Journal of Financial Reporting and Accounting最新文献

{"title":"Does employee treatment affect trade credit? An international evidence","authors":"Ali Al-Maqarih, Hamdi Bennasr, Zaheer Anwer, Lotfi Karoui","doi":"10.1108/jfra-03-2024-0173","DOIUrl":"https://doi.org/10.1108/jfra-03-2024-0173","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This study aims to investigate the linkage of employee treatment and trade credit for a sample of 45 countries from 2003 to 2018. It explores the trade credit from a receivable perspective.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>The estimations are performed using panel regression with fixed effects for both country and year. A batter of robustness tests is also performed to validate the findings.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>The results reveal a positive and highly significant relation between employee treatment and trade credit. The authors observe that firms from labor-intensive and highly competitive industries are likelier to extend trade credit to their customers. The authors also find that firms from developed countries are more likely to extend trade credit to their customers.</p><!--/ Abstract__block -->\u0000<h3>Practical implications</h3>\u0000<p>First, to boost trade credit, the firms need to materialize fair employee treatment. Second, firms from labor-intensive firms and highly competitive industries need to care more about employee treatment which promotes trade credit.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>The findings offer novel evidence of the relationship between employee treatment and trade receivables.</p><!--/ Abstract__block -->","PeriodicalId":15826,"journal":{"name":"Journal of Financial Reporting and Accounting","volume":null,"pages":null},"PeriodicalIF":2.5,"publicationDate":"2024-09-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142191249","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":"Non-financial reporting by utilities: a structured literature review","authors":"Maria Testa","doi":"10.1108/jfra-12-2023-0719","DOIUrl":"https://doi.org/10.1108/jfra-12-2023-0719","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This paper aims to carry out a comprehensive overview of the academic debate on utilities’ non-financial reporting by highlighting the main issues and the emerging gaps.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>Using a structured literature review, this study identifies the state of the art, maps the evolution of non-financial reporting in utility companies and reveals unexplored issues and aspects.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>A critical analysis of the existing academic debate shows the development of utilities’ non-financial reporting literature and the focus of this debate. It provides insight into how utilities pay attention to non-financial reporting, what role this plays in corporate actions and relationships with stakeholders and what research gaps need further investigation.</p><!--/ Abstract__block -->\u0000<h3>Research limitations/implications</h3>\u0000<p>This study provides some useful recommendations to practitioners and regulators to be more conscious of the weaknesses and criticalities of utilities’ non-financial reporting and to address them when building such reporting. However, this study considered only articles published in peer-reviewed academic journals.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>A comprehensive literature review in the utilities’ non-financial reporting area is timely, given the increase in this type of reporting. The study has an original focus and develops an analytical framework highlighting the peculiarities of utilities.</p><!--/ Abstract__block -->","PeriodicalId":15826,"journal":{"name":"Journal of Financial Reporting and Accounting","volume":null,"pages":null},"PeriodicalIF":2.5,"publicationDate":"2024-09-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142191248","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 pandemic-driven changes and personal characteristics on auditors’ deviant behavior","authors":"Sandra Khalil","doi":"10.1108/jfra-03-2024-0129","DOIUrl":"https://doi.org/10.1108/jfra-03-2024-0129","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This study aims to investigate the impact of changes in audit processes during the pandemic on auditors’ deviant behavior, considering auditors’ personal characteristics, including demographic variables, spirituality levels and personality traits.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>A survey consisting of five parts was used to gather data from auditors employed at Big Four audit firms in the Middle East. The questionnaire collected data on auditors’ perceptions of changes in audit processes and deviant audit behavior during the pandemic, as well as information about their personal characteristics.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>The findings revealed a significant positive association between changes in audit processes and a heightened perception of deviant audit conduct during the pandemic. Males and extravert auditors expressed less favorable attitudes toward such behavior.