption and stock price informativeness is more pronounced for firms with more readable derivatives disclosures. The results suggest that enhanced readability in derivative disclosures play an important role in reducing the information processing costs for investors.Keywords: SFAS 161Stock price informativenessDerivativesReadability Disclosure statementNo potential conflict of interest was reported by the author(s).Notes1 https://www.bis.org/statistics/about_derivatives_stats.htm?m=26392 The FASB has issued the following statements related to the accounting for derivatives: statements No.52, No.80, No.105, No.107, No.119, No.133, No.138, No.139, No.155, and No.161.3 Under SFAS 133, a derivative may be designated as (i) a fair value hedge, a hedge of the exposure to changes in the fair value of a recognized asset or liability, or of an unrecognized firm commitment; (ii) a cash flow hedge, a hedge of the exposure to variability in the cash flows of a recognized asset or liability, or of a forecasted transaction; or (iii) a foreign currency hedge, a hedge of the foreign currency exposure of an unrecognized firm commitment (foreign currency fair value hedge), available-for-sale security (foreign currency fair value hedge), a forecasted transaction (foreign currency cash flow hedge), or net investment in a foreign operation.4 Using a method similar to that of Guay (Citation1999) and Donohoe (Citation2015), the keyword search flagged all annual reports and searched for specific terms over the fiscal years 2004-2013: forward contract, option contract, futures contract, rate swap, swap agreement, currency exchange contract, foreign exchange contract, derivative instrument, and hedging instrument.5 In Eq. (2), we also exclude current, lagged, and lead value-weighted weekly industry returns of financial sectors for a robustness check.6 We also use the 5-year period before adoption and the 5-year period after adoption for robustness tests. The results remain the same.7 In robustness tests, we include industry f","PeriodicalId":11764,"journal":{"name":"European Accounting Review","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-11-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135818448","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"A Measure of Management’s Withholding of Bad News","authors":"Vasiliki Athanasakou, Martin Walker","doi":"10.1080/09638180.2023.2268677","DOIUrl":"https://doi.org/10.1080/09638180.2023.2268677","url":null,"abstract":"We develop a measure of management’s withholding of bad news (NBF – net bad flows) based on the relative lumpiness of negative daily abnormal stock returns in the fiscal period. We present an extensive set of tests that support the construct validity of NBF as a measure of management’s bad news withholding. Being calculable for listed companies using daily stock return data, NBF can complement direct scores of corporate disclosures when assessing the overall quality of corporate financial communication. We also compare the properties of NBF with the properties of measures of stock price crash risk. We find that NBF outperforms traditional crash risk measures in capturing bad news withholding. Re-estimating the crash risk measures using daily instead of weekly stock returns yields more powerful proxies for bad news withholding that are more closely related to NBF.","PeriodicalId":11764,"journal":{"name":"European Accounting Review","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135271200","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Accounting Accruals, Audit Quality, and Audit Pricing","authors":"Sebastian Kronenberger","doi":"10.1080/09638180.2023.2270002","DOIUrl":"https://doi.org/10.1080/09638180.2023.2270002","url":null,"abstract":"AbstractThis study examines the impact of the interaction between firms' accounting choices and auditors' audit effort choices on audit pricing. In a multi-period model, I focus on a central feature of accounting: reversing accruals. I find that initial low-balling, defined as lower audit fees than audit costs, arises independently from the direction of accruals, but increases with more conservatism in the first engagement period. The reason is that a conservative accruals strategy implies understated earnings today and overstated earnings in the future, which creates a higher investor demand for auditing services in future periods. The incumbent auditor can satisfy this future demand better than any competitor, because the first-period learning cost is sunk. Thus, conservatism enhances the competitive advantage of the incumbent and increases the future quasi-rent, which is used for a higher initial low-balling discount. I further show implications of the auditor-firm interaction for fee-cutting, a common proxy for low-balling, and the frequency of modified audit opinions, a common proxy for audit quality. Thus, my model provides a theoretical foundation for the connection between high low-balling discounts, accounting accruals, and audit quality.Keywords: Low-ballingFee-cuttingAudit qualityAccounting accruals AcknowledgmentsAccepted by Robert F. Göx. I thank Christopher Bleibtreu, Ralf Ewert, Qi Gao, Yasmin Hoffmann, Bill Kinney, Thomas Kourouxous, Sandra K. Kronenberger, Peter Krenn, Volker Laux, Paul Newman, Elisabeth Plietzsch, Stefan Schantl, Thomas Simon, Dirk Simons, Alfred Wagenhofer, Anna