Journal of Financial Reporting and Accounting最新文献

{"title":"Governance for a greener Europe: audit committee and carbon emission","authors":"Rasmi Meqbel, Aladdin Dwekat, Mohammad A.A. Zaid, Mohammad Alta’any, Asia Mohammad Abukhaled","doi":"10.1108/jfra-10-2024-0719","DOIUrl":"https://doi.org/10.1108/jfra-10-2024-0719","url":null,"abstract":"Purpose This study aims to examine the impact of Audit Committee (AC) characteristics on carbon disclosures and performance among companies listed in the STOXX Europe 600 index. Design/methodology/approach The sample consists of companies listed in the STOXX Europe 600 index over a 11-year period (2012–2022). The study uses panel data regression methods and uses the two-step system generalized method of moments to control for endogeneity. Findings The results indicate that AC size, independence and financial expertise positively influence carbon disclosure, highlighting the significance of these characteristics in promoting transparency and accountability in reporting carbon emissions. Additionally, these attributes are significantly associated with improved carbon performance, suggesting their potential role in advancing environmental sustainability. Practical implications The study provides practical insights for policymakers and regulatory bodies aiming to enhance carbon-related practices through improved corporate governance (CG) structures. By emphasizing the importance of specific AC characteristics, the findings suggest pathways for enhancing the quality of carbon disclosures and performance. Originality/value Despite extensive attention on CG in promoting sustainability, the specific influence of AC characteristics on carbon disclosures and performance remains underexplored. This study addresses this significant literature gap and, to the best of the authors’ knowledge, is the first to link AC characteristics with both carbon disclosure and performance. It enriches the current body of knowledge in agency theory and provides critical insights for developing CG and regulatory policies that enhance the quality of carbon disclosures.","PeriodicalId":15826,"journal":{"name":"Journal of Financial Reporting and Accounting","volume":"24 3","pages":"1281-1311"},"PeriodicalIF":0.0,"publicationDate":"2025-02-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"147885807","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Can effective board drive environmental innovation? The moderating power of CSR committee","authors":"Muiz Abu Alia, Aladdin Dwekat, Rasmi Meqbel, Tayf Hannoun, Imtiyaz Shakhshir, Aya Naser","doi":"10.1108/jfra-05-2024-0280","DOIUrl":"https://doi.org/10.1108/jfra-05-2024-0280","url":null,"abstract":"Purpose This study aims to investigate the impact of various board characteristics on environmental innovation (EI) among companies listed on the STOXX Europe 600. It also examines the moderating role of CSR committees on the board–EI nexus. Design/methodology/approach The sample consists of companies listed on the STOXX Europe 600 index over 12 years (2011–2022). This study uses the Refinitiv Eikon database to evaluate the extent of EI. Panel data regression analysis is used, with two-stage least squares and lagged models used as robustness tests to control for endogeneity. Findings The results indicate that board independence and gender diversity significantly increase EI, whereas CEO duality negatively impacts it. Other board attributes, such as board size, show no impact on EI. In addition, the presence of CSR committees moderates these relationships, enhancing the positive effects of gender diversity and board independence and mitigating the negative impact of CEO duality. Practical implications This study provides valuable insights for policymakers and corporate strategists aiming to advance environmental responsiveness through strategic board composition and establishing CSR committees. Emphasizing the importance of board independence, gender diversity and CSR committees, the findings suggest practical pathways for enhancing the adoption of EI by creating governance structures that support sustainable practices. Originality/value To the best of the authors’ knowledge, this is the first study to examine the moderating role of CSR committees on the associations between board characteristics and EI. This research addresses a crucial gap in the current literature, enriching the understanding of corporate governance and sustainability. It provides critical insights for developing policies and strategies that promote EI through effective board composition and the implementation of CSR committees.","PeriodicalId":15826,"journal":{"name":"Journal of Financial Reporting and Accounting","volume":"1 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-11-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"147919024","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Does financial statement comparability reduce cost of equity? Evidence in emerging market","authors":"Phung Anh Thu, Pham Quang Huy","doi":"10.1108/jfra-02-2024-0099","DOIUrl":"https://doi.org/10.1108/jfra-02-2024-0099","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>The research aims to provide empirical evidence on the relationship between financial statement comparability (FSC) and cost of equity (COE) in an emerging market.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>Specifically, this study examines the relationship between FSC and COE of Vietnamese listed firms. The research uses the System Generalized Method of Moments regression techniques for a panel data set of 454 companies for the period 2015–2022.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>The authors find that firms with high comparability of financial statements have lower COE. To confirm the research findings, the authors conduct the robustness test by using different proxies for the cost of equity. Consistent results are found.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>The study contributes to the overall understanding of the relationship between FSC and COE, and suggests policy implications for relevant stakeholders such as managers, regulatory bodies and investors. Especially, regarding policymakers, this study could provide more insight into how the accounting convergence process impacts the effectiveness of a firm’s capital allocation.