</p><!--/ Abstract__block -->\u0000<h3>Research limitations/implications</h3>\u0000<p>The sample size was limited to 107 auditors due to the challenges of soliciting responses from auditors during the pandemic. The sole focus on the Big Four audit firms limited the generalizability of the results. Upcoming research should integrate qualitative methods alongside surveys and collect data from larger, more diverse samples to enhance the understanding of the pandemic’s impact on audit behavior.</p><!--/ Abstract__block -->\u0000<h3>Practical implications</h3>\u0000<p>The findings provide guidance and recommendations for audit firms to mitigate deviant behavior during crises while considering auditors’ personal factors. Recommended strategies include the organization of trainings to raise awareness of these risks and the integration of artificial intelligence to modernize audit processes and enhance audit firms’ readiness to confront future crises.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>This study offers a novel empirical investigation into how pandemic-driven changes in audit procedures relate to auditors' deviant behavior, while exploring the influence of auditors' individual traits, an unexplored area in the literature. It addresses this gap specifically in the context of the understudied Middle East region.</p><!--/ Abstract__block -->","PeriodicalId":15826,"journal":{"name":"Journal of Financial Reporting and Accounting","volume":null,"pages":null},"PeriodicalIF":2.5,"publicationDate":"2024-08-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142191251","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":"Do CEOs’ characteristics affect compliance with IFRS 7 risk disclosure requirements?","authors":"Yosra Mnif, Oumaima Znazen","doi":"10.1108/jfra-01-2024-0038","DOIUrl":"https://doi.org/10.1108/jfra-01-2024-0038","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This paper aims to examine the relationship between CEO’s attributes and the level of compliance with financial instruments risk disclosure (hereafter FIRD) as required by International Financial Reporting Standard (IFRS) 7.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>A data set of financial institutions listed on the Toronto Stock Exchange over the period 2015–2020 has been analyzed. Panel regressions have been estimated to provide empirical support for the testable hypotheses.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>The research findings reveal that chief executive officer (CEO) compensation and financial expertise are positively associated with the level of FIRD provided by Canadian financial institutions. However, the analysis does not document any significant statistical linkage between the compliance score and CEO tenure, gender and age.</p><!--/ Abstract__block -->\u0000<h3>Practical implications</h3>\u0000<p>This study has important implications for stakeholders evaluating the determinants of reporting quality, for boards of directors considering CEO compensation and expertise and for standard setters considering the compliance level with new standards requirements.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>This paper provides novel evidence on the linkage between CEO attributes and corporate disclosure. To the best of the authors’ knowledge, this paper is among the first to explore the impact of CEO characteristics on compliance with International Accounting Standards Board disclosure requirements. The analysis is also among the first to investigate compliance with IFRS 7 before and after the amendments required by IFRS 9.</p><!--/ Abstract__block -->","PeriodicalId":15826,"journal":{"name":"Journal of Financial Reporting and Accounting","volume":null,"pages":null},"PeriodicalIF":2.5,"publicationDate":"2024-08-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142191255","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":"Dow Jones sustainability Mila Pacific Alliance index and financial performance of Latin America integrated market","authors":"Óscar Díaz-Becerra, Rosa Castañeda-Moreano, Vladimir Rodríguez-Cairo","doi":"10.1108/jfra-09-2023-0524","DOIUrl":"https://doi.org/10.1108/jfra-09-2023-0524","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This study aims to determine the association between the companies’ financial indicators and the Dow Jones Sustainability MILA Pacific Alliance Index (DJSMPAUP Index).</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>The study adopted a quantitative, explanatory level approach, based on measuring the interactions between the financial performance ratios of these companies (return on assets, return on equity, EBITDA margin and net margin) and sustainability index of MILA member countries. The study used a non-experimental, retrospective, cross-sectional design, using observed data from the annual period spanning 2017 to 2022 for MILA companies and includes analyses before and after COVID-19.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>The estimates show a positive and statistically significant relationship between each company’s financial indicator and the DJSMPAUP index for the period 2017 to 2022.