Waldner, and participants of the 12th Workshop on Accounting and Economics in Tilburg, the 39th EAA Annual Congress in Maastricht, the 83th VHB Annual Congress, the 12th EARNet Symposium Komma and seminar participants at the University of Magdeburg for helpful comments. I acknowledge funding from the Austrian Science Fond (FWF), Project W 1229.Disclosure statementNo potential conflict of interest was reported by the author(s).Notes1 Over the total time period, the auditor never earns rent because it is used to attract the engagement in the first period. Therefore, it is called quasi-rent.2 See also Kanodia and Mukherji (Citation1994), Lee and Gu (Citation1998), Chan (Citation1999), Zhang (Citation1999), and Simons (Citation2011).3 See also Göx and Wagenhofer (Citation2009, Citation2010), Nan and Wen (Citation2014), and Caskey and Laux (Citation2017).4 Further studies include Gul et al. (Citation2009), Ghosh and Lustgarten (Citation2006) and Ettredge and Greenberg (Citation1990).5 In addition, Barua et al. (Citation2020) provide evidence that audit fee studies are often subject to a systematic bias because only the succeeding auditor's fee must be mandatorily disclosed. The study shows that the fee discount often disappears after adjusting for the bias.6 To economize on notation, I drop the time index on the economic state, the accounting signal, and the","PeriodicalId":11764,"journal":{"name":"European Accounting Review","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-10-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135366952","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Work from Home Suitability and Credit Risk Assessment","authors":"Harvey Nguyen, Mia Hang Pham, Cameron Truong","doi":"10.1080/09638180.2023.2239865","DOIUrl":"https://doi.org/10.1080/09638180.2023.2239865","url":null,"abstract":"Employing firm-level work from home (WFH) suitability derived from the U.S. universe job postings, we investigate whether rating agencies and debt holders incorporate WFH suitability in their risk assessments. We document that firms with higher WFH suitability have higher credit ratings and lower costs of debt. Our results are robust to different fixed effect estimations, sampling methods, and controls. We identify two ways that WFH suitability translates into higher credit ratings: high WFH suitability is associated with lower future cash flow volatility and lower default risk. Overall, our study suggests that WFH suitability is an important determinant of credit risk assessments and that firms should see flexible work arrangements as an effective strategy in their crisis management planning.","PeriodicalId":11764,"journal":{"name":"European Accounting Review","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-09-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135195341","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Environmental Accounting in the <i>European Accounting Review</i>: A Reflection","authors":"Jan Bebbington, Matias Laine, Carlos Larrinaga, Giovanna Michelon","doi":"10.1080/09638180.2023.2254351","DOIUrl":"https://doi.org/10.1080/09638180.2023.2254351","url":null,"abstract":"We reflect upon how European Accounting Review has conceived of environmental accounting (and to some extent social/sustainability accounting work) over its 30-year history, with the aim of discussing ways in which environmental accounting research can further develop, both within and beyond this journal. After outlining the broader social and ecological context from which environmental accounting has emerged (and noting that this context is evolving in substantive ways), we provide an overview of the types of research published in EAR. We combine these elements to identify three themes that we argue are critical for the direction of future research: the financial materiality of ecological issues and the impact this has on risk; how environmental accounting practices are constructed; and how a new relationship between nature and society may affect accounting practices. We finally conclude by envisioning a future of environmental accounting research that dovetails with the sustainability ambitions that can be draw from an examination of the detailed targets that underpin the Sustainable Development Goals.","PeriodicalId":11764,"journal":{"name":"European Accounting Review","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-09-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134911301","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"The Spillover of U.S. Regulatory Oversight to Foreign Markets: Evidence from the Effect of PCAOB International Inspections on Executive Compensations","authors":"Chang He, Lixin (Nancy) Su, Zheng Wang, X. Zhu","doi":"10.1080/09638180.2023.2252022","DOIUrl":"https://doi.org/10.1080/09638180.2023.2252022","url":null,"abstract":"We examine the spillover effect of the Public Company Accounting Oversight Board (PCAOB) international inspection program on improving the contracting role of accounting numbers in executive compensations in an international setting. For a sample of non-U.S.