</p><!--/ Abstract__block -->","PeriodicalId":15826,"journal":{"name":"Journal of Financial Reporting and Accounting","volume":"49 1","pages":""},"PeriodicalIF":2.5,"publicationDate":"2024-09-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142265828","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"The development of the European Union auditing research over the past decade: a systematic literature review and future research opportunities","authors":"Mohammed Ibrahem Ali Hassan, Katalin Borbély, Árpád Tóth","doi":"10.1108/jfra-03-2024-0124","DOIUrl":"https://doi.org/10.1108/jfra-03-2024-0124","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>The purpose of this study is to provide a systematic review of research development on auditing in the European Union over the past decade and suggest future research directions.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>Following the PRISMA protocol, the authors systematically reviewed the relevant literature and conducted a qualitative content analysis of 107 studies on auditing in the European Union published between 2012 and 2023.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>The results indicate increased auditing literature in the European Union from 2012 to August 2023. Around 40% of the papers were focused on six nations: Germany, Spain, Italy, the UK, Sweden and France. Additionally, 35.5% of papers have been published in three major journals: <em>Accounting in Europe</em>, <em>International Journal of Auditing</em> and <em>the European Accounting Review</em>. Moreover, 82.24% of papers used quantitative methods, with a few using qualitative or mixed methods. Also, most of the studies in the sample endorsed the European Union’s auditing reforms, which included implementing a cap on nonaudit fees and enhancing the independence of audit committees. Contrary to this viewpoint, multiple studies have expressed disagreement with enforcing a total prohibition on nonaudit services, as certain services can enhance auditing quality. Similarly, other studies have contested the necessity of mandatory auditor rotation every 10 years, citing the significant additional expenses associated with this practice. Finally, further studies supported the European Union’s decision to make the joint audit voluntary, as it is related to high audit fees and low audit quality.</p><!--/ Abstract__block -->\u0000<h3>Research limitations/implications</h3>\u0000<p>The limitations of this research primarily stem from the authors’ choices in selecting the database and defining the criteria for searching the studied papers.</p><!--/ Abstract__block -->\u0000<h3>Practical implications</h3>\u0000<p>This paper offers valuable insights into the future research prospects in the European Union’s auditing field. Hence, this analysis can be helpful for researchers and practitioners in developing this field based on future research recommendations and the identified themes.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>To the best of the authors’ knowledge, this paper is the first study to systematically review the developments of the European Union auditing literature over the past decade.</p><!--/ Abstract__block -->","PeriodicalId":15826,"journal":{"name":"Journal of Financial Reporting and Accounting","volume":"52 1","pages":""},"PeriodicalIF":2.5,"publicationDate":"2024-09-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142265830","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Risk disclosure, earnings smoothing and firm perceived risk","authors":"Hend Monjed, Salma Ibrahim, Bjørn N. Jørgensen","doi":"10.1108/jfra-12-2023-0778","DOIUrl":"https://doi.org/10.1108/jfra-12-2023-0778","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This paper aims to examine the association between perceived firm risk and two reporting mechanisms: risk disclosure and earnings smoothing in the UK context.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>This study juxtaposes three competing views, the “null”, the “divergence” and the “convergence” hypotheses, and empirically investigates whether risk disclosure and earnings smoothing affect firm perceived risk for a sample of large UK firms with rich and poor information environments. This study also uses the global financial crisis as an external shock on overall risk in the economy to investigate when and how managers use these two reporting mechanisms to shape the firm perceived risk.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>This paper documents that risk disclosures have no significant effect on investors’ risk perceptions, consistent with risk disclosures containing boilerplate and generic statements about firm risk. This paper also finds that earnings smoothing reduces investors’ risk perceptions, reflecting investors’ interpretations about future firm performance. Additional tests reveal that earnings smoothing is not associated with perceived firm risk for firms with rich information environments and expanded risk disclosures. Furthermore, reporting smooth earnings decreases perceived firm risk following the global financial crisis. These findings are robust to alternative specifications and measures of earnings smoothing as well as post-filing perceived firm risk.</p><!--/ Abstract__block -->\u0000<h3>Research limitations/implications</h3>\u0000<p>This study does not distinguish between the garbling role and the informational role of earnings smoothing. The risk disclosure measurement used in this study, developed based on UK annual reports, may limit the generalizability of findings to other countries.</p><!--/ Abstract__block -->\u0000<h3>Practical implications</h3>\u0000<p>The findings suggest that managers should revise their risk disclosure strategies to provide in-depth details on firm risk. Investors might require information and thorough assessment to evaluate investment risks when firms provide generic risk disclosures and smoothed earnings by consulting sources like financial intermediaries. Regulators should keep an eye on firms reporting boilerplate risk disclosures and on how smoothing earnings impacts the firm perceived risk following economic turmoil, to guide interventions that promote market stability.