</p><!--/ Abstract__block -->\u0000<h3>Research limitations/implications</h3>\u0000<p>The primary limitation of the study was the availability of data, which restricted the use of more advanced statistical analyses, and the inclusion of many factors that can be associated with DJSMPAUP. This constraint arose since the index was introduced only from the 2017 annual period, resulting in a limited dataset.</p><!--/ Abstract__block -->\u0000<h3>Practical implications</h3>\u0000<p>The study sheds light on MILA’s companies and their characteristics and specific conditions, which can help to improve sustainability strategies with an impact on financial performance, primarily due to the significance of MILA in the world economy and the GDP of Latin America. It focuses on an emerging market with a few years of applying sustainability policies.</p><!--/ Abstract__block -->\u0000<h3>Social implications</h3>\u0000<p>This study contributes to revealing the progress in sustainability for member companies in MILA.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>The study connects the financial performance and the sustainability of organizations oriented to the emerging significance of MILA in the world economy.</p><!--/ Abstract__block -->","PeriodicalId":15826,"journal":{"name":"Journal of Financial Reporting and Accounting","volume":null,"pages":null},"PeriodicalIF":2.5,"publicationDate":"2024-08-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142191254","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":"Factors influencing meta-banking adoption: an empirical study","authors":"Husam Yaseen, Majda Al-Salim Ayoub, Christina Hattar, Ahmad Samed Al-Adwan, Malek Alsoud","doi":"10.1108/jfra-12-2023-0765","DOIUrl":"https://doi.org/10.1108/jfra-12-2023-0765","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This study aims to examine the main factors influencing customer meta-banking (metaverse banking) adoption intention based on the unified theory of acceptance and use of technology (UTAUT) model.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>In this study, the PLS-SEM modelling technique was used to analyse the quantitative data collected from a total of 407 participants who were purposefully chosen.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>The findings revealed that performance expectation, effort expectancy, facilitating conditions and hedonic motivation have significant positive effects on customers’ perception of the value associated with adopting the metaverse. However, the effect of social influence was found to be statistically insignificant. The results further emphasised that technostress is an obstacle that negatively influences the perceived value. Lastly, perceived value is found to be a key facilitator of adoption intention as it shows a positive effect on it.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>This study stands at the forefront of research on banking customers’ adoption intention of meta-banking. Going beyond the investigation of adoption intention, the research also critically assesses the applicability of UTAUT in the context of meta-banking. The results demonstrate that UTAUT is a viable theoretical framework for examining the dynamics of meta-banking. In particular, the findings indicate that UTAUT model provides a reliable lens for comprehending the intricacies of meta-banking adoption.</p><!--/ Abstract__block -->","PeriodicalId":15826,"journal":{"name":"Journal of Financial Reporting and Accounting","volume":null,"pages":null},"PeriodicalIF":2.5,"publicationDate":"2024-08-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142191257","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":"Antecedents and consequences of automated VAT solution adoption in Gulf cooperation countries: the case of the United Arab Emirates","authors":"Ahmad Al-Hiyari, Mohamed Chakib Kolsi, Abdulsalam Mas’ud","doi":"10.1108/jfra-10-2023-0617","DOIUrl":"https://doi.org/10.1108/jfra-10-2023-0617","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This paper aims to examine the antecedents of the Automated VAT Solution (AVS) and its eventual consequence on value-added tax (VAT) compliance costs among the small and medium enterprises (SMEs) in Gulf Cooperation Countries (GCC), with the United Arab Emirates (UAE) as context.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>A quantitative research design was deployed through a survey of 576 SMEs in the UAE. The data was analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM).</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>The findings revealed that technological factors (IT complexity and IT competency) and organizational factors (management support and size of SME) significantly influence AVS adoption. However, only consumer pressure was found to be significant among the environmental factors, and AVS adoption was found to have a significant negative effect on the VAT compliance cost.</p><!