Mandatory Corporate Social Responsibility (CSR) Reporting and Financial Reporting Quality: Evidence from a Quasi-Natural Experiment

ABSTRACT Prior studies show that corporate social responsibility (CSR) reporting is informative to investors but lacks credibility. This study examines whether a commitment to audits of financial outcomes, proxied by audit fees, is associated with greater CSR reporting credibility. We find that audit fees are positively associated with the likelihood of standalone CSR report issuance, and this positive association becomes stronger when managers perceive a greater need for credibility, i.e., when CSR reports are longer or issued with external assurance, when firms have strong CSR concerns, and when reports are issued sporadically. Corroborating our results, we find that CSR reports issued by firms committing to high audit fees accelerate the incorporation of future earnings information into current stock price. Taken together, our findings suggest that a commitment to higher financial reporting quality has the potential to bring positive externality to firms' nonfinancial disclosures and ultimately affects the issuance of CSR reports.

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Nexus Between Corporate Social Responsibility, Environmental Disclosure and Financial Reporting Quality Among Listed Firms in Nigeria

International Journal of Financial Research ◽

10.5430/ijfr.v12n2p93 ◽

2021 ◽

Vol 12 (2) ◽

pp. 93

Author(s):

Odia Honesty Amenaghawon ◽

Gbenga Ekundayo ◽

Festus Odhigu ◽

Mary Josiah

Keyword(s):

Corporate Social Responsibility ◽

Social Responsibility ◽

Financial Reporting ◽

Stock Exchange ◽

Reporting Quality ◽

Financial Reporting Quality ◽

Environmental Disclosure ◽

Data Set ◽

Listed Firms ◽

Corporate Social

This paper seeks to provide a novel approach and insight into the synergies between corporate social responsibility (CSR), environmental disclosure (ED) and financial reporting quality (FRQ) which is emerging and changing rapidly. The study examined the nexus between corporate social responsibility (CSR), environmental disclosure (ED) and financial reporting quality (FRQ) among corporate entities listed on the Nigeria Stock Exchange (NSE). Data were collected from a sample of 169 listed firms in Nigeria. The research used a panel data set comprising of 624 firm year observations spanning the period 2015 to 2017. The empirical results of the study revealed that there exists a significant relationship between environmental disclosure(ED), firm size (FS), and financial reporting quality (FRQ). However, empirical evidence shows an insignificant relationship between social disclosure (SD), leverage and financial reporting quality (FRQ). We therefore recommend a proposal for the establishment of an inductive corporate social responsibility/environmental disclosure/financial reporting framework that future scientists/scholars can institute to explore the determinants of corporate social responsibility (CSR), environmental disclosure (ED) and financial reporting quality (FRQ) in developing countries.

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How Does Financial Reporting Quality Relate to Corporate Social Responsibility Expenditures? An International Analysis

Review of Pacific Basin Financial Markets and Policies ◽

10.1142/s0219091521500235 ◽

2021 ◽

pp. 2150023

Author(s):

James Juichia Lin ◽

Chen-Yu Wang ◽

Che-Hui Cheng

Keyword(s):

Corporate Social Responsibility ◽

Social Responsibility ◽

Financial Reporting ◽

Reporting Quality ◽

Managerial Discretion ◽

Financial Reporting Quality ◽

Social Dimensions ◽

Financial Report ◽

Report Quality ◽

Corporate Social

In this study, we examine whether financial reporting quality improves corporate social responsibility (CSR) decisions. By using a sample of 3,502 observations from 18 countries, our findings show that financial reporting quality is positively (negatively) associated with CSR activities for firms that are more prone to under-invest (over-invest) in CSR. These results suggest that financial reporting quality mitigates managerial discretion in CSR activities and leads to an improvement in CSR decisions. Further, we decompose CSR into environmental and social dimensions and find that the effects of financial report quality on CSR initiatives are more pronounced for firms with a tendency to under-invest in environmental CSR.

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Corporate Social Responsibility and Financial Reporting Quality:Evidence from Restatements

Accounting and the Public Interest ◽

10.2308/api-19-010 ◽

2020 ◽

Author(s):

Yi-Hung Lin ◽

Hua-Wei (Solomon) Huang ◽

Mark E. Riley ◽

Chih-Chen Lee

Keyword(s):

Financial Reporting ◽

Negative Relationship ◽

Reporting Quality ◽

Financial Statements ◽

Financial Statement ◽

Financial Reporting Quality ◽

Csr Reporting ◽

Corporate Social ◽

Reporting Environment ◽

The Relationship

We find a negative relationship between aggregate CSR scores and the probability that firms restated financial statements over the period 1991-2012. We then break that period into three sub-periods in order to determine whether the relationship holds for all three sub-periods. During the sub-periods of 1991-2001 and 2002-2005, the negative CSR score - restatement probability relationship holds. The negative relationship disappears in the 2006-2012 sub-period. Additional analyses indicate CSR scores are significantly higher in the 2006-2012 sub-period, suggesting the disappearance of the relationship between aggregate CSR scores and financial statement quality may relate to changes in CSR assessments and the CSR reporting environment. Our findings update the literature linking CSR scores and financial reporting quality and identify the need for further research as to the reasons the link between these constructs disappeared.

