Journal of Applied Accounting Research最新文献

{"title":"Sustainability assurance joint provision and assurance statement readability: does the assurance provider gender diversity matter?","authors":"Yosra Mnif, Jihene Kchaou","doi":"10.1108/jaar-04-2023-0117","DOIUrl":"https://doi.org/10.1108/jaar-04-2023-0117","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>The primary objective of this paper is to investigate the relation between the joint provision of sustainability assurance and the readability of sustainability assurance statements. Additionally, it explores whether the presence of a female assurance partner influences the relation between the joint provision of sustainability assurance and the readability of sustainability assurance statements.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>We analyzed a dataset comprising 882 firm-year observations from companies operating in sustainability sensitive industries for the period that spans the years 2016–2018.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>The research indicates that joint sustainability assurance provision is associated with a more readable sustainability assurance statement, consistent with the “four-eyes” principle. Furthermore, the presence of a female assurance provider influences the joint assurance provision’s impact on sustainability assurance statement readability. Collectively, these results remain robust as they hold unchanged after controlling for endogeneity concerns.</p><!--/ Abstract__block -->\u0000<h3>Research limitations/implications</h3>\u0000<p>This study provides novel insights into the recent sustainability assurance literature, being the first to examine joint assurance provision, assurance partner gender and sustainability assurance statement readability.</p><!--/ Abstract__block -->\u0000<h3>Practical implications</h3>\u0000<p>This study has the potential to catalyze regulatory and policy initiatives by providing compelling evidence in favor of mandating joint audits within the area of sustainability assurance practices. Additionally, this research contributes to the ongoing discussion about gender diversity in accounting and nonaccounting assurance firms, providing evidence of the positive impact of female assurance partners on sustainability assurance statement readability.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>The regression results provide preliminary evidence on how the presence of a female audit partner influences the relationship between the sustainability assurance joint provision and sustainability assurance statement readability, an issue that has not been examined before.</p><!--/ Abstract__block -->","PeriodicalId":46321,"journal":{"name":"Journal of Applied Accounting Research","volume":"34 1","pages":""},"PeriodicalIF":3.0,"publicationDate":"2024-05-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140938247","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":"Sustainable development goals disclosure and analyst forecast quality","authors":"Giuseppe Nicolò, Giovanni Zampone, Giuseppe Sannino, Paolo Tartaglia Polcini","doi":"10.1108/jaar-07-2023-0223","DOIUrl":"https://doi.org/10.1108/jaar-07-2023-0223","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This study aims to investigate the relationship between corporate sustainable development goals (SDGs) disclosure and analyst forecast quality.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>The study focuses on a sample of 95 Italian-listed companies preparing the mandatory non-financial declaration (NFD) according to the Global Reporting Initiative (GRI) standards over a five-year period (2017–2021), corresponding to an unbalanced sample of 438 observations. Analyst forecast quality was proxied by earnings forecast accuracy (FA) and earnings forecast dispersion (FD), built on data retrieved from the Refinitiv database. A manual content analysis was performed on NFDs to derive an SDG disclosure score (SDGD) for each sampled company.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>This study provides empirical evidence suggesting that voluntary SDG disclosure matters to the capital market in that it helps enhance the information environment of companies, evidenced by improved analyst forecast quality. In particular, this study highlighted that SDG disclosure positively influences analyst FA while negatively affecting analyst FD.</p><!--/ Abstract__block -->\u0000<h3>Research limitations/implications</h3>\u0000<p>This study focuses on the Italian context, which has idiosyncratic characteristics regarding the structure of the financial market, the composition of corporate ownership and experience in non-financial reporting practices.</p><!--/ Abstract__block -->\u0000<h3>Practical implications</h3>\u0000<p>This study indicates to corporate managers that following GRI standards may represent the right way to better integrate SDG disclosure in corporate non-financial reports and increase the relevance of such information for investors and other capital market participants.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>To the best of the authors’ knowledge, this is the first study that empirically examines the association between SDG disclosure and analyst forecast quality.</p><!