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>The findings provide new insights into when and how managers use their financial reporting discretion to make firms appear less risky and, therefore, influence investors’ risk perceptions.</p><!--/ Abstract__block -->","PeriodicalId":15826,"journal":{"name":"Journal of Financial Reporting and Accounting","volume":"99 1","pages":""},"PeriodicalIF":2.5,"publicationDate":"2024-09-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142265831","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"The impact of board diversity on earnings management in Kuwait","authors":"Ahmad Alqatan","doi":"10.1108/jfra-05-2024-0279","DOIUrl":"https://doi.org/10.1108/jfra-05-2024-0279","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This paper aims to examine the consequences of board diversity (BD) in Kuwait. In particular, it examines the impact of BD (gender, age and nationality) on earnings management (EM).</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>The research uses data from 103 non-financial Kuwaiti-listed companies from 2010 to 2017. The data is collected from the companies’ data from secondary sources such as their annual reports. The data analysis methods are correlation, multi-regression and robust regression. EM is measured using the modified Jones model (1995) and Kothari <em>et al.</em> (2005).</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>The findings show a negative association between gender diversity (GD) and EM. It also found a positive relationship between age diversity (AD) and EM and no relationship between national diversity (ND) and EM.</p><!--/ Abstract__block -->\u0000<h3>Practical implications</h3>\u0000<p>This study’s results have significant implications for investors. The practical empirical findings indicate that GD on the board did not impact on EM. Also, it is more important to have senior directors on the board than AD to reduce EM. There is no need to employ any foreigners because they do not affect EM.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>It contributes to the growing body of literature on BD by investigating its effect on EM. Furthermore, building on the broader literature on gender, age and ND by highlighting the critical role that women, young people and foreign directors play in improving boards' monitoring role on EM. More specifically, it contributes to existing knowledge, provides a theoretical contribution and makes a methodological contribution.</p><!--/ Abstract__block -->","PeriodicalId":15826,"journal":{"name":"Journal of Financial Reporting and Accounting","volume":"11 1","pages":""},"PeriodicalIF":2.5,"publicationDate":"2024-09-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142265829","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Navigating uncertainty: the role of auditor demographics in key audit matters reporting amid COVID-19 in Egypt","authors":"Hosam Moubarak, Ahmed A. Elamer","doi":"10.1108/jfra-04-2024-0183","DOIUrl":"https://doi.org/10.1108/jfra-04-2024-0183","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This study aims to explore the auditors’ responses to the COVID-19 pandemic in Egypt, with a focus on how their demographic characteristics – specifically gender, work experience and audit firm size – affect their ability to identify key audit matters (KAMs).</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>The study used exploratory factor analysis to develop an index for evaluating auditors’ proficiency in distinguishing KAMs from non-KAMs, followed by multivariate regression analysis to analyze the impact of auditors’ demographics on this ability.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>The study’s findings are significant as they highlight the influence of auditors’ gender and work experience on their capability to correctly classify KAMs. However, the size of the audit firm showed no significant effect on the auditors’ decision-making efficacy in identifying KAMs.</p><!--/ Abstract__block -->\u0000<h3>Research limitations/implications</h3>\u0000<p>While the study illuminates critical aspects of audit judgment during unprecedented times, it acknowledges limitations, including its geographical focus on Egypt and reliance on self-reported data. The implications stress the need for audit firms and regulators to consider auditors’ demographic characteristics when formulating policies to enhance audit quality and reliability during crises.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>This research breaks new ground in the auditing literature by shedding light on the distinct role of auditor demographics in shaping audit opinion during crises. It is one of the pioneering studies to quantitatively assess the impact of auditors’ gender, experience and firm size on KAM identification in a global health crisis. It provides a unique perspective on audit practices in emerging economies.</p><!--/ Abstract__block -->","PeriodicalId":15826,"journal":{"name":"Journal of Financial Reporting and Accounting","volume":"31 1","pages":""},"PeriodicalIF":2.5,"publicationDate":"2024-09-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142191242","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"The role of ESG reporting, artificial intelligence, stakeholders and innovation performance in fostering sustainability culture and climate resilience","authors":"Mohamed Ismail Mohamed Riyath, Achchi Mohamed Inun Jariya","doi":"10.1108/jfra-10-2023-0621","DOIUrl":"https://doi.org/10.1108/jfra-10-2023-0621","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This study aims to investigate the causal relationships among environmental, social and governance reporting (ESGR), stakeholder sustainability awareness, use of artificial intelligence (AI), sustainability culture, innovation performance and climate resilience of organizations across diverse sectors in Sri Lanka.