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Social capital and idiosyncratic return volatility

Australian Journal of Management ◽

10.1177/0312896217717573 ◽

2017 ◽

Vol 44 (1) ◽

pp. 3-31 ◽

Cited By ~ 8

Author(s):

Mostafa Monzur Hasan ◽

Ahsan Habib

Keyword(s):

Social Capital ◽

Corporate Social Responsibility ◽

Financial Reporting ◽

Indirect Effects ◽

Reporting Quality ◽

Jel Classification ◽

Financial Reporting Quality ◽

Return Volatility ◽

Direct And Indirect Effects ◽

Corporate Social

We examine whether regional social capital has any impact on idiosyncratic return volatility. Using US data, we find that firms headquartered in high social capital counties exhibit significantly lower idiosyncratic return volatility. This effect is more pronounced in the presence of financial reporting quality and corporate social responsibility. When we estimate the direct and indirect effects of social capital, our study reveals that the direct effect of social capital captures around 80% of the total effect. These findings suggest that firm-specific variables do not explain all of a firm’s idiosyncratic return volatility, but regional social capital also plays a role. JEL classification: G10, G12, G30, M14

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Corporate Social Responsibility Reporting – a Stakeholder’s Perspective Approach

Business Systems Research Journal ◽

10.1515/bsrj-2017-0003 ◽

2017 ◽

Vol 8 (1) ◽

pp. 30-42 ◽

Cited By ~ 5

Author(s):

Thorsten Litfin ◽

Gunther Meeh-Bunse ◽

Katja Luer ◽

Özlem Teckert

Keyword(s):

Corporate Social Responsibility ◽

Social Responsibility ◽

Financial Reporting ◽

Significant Development ◽

Financial Reporting Standards ◽

Csr Reporting ◽

Corporate Social Responsibility Reporting ◽

Corporate Social ◽

Browsing Behavior ◽

Empirical Methodology

Abstract Background: International financial reporting standards have constantly been facing fast-growing significant development. This has mainly been driven by the aim of better serving the needs of the investors. Awareness that corporate financial reporting provides short-sighted information and measures has been rising among politicians, in the society and on the financial markets. Therefore, Corporate Social Responsibility (CSR) reporting as a form of non-financial reporting has made it to limelight. Various reporting types developed, but the type of reporting is hardly codified. Objective: The goal of this paper is to identify the superior CSR reporting type from a stakeholder’s perspective. After identifying and analyzing central guidelines on CSR reporting and presenting different approaches, the authors will apply a positive-empirical methodology. Methods/Approach: In this first innovative joint attempt, eye-tracking technology is combined with a questionnaire for approaching CSR quality. Results: This study demonstrates the validity of the used methodology for the analysis of search and information browsing behavior in various types of sustainability reports. Conclusions: Overall our findings indicate that the reporting type "reference sustainability report" may not be advisable from a stakeholder’s perspective.

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Corporate Social Responsibility Reporting, Pyramidal Structure And Political Interference: Evidence From China

Journal of Applied Business Research (JABR) ◽

10.19030/jabr.v32i2.9606 ◽

2016 ◽

Vol 32 (2) ◽

pp. 703 ◽

Cited By ~ 3

Author(s):

Jianling Wang ◽

Mi Zhou ◽

Lijun Lei ◽

Weiguo Fan

Keyword(s):

Corporate Social Responsibility ◽

Social Responsibility ◽

Reporting Quality ◽

Policy Implications ◽

Asia Pacific ◽

Pyramidal Structure ◽

Listed Firms ◽

Csr Reporting ◽

Political Interference ◽

Corporate Social

This paper attempts to investigate the relation between pyramidal structure and corporate social responsibility (CSR) reporting quality and the effect of political interference on the relation. Based on 1388 Chinese A-share listed firms during 2010-2012, this paper demonstrates that the separation between control and ownership rights is significantly and positively related to the CSR reporting quality in the state-owned firms (SOFs), while negatively related to the CSR reporting quality in the non-state-owned firms (NSOFs). Results also indicate that the pyramidal layer between the bottom firms and their top ultimate owners is negatively related to CSR reporting quality, particularly significant for the NSOFs. Our research enriches the corporate governance literature by giving insights into the mechanism of pyramidal structure in corporate reporting, and extends the understanding of political interference in the CSR field. This study has public policy implications for China as well as a number of other countries in the Asia–Pacific region.

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