--/ Abstract__block -->","PeriodicalId":46321,"journal":{"name":"Journal of Applied Accounting Research","volume":"38 1","pages":""},"PeriodicalIF":3.0,"publicationDate":"2024-05-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140834165","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 investors care about greening in corporations? The role of eco-innovation and CSR committee","authors":"Abdullah S. Karaman, Ali Uyar, Rim Boussaada, Majdi Karmani","doi":"10.1108/jaar-10-2023-0289","DOIUrl":"https://doi.org/10.1108/jaar-10-2023-0289","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>Prior studies mostly tested the association between carbon emissions and firm value in certain contexts. This study aims to advance the existing literature by concentrating on three indicators of greening in corporations namely resource use, emissions and eco-innovation, and examining their value relevance in the stock market at the global level. Furthermore, we deepen the investigation by exploring the moderating role of eco-innovation and the CSR committee between greening in corporations and market value.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>The data for the study were retrieved from the Thomson Reuters Eikon database for the years between 2002 and 2019 and contain 17,961 firm-year observations which are analyzed through fixed-effects regression.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>The results reveal that while resource usage is viewed as value-relevant by the market, the emissions and eco-innovation are not. However, despite eco-innovation <em>per se</em> not being value-relevant, its interaction with resource usage and emissions is value-relevant. Furthermore, CSR committees undertake a very critical role in translating greening practices into market value.</p><!--/ Abstract__block -->\u0000<h3>Research limitations/implications</h3>\u0000<p>While the results for emissions support the cost-concerned school, the findings for resource usage confirm the value creation school. Furthermore, the interaction effect of eco-innovation and CSR committee confirms the resource-based theory and stakeholder theory, respectively.</p><!--/ Abstract__block -->\u0000<h3>Practical implications</h3>\u0000<p>Investors regard eco-innovation-induced pro-environmental behaviors as value-relevant. These results propose firms replace eco-innovation at the focal point in developing environmental strategies and connecting other greening efforts to it. Moreover, CSR committees are critical to corporations in translating greening practices into firm value by developing and implementing disclosure and communication strategies.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>The study’s originality stems from investigating the synergetic effect that eco-innovation and CSR committees generate in translating greening practices to greater market value at a global scale.</p><!--/ Abstract__block -->","PeriodicalId":46321,"journal":{"name":"Journal of Applied Accounting Research","volume":"2 1","pages":""},"PeriodicalIF":3.0,"publicationDate":"2024-04-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140625303","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":"How does excess cash affect corporate financial performance?","authors":"Ismail Kalash","doi":"10.1108/jaar-08-2023-0231","DOIUrl":"https://doi.org/10.1108/jaar-08-2023-0231","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This article analyzes the moderating role of investment opportunities, business risk and agency costs in shaping the nexus between excess cash and corporate performance.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>This research uses dynamic regression models (two-step system generalized method of moments) to analyze the data related to 200 Turkish companies listed on Borsa Istanbul (BIST) for the years between 2009 and 2020.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>The findings indicate that when excess cash increases, the financial performance deteriorates only for firms with lower investments compared to firms with more investments. In addition, investment contributes to better financial performance for firms that hold cash surplus, whereas the influence of investment is insignificant for firms that have insufficient cash. Agency costs of equity exacerbate the adverse impact of excess cash on financial performance while agency costs of debt mitigate this effect. Excess cash reduces the financial performance of highly leveraged firms. However, this impact becomes insignificant when debt ratio decreases. The findings also show that investment has more significant role than business risk in building the precautionary motive to hold cash.</p><!--/ Abstract__block -->\u0000<h3>Research limitations/implications</h3>\u0000<p>The findings of this article are limited to the Turkish market. Future research is still needed in other emerging markets to compare the results and reveal more about the effect of excess cash on firm performance, and how other factors can change this effect.</p><!--/ Abstract__block -->\u0000<h3>Practical implications</h3>\u0000<p>The findings verify the increased significance of excess cash in the presence of investment opportunities and difficulties in accessing external funds. Nevertheless, the role of the equity related agency problem in reducing the benefits of cash surplus confirms the necessity of policies that support corporate governance, especially in emerging markets.