ANALYSING THE LINK BETWEEN CSR REPORTING AND FINANCIAL PERFORMANCE VARIABLES OF BELGRADE STOCK EXCHANGE COMPANIES

Corporate Social Responsibility (CSR) reporting has been subject of various discussions of academicians and accounting practitioners. Although the importance of CRS reporting is not under question, the quality of disclosed non-financial information is still under review. In the light of the new Serbian Law on Accounting (Official Gazette of the Republic of Serbia 73/2019) and EU Directive 2014/95 requirements regarding non-financial information, this article investigates the state of non-financial reporting development in Serbian companies in the pre-EU Directive period in order to give suggestions to policymakers how to establish and structure the implementation of the EU Directive and expected challenges on this path. The current state of development of non-financial activities is measured by using content analysis and by creating a non-financial reporting index, namely the CSR index for the Serbian companies listed at Belgrade Stock Exchange. CSR index has been corelated with accounting variables (size of the company, auditor type (non/Big 4), revenue and financial results) in order to get deeper understanding of its value drivers. Serbian companies, listed as large, audited by Big 4 and with better financial performance variables, are companies with the higher value of the CSR index and have a higher quality of non -financial reporting. Big companies can serve as a benchmark for the rest of the companies in the economy, but also those companies will have fewer challenges in the EU non-financial Directive implementation in the post-Directive period. Therefore, Serbian policymakers should focus their attention and implementation procedures on the rest of the economy struggling with the non-financial reporting.

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ANALISIS KOMPARASI KINERJA KEUANGAN PERUSAHAAN SEBELUM DAN SESUDAH PENERAPAN SAK KONVERGENSI IFRS (Studi Kasus pada Perusahaan Farmasi yang Terdaftar di BEI)

Jurnal Riset Keuangan Dan Akuntansi ◽

10.25134/jrka.v2i1.449 ◽

2016 ◽

Vol 2 (1) ◽

Author(s):

Alin Adinda Herma Wiharno Teti Rahmawati

Keyword(s):

Financial Performance ◽

Stock Exchange ◽

Accounting Standards ◽

Financial Information ◽

International Accounting Standards ◽

Reporting Standards ◽

Before And After ◽

Quality Of Reports ◽

The Difference

Convergenceof IFRS into local accounting standards became a necessity for each country. This is due to the rapid developmental technology and globalization are demanding international accounting standards, with the aim of producing financial information with good quality and generally accepted. The application of IFRS as reporting standards is believed to improve the quality of reports keua-ngan company basis in the measurement of financial performance.The research objective was to determine the difference in financial performance as measured by the ratio of profitability, liquidity, solvency, and activities before and after the implementation of IFRS on the Company's GAAP ConvergencePharmaceuticals Listed in Indonesia Stock Exchange Period 2007-2014.The results showed that tdak there are significant differences related to the financial performance as measured by the ratio of profitability, liquidity, solvency, as well as the ratio of activity before and after the implementation of IFRS on the Company's GAAP ConvergencePharmaceuticals Listed in Indonesia Stock Exchange Period 2007-2014.

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Regulating non-financial reporting: evidence from European firms’ environmental, social and governance disclosures and earnings risk

Meditari Accountancy Research ◽

10.1108/medar-11-2020-1086 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Muhammad Arif ◽

Christohper Gan ◽

Muhammad Nadeem

Keyword(s):