--/ Abstract__block -->\u0000<h3>Research limitations/implications</h3>\u0000<p>A lower coefficient of determination for the effect of AVS adoption on VAT compliance cost meant that there may be other accounting-related technologies that improve operational efficiency and process automation and, in the long run, lower the cost of VAT compliance. These technologies should be included in future studies.</p><!--/ Abstract__block -->\u0000<h3>Practical implications</h3>\u0000<p>The findings imply that the adoption of AVS among SMEs is highly desirable, as it reduces VAT compliance costs. Increased regulatory pressure by the UAE’s policymakers is also desirable to accelerate AVS adoption for enhanced cost reduction and revenue maximization from the perspectives of both the government and SMEs.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>To the best of the authors’ knowledge, this study could be the first to expand the Technology-Organization-Environmental (TOE) Framework through the integration of determinants of AVS adoption and VAT compliance costs among SMEs in GCC countries.</p><!--/ Abstract__block -->","PeriodicalId":15826,"journal":{"name":"Journal of Financial Reporting and Accounting","volume":null,"pages":null},"PeriodicalIF":2.5,"publicationDate":"2024-08-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142191256","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 information technology capability on audit report lag and audit fees: empirical evidence from the COVID-19 pandemic","authors":"Sakhr M. Bani-Khaled, Carlos Pinho","doi":"10.1108/jfra-08-2023-0493","DOIUrl":"https://doi.org/10.1108/jfra-08-2023-0493","url":null,"abstract":"\u0000Purpose\u0000This study aims to examine the impact of client information technology (IT) capabilities on audit report lag and audit fees in Jordanian companies listed on the Amman Stock Exchange (ASE) during the COVID-19 pandemic.\u0000\u0000\u0000Design/methodology/approach\u0000This study analysed financial and non-financial data from 72 Jordanian public shareholding companies listed on the ASE between 2014 and 2021. Using fixed- and random-effects models, the authors examined the impact of client IT capabilities on audit report lag and audit fees. The authors also examined how the COVID-19 pandemic might affect audit report lag and audit fees. The analysis incorporated various control variables specific to the Jordanian context to ensure accuracy.\u0000\u0000\u0000Findings\u0000Empirical evidence indicates that client IT capabilities do not significantly impact audit report lag and audit fees. In contrast, the COVID-19 pandemic has positively impacted audit report lag and audit fees, leading to an increase in audit report lag of 60 to 67 days and an increase in audit fees of approximately 15%. It is worth noting that these effects are more pronounced when influenced by factors including return on assets, company losses and audits conducted by the Big 4 firms.\u0000\u0000\u0000Research limitations/implications\u0000The scope of this study, which focuses on Jordanian firms, may limit the generalisability of the findings to other contexts. Reliance on aggregate IT infrastructure and software assets as proxies for IT capabilities might not fully capture their multifaceted nature, overlooking the qualitative aspects crucial for audit outcomes. Furthermore, excluding external factors such as governmental regulations underscores the need for future research to explore the nuanced interplay between IT capabilities, internal control systems and regulatory environments, enriching our understanding of audit practices.\u0000\u0000\u0000Originality/value\u0000This study contributes to auditing literature by examining the interplay between IT capabilities and audit processes during the COVID-19 pandemic in Jordan. This study highlights the unexpected finding that IT capabilities have minimal impact on audit report lags and fees, opening new avenues for research on how pandemics and similar crises can reshape auditing practices and influence regulatory policies in an evolving economic environment.\u0000","PeriodicalId":15826,"journal":{"name":"Journal of Financial Reporting and Accounting","volume":null,"pages":null},"PeriodicalIF":3.3,"publicationDate":"2024-08-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141927984","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 the chairman’s political and royal authority matter? Evidence from ESG disclosure in Gulf Cooperation Council","authors":"Hesham Nagdy Mohammed Abdelgawad, Guangqiang Liu","doi":"10.1108/jfra-10-2023-0600","DOIUrl":"https://doi.org/10.1108/jfra-10-2023-0600","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This study aims to explore the influence of the chairman’s political and royal authority on environmental, social and governance (ESG) disclosure within the context of nonfinancial companies listed in the Gulf Cooperation Council (GCC).</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>The authors adopt a mixed-methods approach, analyzing a data set of 262 nonfinancial GCC companies from 2016 to 2021. The authors use content analysis to collect the ESG disclosure data based on the ESG Disclosure Guidance provided by the GCC Financial Markets Committee. Quantitative methods are applied to investigate the effect of the chairman’s political and royal authority on ESG disclosure. The credibility of the findings is fortified through rigorous robustness and endogeneity tests.