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>This article, according to the knowledge of author, is the first to examine the role of agency costs associated with debt and equity, and the compound effect of investment opportunities and business risk on the nexus between excess internal funds and corporate financial performance in emerging markets.</p><!--/ Abstract__block -->","PeriodicalId":46321,"journal":{"name":"Journal of Applied Accounting Research","volume":"43 1","pages":""},"PeriodicalIF":3.0,"publicationDate":"2024-04-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140584019","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 influence of financial flexibility on firm performance: the moderating effects of investment efficiency and investment scale","authors":"Wei Wu, Chau Le, Yulu Shi, Fadi Alkaraan","doi":"10.1108/jaar-07-2023-0192","DOIUrl":"https://doi.org/10.1108/jaar-07-2023-0192","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>Financial flexibility and investment efficiency are of vital importance in strategic choices at boardrooms, particularly in post-crisis recovery strategies. This study examines the moderating effects of investment efficiency and investment scale on the relationship between financial flexibility and firm performance.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>The authors use sample of 10,755 US-listed firms over the period 2010–2021 to examine the relationships between investment scale, investment efficiency, financial flexibility and firm performance. Particular attention is paid to overinvestment and underinvestment.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>Findings of this study reveal that financial flexibility mitigates investment inefficiency through reducing overinvestment. Financial flexibility contributes to boost a firm’s accounting and market performance. Additionally, investment efficiency and investment scale have moderating effects on the relationship between financial flexibility and firm performance. However, the influence of investment efficiency is greater than the influence of investment scale. Finally, the authors find that the direct and indirect effects of financial flexibility are stronger on market performance than accounting performance, implying that market is more sensitive to corporate financial policies.</p><!--/ Abstract__block -->\u0000<h3>Research limitations/implications</h3>\u0000<p>Findings of this study have implications for scholars, decision-makers policymakers, investors and other stakeholders.</p><!--/ Abstract__block -->\u0000<h3>Practical implications</h3>\u0000<p>This study has its own limitations due to the sample selection issues, country context and the research model adopted by this study.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>The novel contribution to the extant literature is incorporating the influence of investment scale and investment efficiency into the relationship between financial flexibility and firm performance.</p><!--/ Abstract__block -->","PeriodicalId":46321,"journal":{"name":"Journal of Applied Accounting Research","volume":"43 1","pages":""},"PeriodicalIF":3.0,"publicationDate":"2024-03-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140074397","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":"Earnings management, investor sentiment and short-termism","authors":"Kléber Formiga Miranda, Márcio André Veras Machado","doi":"10.1108/jaar-05-2023-0127","DOIUrl":"https://doi.org/10.1108/jaar-05-2023-0127","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This study examines the investment horizon influence, mediated by market optimism, on earnings management based on accruals and real activities. Based on short-termism, the authors argue that earnings management increases in optimistic periods to boost corporate profits.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>The authors analyzed non-financial Brazilian publicly traded firms from 2010 to 2020 by estimating industry-fixed effects of groups of short- and long-horizon firms to compare their behavior on earnings management practices during bullish moments. For robustness, the authors used alternate measures and trade-off analyses between earning management practices.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>The findings indicate that, during bullish moments, companies prioritize managing their earnings through real activities management (RAM) rather than accruals earnings management (AEM), depending on their time horizon. The results demonstrate the trade-off between earnings management practices.</p><!--/ Abstract__block -->\u0000<h3>Research limitations/implications</h3>\u0000<p>This study presents limitations when using proxies for earnings management and investor sentiment.</p><!--/ Abstract__block -->\u0000<h3>Practical implications</h3>\u0000<p>Investors and regulators should closely monitor companies' operations, especially during bullish market conditions to prevent fraud.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>The study addresses investor sentiment mediation in the earnings management discussion, introducing the short-termism approach.</p><!