Testing the Quality of Financial Reporting in Indonesia and Its Influence on Corporate Social Responsibility Investments

2020 ◽  
Author(s):  
Lidya Agustina ◽  
Hanny ◽  
Meyliana
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Reporting ◽  
Corporate Social

Corporate social responsibility and earnings management in the EU: a panel data analysis approach

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Panagiotis E. Dimitropoulos
Keyword(s):  
Corporate Social Responsibility ◽  
Panel Data ◽  
Social Responsibility ◽  
Earnings Management ◽  
Financial Reporting ◽  
Negative Association ◽  
Content Type ◽  
Corporate Social ◽  
The Eu

Purpose Over the past decades, corporate social responsibility (CSR) has been considered as a significant corporate strategy and also has been documented as a main information dissemination mechanism of corporations to shareholders, creditors and other external stakeholders. This fact makes the CSR activities and CSR performance interconnected with the quality of firms’ financial reporting. The purpose of this paper is to study the impact of CSR performance on the earnings management (EM) behaviour using a sample from 24 European Union (EU) countries summing up to 121,154 firm-year observations over the period 2003–2018. Design/methodology/approach The study uses a multi-country data set with various dimensions of CSR performance including indexes regarding workforce, community relations, product responsibility and human rights protection. The empirical analysis is conducted with panel data regressions. Findings Evidence supports the negative association between CSR and EM indicating that high CSR performing firms are associated with less income smoothing and discretionary accruals, thus with higher financial reporting quality. Practical implications Regulatory agencies in the EU could use the findings of the study for the improvement of the accounting framework via enhancing the use and publications of social and environmental responsibility information and reports. Social implications Also, the current paper could be of interest not only to academic researchers but also to potential and existing investors in European corporations. The negative association between CSR performance and EM could be used by investors in assessing the risk of firms and the quality and reliability of their financial information. Originality/value This is the first study within the EU, which considers the multi-facet characteristics of CSR on the quality of accounting earnings and offers useful policy implications for regulators and investors.

scholarly journals Corporate Social Responsibility, Audit Committee Expertise, and Financial Reporting: Empirical Evidence from Korea

2021 ◽  
Vol 13 (19) ◽  
pp. 10517
Author(s):  
Haeyoung Ryu ◽  
Soo-Joon Chae ◽  
Bomi Song
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Reporting ◽  
Audit Committee ◽  
Earnings Quality ◽  
Audit Committees ◽  
Accounting Expertise ◽  
Corporate Social

Corporate social responsibility (CSR) involves multiple activities and is influenced by the cultural and legal environment of the country in which a firm is located. This study examines the role of audit committees’ (AC) financial expertise in the relationship between CSR and the earnings quality of Korean firms with high levels of CSR. Using a multivariate analysis, it investigates whether the ACs that include members with accounting expertise, finance expertise, or supervisory expertise individually affect a firm’s decision making. It also examines how ACs with diverse expertise contribute toward improving the financial reporting quality of firms with high levels of CSR. The results demonstrate that when there is a certified accountant in the AC of a firm that practices CSR based on ethical motivation, the earnings management through discretionary accruals is more strictly controlled. This is more effective when the AC comprises members with accounting and non-accounting expertise. This finding implies that the AC plays a positive role in improving the accounting information quality of firms with CSR excellence. Moreover, while the role of accounting experts in the AC is important for maintaining high earnings quality, combining other types of expertise creates synergy.

scholarly journals Market Responsiveness to Corporate Social Responsibility

2019 ◽  
Vol 8 (4) ◽  
pp. 114
Author(s):  
Zev Fried
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Reporting ◽  
Perceived Quality ◽  
Financial Information ◽  
Factors Affecting ◽  
Earnings Response Coefficients ◽  
Corporate Social ◽  
The Impact

Market reaction to surprises in earnings announcements has long been used to measure the quality of the information content of the announcement, and studies have explored various factors affecting the response. This study adds to this body of research by factoring in the level of corporate social responsibility (CSR) exhibited by the firm and employs a relatively new measure of a company’s level of CSR, rankings published by JUST Capital. I hypothesize that financial information reported by higher ranked companies is weighed more heavily by investors than those reported by non-ranked or lower-ranked companies. Using earnings response coefficients as a measure of the perceived quality of the financial information reported by the firms, my results provide direct support of the hypothesis, indicating that the market reacts more strongly to earnings surprises for firms with high JUST rankings than for unranked firms or firms with lower rankings. This result contributes new insights into the impact of a firm’s CSR in terms of the perceived quality of a firm’s financial reporting.