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>A survey was conducted among 327 respondents, including senior accounting professionals, operations managers and functional heads to gather company-level data in various industries in Sri Lanka. A disjoint two-stage approach validated the measurement model, and the partial least squares structural equation model (SEM) was used to test the proposed hypotheses.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>The analysis evidences the mediating role of stakeholders' sustainability awareness on the relationship between ESGR and sustainability culture. Furthermore, it emphasizes the role of sustainability culture in driving climate resilience. Innovation performance acts as a moderator, strengthening the relationship between the use of AI and sustainability culture.</p><!--/ Abstract__block -->\u0000<h3>Practical implications</h3>\u0000<p>The study suggests that organizations should strategically use ESGR, integrate AI and prioritize stakeholder engagement to strengthen their commitment to sustainability. These provide insight for decision-making in organizations seeking to align with sustainable business practices.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>It explores the use of AI to enhance ESGR and sustainability culture, providing a broader understanding of how organizations manage AI and stakeholders in sustainability issues.</p><!--/ Abstract__block -->","PeriodicalId":15826,"journal":{"name":"Journal of Financial Reporting and Accounting","volume":"162 1","pages":""},"PeriodicalIF":2.5,"publicationDate":"2024-09-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142191253","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Corruption and sustainability disclosure-firm performance sensitivity: an international evidence","authors":"Siddhartha Barman, Jitendra Mahakud","doi":"10.1108/jfra-01-2024-0040","DOIUrl":"https://doi.org/10.1108/jfra-01-2024-0040","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>The purpose of this study is to examine the nexus between sustainability disclosure, corruption perception and firm performance through a cross country analysis.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>The study period ranges from 2014 to 2021 and the data set comprises non-financial companies across 23 nations comprising of both developed and emerging economies. This study has used a dynamic panel data model, i.e. the system generalized method of moments (SGMM) technique, to examine this issue.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>The authors find that sustainable disclosure affects firm performance positively and corruption perception decreases the financial performance. The results explain that effective higher sustainable disclosures help to achieve control and monitor resources by reducing risk and provides strong linkages and expertise. It also affirms that corruption plays a vital role in determining financial performance of the companies. The results also reveal that corruption perception does not influence the sustainable disclosure-performance sensitivity. But in case of emerging economies, corruption reduces the influence of sustainability disclosure on financial performance of the companies.</p><!--/ Abstract__block -->\u0000<h3>Practical implications</h3>\u0000<p>This study has practical implications for policymakers as well as corporate managers to consider sustainable disclosure norms while framing their policies to derive maximum benefits.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>This study is a new investigation that explores the intertwining relationship between sustainable disclosure, corruption and firm performance across the countries.</p><!--/ Abstract__block -->","PeriodicalId":15826,"journal":{"name":"Journal of Financial Reporting and Accounting","volume":"13 1","pages":""},"PeriodicalIF":2.5,"publicationDate":"2024-09-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142191243","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Financial instruments with characteristics of equity: outcomes and value relevance","authors":"Eduardo Flores, Marco Fasan","doi":"10.1108/jfra-01-2024-0044","DOIUrl":"https://doi.org/10.1108/jfra-01-2024-0044","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This study aims to investigate the motivations behind the issuance of financial instruments with characteristics of equity (FICE), economic consequences associated with their issuance and accounting classifications based on a value-relevance approach.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>Using a sample of 169 financial and nonfinancial firms from 10 jurisdictions that adopted International Financial Reporting Standards, the authors use a difference-in-differences econometric approach.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>The findings reveal that FICE issuers are more leveraged companies with higher costs of equity and, in some cases, lower effective tax rates. This evidence corroborates the hypothesis that issuers of FICEs seek to increase their book values of equity (accounting treatment as equity) and, simultaneously, generate deductible expenses for tax purposes (tax treatment as liability).</p><!--/ Abstract__block -->\u0000<h3>Practical implications</h3>\u0000<p>This finding suggests that market participants do not treat these instruments as regular equity but rather as quasi-equity. The findings suggest that a binary classification of FICE as debt or equity may not be the accounting treatment that best represents the underlying economic substance of these contracts. Furthermore, this study reinforces the IASB indication regarding to increase the FICE disclosure to allow stakeholders to better understand the economic essence of these bonds.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>This study assesses the economic outcomes and market evaluation of a specific type of FICE that has not been previously studied, which is similar to the examples provided by the IASB in their materials on the subject.</p><!--/ Abstract__block -->","PeriodicalId":15826,"journal":{"name":"Journal of Financial Reporting and Accounting","volume":"10 1","pages":""},"PeriodicalIF":2.5,"publicationDate":"2024-09-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142191246","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}