-listed foreign public firms with PCAOB-inspected foreign auditors, we find a significant increase in the sensitivity of their executive cash compensations to earnings after the release of the first inspection reports on their auditors by the PCAOB, relative to those without PCAOB-inspected foreign auditors. Such a result suggests that the compensation committees of firms with PCAOBinspected auditors infer that the quality of earnings as a performance measure for determining executive compensations improves due to the PCAOB’s inspections of their auditors. We also find that a clean inspection report issued to the firm’s auditor has an incremental effect on increasing earnings pay-for-performance sensitivity. Our findings provide novel evidence on the effectiveness of U.S. regulatory oversight in foreign markets and should interest the PCAOB and local audit regulators around the world.","PeriodicalId":11764,"journal":{"name":"European Accounting Review","volume":null,"pages":null},"PeriodicalIF":3.3,"publicationDate":"2023-09-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"78425391","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Accounting Bias and Debt Contracting","authors":"Tong Lu, Ziyun Yang, Lanyi Yan Zhang","doi":"10.1080/09638180.2023.2248620","DOIUrl":"https://doi.org/10.1080/09638180.2023.2248620","url":null,"abstract":"AbstractThis study investigates the effects of accounting bias on the efficiency of a debt-financed investment, which is subject to an interim liquidation/continuation decision based on the accounting report. We decompose the overall effect of accounting bias into a mean effect and a variance effect and transform binary state and report spaces into continuous ones. We derive two main results. (1) The highest investment efficiency is induced by a downward bias for gloomy investment prospects and an upward bias for rosy investment prospects. (2) The optimal covenant tightness is U-shaped and the optimal interest rate is hump-shaped in the degree of bias. In particular, neutral (unbiased) accounting neither minimizes the variance of the report nor maximizes investment efficiency.Keywords: NeutralityBiasInvestment efficiencyCovenant tightnessInterest rate AcknowledgmentsWe wish to acknowledge the helpful comments of Robert Göx (the editor) and two anonymous referees whose suggestions led to a much better manuscript. We have also benefitted from helpful comments of participants at the 2022 AAA Midwest Region Meeting and the 2023 AAA FARS Midyear Meeting.Disclosure statementNo potential conflict of interest was reported by the author(s).Supplemental DataSupplemental data for this article can be accessed online at http://dx.doi.org/10.1080/09638180.2023.2248620.Data AvailabilityAll data are from publicly available sources identified in the study.Notes1 The first approach is adopted by Gigler and Hemmer (Citation2001), Venugopalan (Citation2001), Chen et al. (Citation2007), Suijs (Citation2008), Gigler et al. (Citation2009), Göx and Wagenhofer (Citation2010), Drymiotes and Hemmer (Citation2013), Gao (Citation2013), Li (Citation2013), Nan and Wen (Citation2014), Bertomeu and Cheynel (Citation2015), Armstrong et al. (Citation2016), Callen et al. (Citation2016), Jiang (Citation2016), Bertomeu et al. (Citation2017), Caskey and Laux (Citation2017), Jiang and Yang (Citation2017), Lu et al. (Citation2018), and Dordzhieva et al. (Citation2022), among others. The second approach is adopted by Guay and Verrecchia (Citation2006), Burkhardt and Strausz (Citation2009), Gow (Citation2009), Göx and Wagenhofer (Citation2009), Caskey and Hughes (Citation2012), and Beyer (Citation2013), among others. In a different strand, Kwon et al. (Citation2001), Fan and Zhang (Citation2012), and Jiang and Yang (Citation2021) use a binary partition of a state space to represent the degree of bias.2 See Burkhardt and Strausz (Citation2009), Caskey and Hughes (Citation2012), Beyer (Citation2013), Gao (Citation2013), Li (Citation2013), Callen et al. (Citation2016), Jiang (Citation2016), Bertomeu et al. (Citation2017), and Jiang and Yang (Citation2021), among others.3 We can generalize this assumption as Pr(αθ≥t)×v+Pr(αθ<t)×0>m, where the success/failure threshold is t≤E[αθ]. Our main result (Proposition 3) holds qualitatively in this general case. Results are available on the online appe","PeriodicalId":11764,"journal":{"name":"European Accounting Review","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2023-08-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"136118687","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Economists’ Political Donations and GDP Forecast Accuracy","authors":"Andrea Bafundi, C. Imperatore","doi":"10.1080/09638180.2023.2248181","DOIUrl":"https://doi.org/10.1080/09638180.2023.2248181","url":null,"abstract":"","PeriodicalId":11764,"journal":{"name":"European Accounting Review","volume":null,"pages":null},"PeriodicalIF":3.3,"publicationDate":"2023-08-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"85930843","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Credibility Signals from Soft Information: Evidence from Investor Reactions to Tone in Earnings Conference Calls","authors":"Jane Hennig, Sebastian Firk, Michael Wolff","doi":"10.1080/09638180.2023.2244009","DOIUrl":"https://doi.org/10.1080/09638180.2023.2244009","url":null,"abstract":"","PeriodicalId":11764,"journal":{"name":"European Accounting Review","volume":null,"pages":null},"PeriodicalIF":3.3,"publicationDate":"2023-08-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"79961721","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}