The informational component of corporate social responsibility assessment: Results of empirical research

2021 ◽  
Vol 20 (11) ◽  
pp. 2089-2112
Author(s):  
Ol'ga V. EFIMOVA ◽  
Ol'ga V. ROZHNOVA
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Reporting ◽  
Information Disclosure ◽  
Social Problems ◽  
Systems Approach ◽  
Social Information ◽  
Financial Statements ◽  
Corporate Social

Subject. We consider completeness and quality of social information disclosure for systematic presentation of corporate social responsibility of organizations in financial and public non-financial reporting. Objectives. The aim is to present a comprehensive research of information component of social responsibility of Russian large business enterprises, based on the analysis of their financial and non-financial reporting information. Methods. We employed methods of logical, statistical, comparative, and linguistic analysis. We also analyzed financial and public non-financial reports of Russian metallurgical companies. Special attention was paid to the availability and completeness of presented social disclosures. The study investigates annual financial statements and public non-financial statements for 2018–2020. Results. We offer a systems approach to the study and assessment of social responsibility, based on the analysis of the content of selected indicators, formulate recommendations that are necessary to increase the social responsibility of companies through improving the quality of content of reporting information and its orientation to solving global social problems. The findings enabled to reveal the areas of social information disclosure that are most significant for increasing the validity of investment decisions. Conclusions. The identified top social problems are in the focus of attention of economic entities; the dynamics of the quality of disclosures in corporate reports over the past three years has been positive. The trend in the development of non-financial reporting standards in terms of completeness and comprehensive nature of social disclosures enables to count on gradual overcoming of existing problems.

scholarly journals The Relationsip Between Corporate Social Responsibility Through Financial Reporting Quality

2022 ◽  
Vol 2 (3) ◽  
pp. 134-143
Author(s):  
Rizalnur FIRDAUS ◽  
Tio Arriela DOLOKSARIBU ◽  
Nova Dwi HERNANIK
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Reporting ◽  
Significant Relationship ◽  
Value Relevance ◽  
Reporting Quality ◽  
Manufacturing Companies ◽  
Corporate Social ◽  
The Impact

This study aims to examine the impact of Corporate Social Responsibility on the Quality of Financial Reporting in manufacturing companies in Indonesia. The research sample consisted of 75 manufacturing companies that were observed from 2017 to 2019. This study uses a regression data panel to test the effect of Corporate Social Responsibility (CSR) which is calculated by using a dummy variable on the Quality of Financial Reporting (FRQ) which uses a measure consisting of value relevance (VR), acrual quality (AQ) and earning persistence (EP). The results of research on manufacturing companies in Indonesia indicate that there is a positive and significant relationship between Corporate Social Responsibility and value relevance. The results of research on manufacturing companies in Indonesia indicate that there is a positive and significant relationship between Corporate Social Responsibility and accrual quality. The results of research on manufacturing companies in Indonesia show that there is a positive and significant relationship between Corporate Social Responsibility and earning persistence.

scholarly journals Sustainable Energy Development, Financial Reporting And Its Attachment To Corporate Social Responsibility

2022 ◽  
Vol 2 (3) ◽  
pp. 257-265
Author(s):  
Dwi ORBANINGSIH
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Financial Reporting ◽  
Sustainable Energy ◽  
Reporting Quality ◽  
Energy Development ◽  
Manufacturing Companies ◽  
Corporate Social ◽  
The Impact

This study intends to examine the impact of Corporate Social Responsibility on the Quality of Financial Reporting and Sustainable Energy Development in manufacturing companies in Indonesia. The research sample has it amounts of 75 manufacturing companies starting from 2017 to 2019. This study uses a regression data panel to examine the effect of Corporate Social Responsibility which is calculated with a dummy variable on the Quality of Financial Reporting. The research results on manufacturing companies in Indonesia show that there is a positive and significant relationship between Corporate Social Responsibility and Financial Reporting Quality and Sustainable Energy Development. The results of this study are expected to benefit practitioners in the operational focus of CSR, which is associated with the quality of financial reporting and does not abandon its energy sustainability development. Furthermore, the results of this study can be used as the basis for forming policies related to sustainable business issues and having a good impact on the environment and the finances of a company.

scholarly journals Stakeholder Expectation of Corporate Social Responsibility Practices: A Case Study of PWiK Rybnik, Poland

Energies ◽  
2021 ◽  
Vol 14 (11) ◽  
pp. 3337
Author(s):  
Aleksandra Kuzior ◽  
Józef Ober ◽  
Janusz Karwot
Keyword(s):  
Quality Of Life ◽  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Water Supply ◽  
Research Problem ◽  
Point Of View ◽  
Educational Activities ◽  
External Stakeholders ◽  
Corporate Social