--/ Abstract__block -->","PeriodicalId":46321,"journal":{"name":"Journal of Applied Accounting Research","volume":"68 1","pages":""},"PeriodicalIF":3.0,"publicationDate":"2024-01-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139516463","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":"Organizational resilience of audit firms – evidence from the outbreak of the COVID-19","authors":"Jesper Haga, Kim Ittonen","doi":"10.1108/jaar-06-2023-0185","DOIUrl":"https://doi.org/10.1108/jaar-06-2023-0185","url":null,"abstract":"PurposeThis paper examines the organizational resilience of audit firms during the early stages of COVID-19. The unexpected restrictions placed on travel and on-site working created unanticipated barriers for auditors in Hong Kong. The authors expect that auditors with greater organizational resilience can respond to unexpected situations and restore expected performance levels relatively quickly.Design/methodology/approachThe authors utilize a sample of 1,008 companies listed on Hong Kong Stock Exchange (HKEX) with a financial year-end of December 31. The authors identify five proxies contributing to organizational resilience: auditor size, industry specialization, diversity, geographic proximity to the client and auditing a new client. The authors use audit report timeliness as this study's main dependent variable.FindingsThis study's full-sample results suggest that larger auditors, industry specialists and auditors with closer relationships to clients issued more timely audit reports during the pandemic. The analysis of a subsample of companies that initially published unaudited financial statements reveals that industry expertise and longer auditor-client relationships significantly reduced the need for year-end audit adjustments. Finally, the authors find that larger auditors were more likely to offload clients, whereas industry specialists were more likely to retain clients.Research limitations/implicationsThe results of the paper suggests that audit firm characteristics associated cognitive abilities, behavioral characteristics and contextual conditions are associated with audit firm organizational resilience and, consequently, helps auditors respond unexpected changes in the audit environment.Practical implicationsThe findings of the paper are informative for those involved in audit firm management or auditor hiring and retention decisions.Originality/valueThis study is the first to link organizational resilience to the performance of audit firms in a time of unexpected events. The authors connect three auditor and two auditor-client dimensions to the organizational resilience of the audit firms.","PeriodicalId":46321,"journal":{"name":"Journal of Applied Accounting Research","volume":"115 11","pages":""},"PeriodicalIF":3.0,"publicationDate":"2024-01-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139383388","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":"Top management characteristics and comprehensive focus on budgeting","authors":"Lili-Anne Kihn, Eva Ström","doi":"10.1108/jaar-02-2023-0036","DOIUrl":"https://doi.org/10.1108/jaar-02-2023-0036","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This study examines how the strong emphasis placed on the purposes of budgeting, referring to a comprehensive focus on budgeting, is related to top managers' education and tenure while controlling for their functional positions in their respective firms and ages, as well as several company-specific predictors (information quality, firm size, information technology, importance of profit and strategy).</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>Survey data were collected from senior managers of large manufacturing firms in Finland and Sweden.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>The results suggest that academic business education is positively associated with a comprehensive focus on budgeting, but tenure as well as functional position in the company (Chief Financial Officer (CFO) or not) and age are not. Overall, the company-specific control variables in general and information quality in particular are shown to have greater explanatory power than the top management characteristics analyzed.</p><!--/ Abstract__block -->\u0000<h3>Research limitations/implications</h3>\u0000<p>This study identifies several empirically supported factors that seem to contribute to a comprehensive focus on budgeting. The effects of information quality, business education, the importance of profit and firm size could be considered in future research.</p><!--/ Abstract__block -->\u0000<h3>Practical implications</h3>\u0000<p>Academic business education matters more than the other top management characteristics analyzed. If organizations want to make comprehensive use of budgets, they should employ business graduates and be mindful of company-specific variables.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>This study is the first to address a comprehensive focus on budgeting and some of its determinants. Future research could investigate a broader set of such determinants in different contexts.</p><!