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>Consistent with the resource-based view and servant leadership theory, the authors found a positive impact of the chairman’s political and royal authority on ESG disclosure.</p><!--/ Abstract__block -->\u0000<h3>Practical implications</h3>\u0000<p>The findings of this study insight investors to consider the complex relationship between political affiliations and governance practices to align investments with sustainability and ethical criteria, thereby improving investment strategies in these contexts. This research offers a solid foundation for regulatory craft governance frameworks that acknowledge and incorporate the unique influence of royal family members and politically connected individuals within corporate boards.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>This study enhances the discourse on ESG disclosure by focusing on the underrepresented GCC region. This research breaks new ground by focusing on the impact of the chairman’s political and royal authority on ESG disclosure. In addition, it addresses previous methodological limitations by incorporating more comprehensive ESG data for the GCC market.</p><!--/ Abstract__block -->","PeriodicalId":15826,"journal":{"name":"Journal of Financial Reporting and Accounting","volume":null,"pages":null},"PeriodicalIF":2.5,"publicationDate":"2024-08-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141944716","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 statements readability and stock price crash risk: the mediating roles of information asymmetry and stock liquidity","authors":"Bahaa Saleeb Agaiby Bakhiet","doi":"10.1108/jfra-10-2023-0636","DOIUrl":"https://doi.org/10.1108/jfra-10-2023-0636","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This study aims to delve into the mechanisms through which financial statements readability (FSR) may impact the probability of stock price crashes. It specifically examines how information asymmetry and stock liquidity mediate this relationship.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>The study uses data from 107 nonfinancial firms listed on the Egyptian Stock Exchange between 2016 and 2019 to investigate the mediating roles of information asymmetry and stock liquidity using structural equation modeling (SEM). To enhance robustness, the author incorporates the Bootstrap method, conducting 5,000 iterations for consistent validation of results.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>The findings of this study identify two crucial mediators in the correlation between the readability of financial statements and stock price crash risk. First, information asymmetry partially mediates this association. Complex financial statements allow managers to hide adverse news, thereby increasing information asymmetry. Consequently, investors face challenges in assessing the company’s risk and performance, elevating the probability of stock price crashes when such concealed information is disclosed. Second, the results indicate that stock liquidity plays a key mediating role. Less-readable financial statements hinder stock liquidity, making it more difficult for investors to trade shares efficiently. This reduced liquidity amplifies the influence of negative news, potentially increasing the crash risk. Importantly, our findings demonstrate robustness across various measures, encompassing two readability indicators and two crash risk proxies, validated through both SEM and Bootstrap methods.</p><!--/ Abstract__block -->\u0000<h3>Research limitations/implications</h3>\u0000<p>Although this research provides valuable insights, it is critical to acknowledge its limitations. The relatively limited sample size may affect the broader applicability of the findings. Moreover, this study was carried out in the Egyptian setting, where financial reporting is conducted in Arabic. This linguistic and cultural specificity could influence the interpretation and generalizability of the findings beyond the Egyptian and Arab contexts. To overcome this limitation, this paper recommends conducting comparative research in diverse linguistic and cultural environments.</p><!--/ Abstract__block -->\u0000<h3>Practical implications</h3>\u0000<p>The outcomes of this research carry substantial implications for policymakers and regulators, emphasizing the need for ongoing efforts to enhance financial reporting standards. Clear and readable financial reports contribute not only to market transparency but also to the overall stability and resilience of financial markets. Policymakers are encouraged to consider our findings when shaping or revising standards to ensure readability and transparency, potentially reducing the risk of market disruptions. Furthe","PeriodicalId":15826,"journal":{"name":"Journal of Financial Reporting and Accounting","volume":null,"pages":null},"PeriodicalIF":2.5,"publicationDate":"2024-08-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141884393","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}