Practices of corporate social responsibility (CSR), especially in organizations providing key services, related to the supply of fuel, water and energy, are extremely important from the point of view of identifying stakeholders with the functioning of enterprises in line with the principles of a closed loop economy. The article discusses the origins and evolution of the concept of corporate social responsibility, with particular emphasis on the water supply and sewage industry. The research problem was the perception and expectations of stakeholders toward prosocial activities of PWiK Rybnik (Sewage and Water Supply Ltd. Rybnik). The hypothesis assumed in the study was that the external stakeholders of PWIK Rybnik positively assess the company’s involvement in the tasks carried out as part of corporate social responsibility, they notice the involvement in educational activities and additional initiatives of PWIK that improve the quality of life of its inhabitants. For the purpose of this study, a quantitative method was used. For the purpose of the survey, the authors’ questionnaire “Survey of customers’ opinions on the activities undertaken by PWiK Rybnik” was created. The surveys conducted confirmed the hypothesis that the external stakeholders of PWIK Rybnik positively assess the company’s involvement in the tasks performed as part of corporate social responsibility; they notice the involvement in educational activities and additional initiatives of PWIK that improve the quality of life of its inhabitants. The results of the research made it possible to formulate guidelines for the operation of water supply and sewage companies in accordance with corporate social responsibility in the light of the opinions of their stakeholders.

Do Negative Corporate Social Responsibility Events Signal Financial Misreporting? — Empirical Finding from Taiwan

2021 ◽  
Vol 24 (01) ◽  
pp. 2150004
Author(s):  
Ching-Lung Chen ◽  
Hann-Pyng Wang ◽  
Hung-Shu Fan ◽  
Shiu-Chieh Chiu
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Cash Flow ◽  
Financial Reporting ◽  
Internal Control ◽  
Empirical Finding ◽  
Internal Controls ◽  
Control Rights ◽  
Cash Flow Rights ◽  
Corporate Social

This study examines whether negative corporate social responsibility events (NCSRs) signal potential firm misreporting and pending financial reporting restatements. Without formal opinions on the effectiveness of internal controls over financial reporting in Taiwan, we hypothesize NCSRs can represent and/or signal a firm’s internal control weakness, which may in turn result in poor financial reporting. Note that the concern with controlling owners expropriating wealth through ineffective internal controls is given important weight by investors and regulators. We further examine whether the signaling function of NCSRs is more pronounced in contexts with a serious agency problem, such as is found in the high divergence of control and cash flow rights case (denoted as high excess control rights) in Taiwan. Empirical results indicate that, as conjectured, incidence of NCSRs is positively associated with the likelihood of reporting restatements. Further evidence reveals that this result is particularly pronounced in the high divergence of control and cash-flow rights subsample test. We demonstrate several diagnostic tests and show the results are robust in various specifications.

scholarly journals Corporate Social Responsibility (CSR) of Innovative Pharmaceutical Corporations. The Case of BIOGEN

2018 ◽  
Vol 21 (3) ◽  
pp. 45-62 ◽  
Author(s):  
Janina Witkowska
Keyword(s):  
Corporate Social Responsibility ◽  
Pharmaceutical Industry ◽  
Social Responsibility ◽  
Corporate Philanthropy ◽  
Developed Countries ◽  
Orphan Drugs ◽  
Pharmaceutical Firms ◽  
Life Saving ◽  
Corporate Social

The aim of this paper is to discuss the common features and specificity of Corporate Social Responsibility (CSR) practices of innovative transnational corporations (TNCs) acting in the pharmaceutical industry. The innovativeness of pharmaceutical firms is understood here as their ability to make a breakthrough in the treatment of rare, incurable diseases. The examination of the issue leads to the conclusion that the specificity of CSR in this industry is related to the contradiction between the economic and social/ethical aspects of innovation processes in this field. A key issue of CSR in the innovative pharmaceutical industry seems to be the pricing of drugs, especially orphan and ultra‑orphan drugs, resulting in patients from less developed countries having limited access to life‑saving medicines or those that improve the quality of life. Corporations use their monopolistic position to set extremely high prices. However, without the market/marketing exclusivity offered to pharmaceutical firms by the law, orphan drugs would probably not be developed, produced and commercialized. Traditional CSR practices (corporate philanthropy, community and neighborhood programs, volunteerism etc.) cannot be treated as sufficient ‘compensation’ for the high prices of medicines. Real, true CSR in the innovative pharmaceutical industry requires either abandoning or reducing extreme monopolistic privileges and offering medicines for rare diseases at lower prices.

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