--/ Abstract__block -->","PeriodicalId":46321,"journal":{"name":"Journal of Applied Accounting Research","volume":"1 1","pages":""},"PeriodicalIF":3.0,"publicationDate":"2023-12-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138744380","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":"Banking research in the GCC region and agenda for future research – A bibliometric examination","authors":"Rajib Shome, Hany Elbardan, Hassan Yazdifar","doi":"10.1108/jaar-03-2023-0070","DOIUrl":"https://doi.org/10.1108/jaar-03-2023-0070","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This paper provides a comprehensive review of the influential and intellectual aspects of the literature on the Gulf Cooperation Council (GCC) region's banking activities.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>This study undertakes a bibliometric meta-analysis review of the GCC region banking literature, covering 199 articles published between 2004 and 2022, extracted from the Web of Science (WoS) database, followed by a content analysis of highly cited papers.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>This paper identifies the influential aspects of the GCC region banking literature in terms of journals, articles, authors, universities and countries. The paper also identifies and discusses five major research clusters: (1) bank efficiency; (2) corporate governance (CG) and disclosure; (3) performance and risk-taking; (4) systemic risk, bank stability and risk spillovers and (5) intellectual capital (IC). Finally, it identifies gaps in the literature and highlights some important research issues that provide directions for future research.</p><!--/ Abstract__block -->\u0000<h3>Research limitations/implications</h3>\u0000<p>This paper is limited to the articles indexed in the WoS database and written in English. Though the WoS database encompasses a wide range of multidisciplinary journals, there is a chance that some relevant articles are not included in the WoS database or written in another language.</p><!--/ Abstract__block -->\u0000<h3>Practical implications</h3>\u0000<p>This study provides regulators, practitioners and academics with valuable insight and an in-depth understanding of the banking system of the GCC region.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>To the best of the authors' knowledge, this is the first review paper on GCC region banking literature. This study provides regulators, practitioners and academics with valuable insight and an in-depth understanding of the banking system of the GCC region.</p><!--/ Abstract__block -->","PeriodicalId":46321,"journal":{"name":"Journal of Applied Accounting Research","volume":"28 1","pages":""},"PeriodicalIF":3.0,"publicationDate":"2023-12-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138689093","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":"Back to goodwill amortisation: impact of the 2016 Spanish regulation on the mispricing of listed firms","authors":"Fernando Ruiz-Lamas, David Peón","doi":"10.1108/jaar-12-2022-0331","DOIUrl":"https://doi.org/10.1108/jaar-12-2022-0331","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>This article analyses the recent inverse transition from goodwill impairment to goodwill amortisation implemented in Spain in 2016. The authors contribute to the existing literature by describing their differing impact over goodwill and impairment figures and testing the impact of goodwill on balances over stock prices.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>First, using a database with all Spanish non-financial firms with positive goodwill on their balance sheets, the authors describe the impact of the regulatory change over goodwill and impairment figures. Second, focussing on listed firms only, the authors study the impact of financial reporting of goodwill and impairment on stock prices.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>Average goodwill per company and the share of goodwill over total assets significantly reduced after 2016, but the results cannot be easily extrapolated to listed firms due to lack of data. When testing the impact of potentially inflated goodwill balances on prices, the authors find that investors kept overvaluing firms with inflated goodwill balances also with the amortisation method.</p><!--/ Abstract__block -->\u0000<h3>Research limitations/implications</h3>\u0000<p>The lack of data for listed firms with goodwill in Spain makes it difficult to obtain statistically sound evidence, the results could be biased by the cultural traits of the country and related to the intensity of enforcement and monitoring.</p><!--/ Abstract__block -->\u0000<h3>Practical implications</h3>\u0000<p>This might suggest that the effects of the impairment method linger, so the authors conform to the interpretation that the systematic amortisation paired with a periodic impairment test may lead to accounting that better reflects the underlying economics of goodwill.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>To the best of the authors' knowledge, there are no recent articles that analyse this new “turn-around” requiring again the systematic amortisation of goodwill.</p><!--/ Abstract__block -->","PeriodicalId":46321,"journal":{"name":"Journal of Applied Accounting Research","volume":"3 1","pages":""},"PeriodicalIF":3.0,"publicationDate":"2023-12-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138580506","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}