Financial Reporting ◽

Positive Impact ◽

Content Type ◽

Eu Directive ◽

Before And After ◽

The Difference ◽

Earnings Risk ◽

The Impact ◽

The Eu

Purpose Motivated by the enactment of non-financial reporting regulations by the European Parliament, this paper aims to investigate the impact of European Union (EU) directive 2014/95/EU on the quantity of environmental, social and governance (ESG) disclosures by the S&P Europe 350 index firms. This study also investigates whether the implementation of the non-financial information (NFI) reporting regulations influences the association between ESG disclosures and firms’ earnings risk. Design/methodology/approach To measure the impact of mandatory regulations on the quantity of ESG disclosures, this study estimates the average treatment effects using a propensity weighted sample. Then this study uses the difference-in-differences method to estimate the differences in the association between ESG disclosures and earning risk before and after implementation of the EU directive. Findings The results show a significant positive impact of the EU directive on the quantity of ESG disclosures for the sample European public-interest entities, which indicates that the mandatory NFI reporting requirements could boost the availability of increasingly demanded ESG related information. The enhanced association between the ESG disclosures and firms’ earnings risk during the post-directive period reveals that mandating NFI reporting also increases the quality of ESG disclosures. Originality/value Using the legitimacy and decision-usefulness theories, this study provides novel evidence concerning the impact of the EU directive on the quantity and quality of ESG disclosures.

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Social responsibility reporting standards

Accounting challenges for sustainability and innovations ◽

10.18559/978-83-8211-055-5/02 ◽

2021 ◽

pp. 27-43

Author(s):

Ana Rep ◽

Nikolina Dečman

Keyword(s):

Social Responsibility ◽

Financial Reporting ◽

Public Interest ◽

Sustainability Reporting ◽

Financial Information ◽

Csr Reporting ◽

Voluntary Standards ◽

Sustain Ability ◽

Corporate Social

It is well known that today, in addition to already established financial reporting, multi-national companies are paying more and more attention to non-financial reporting on social, eco-nomic, environmental and governmental issues. Corporate Social Responsibility (CSR) reporting is still predominantly voluntary, and it is not standardized. However, there are various international organizations which have been developing frameworks and voluntary standards for non-financial reporting. Those organizations have been putting a sizable amount of effort, time, and knowledge in order to offer some specific solutions to interested organizations preparing CSR reports. Pro-posed standards, guidelines, and frameworks serve as tools for simplifying CSR reporting. In that sense, the most important providers of sustainability reporting guidance, such as GRI, OECD, United Nations Global Compact, International Organization for Standardization, certainly stand out. A significant contribution to promoting the importance of sustainability reporting was also made by the Non-Financial Reporting Directive (2014/95/EU) which obliged large public interest companies with over 500 employees to disclose certain non-financial information. According to the analysis of the content and scope of the most important frameworks and standards of sustain-ability reporting, it can be confirmed that they have certainly contributed to improving the quality of non-financial reporting.

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Audit Quality And Accrual Quality: Do Big 4 Auditors Indeed Enhance Accrual Quality Of ‘Powerful’ Clients?

Journal of Applied Business Research (JABR) ◽

10.19030/jabr.v33i2.9908 ◽

2017 ◽

Vol 33 (2) ◽

pp. 343-350 ◽

Cited By ~ 2

Author(s):

Sorah Park

Keyword(s):

Financial Reporting ◽

Audit Quality ◽

Stock Exchange ◽

Accrual Quality ◽

External Auditors ◽

Big 4 ◽

Accounting Scandals ◽

Quality Of Accounting Information ◽

Audit Reports

External auditors are considered ‘watchdogs’ which closely monitor corporate financial reporting process and provide guidelines for investors and financial institutions. However, recent accounting scandals in Korea indicate that external auditors may cater their audit reports to their clients’ needs. Based on a sample of listed companies on the Korea Stock Exchange from 2001 to 2010, this study finds the evidence consistent with such conjecture. First, large business conglomerates in Korea (so called ‘chaebols’) audited by Big 4 have lower accrual quality than the others, indicating that Big 4 auditors may not serve as watchdogs to enhance accrual quality of ‘powerful’ clients. However, powerful clients who pay greater non-audit service fees to Big 4 auditors have higher accrual quality than the others. This result suggests that non-audit services provided by Big 4 may not necessarily harm the quality of accounting information, contrary to the traditional view in the literature.

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Analysis on Sustainability Reporting and Earnings Management Practices. Evidence from an Emerging Economy

10.20944/preprints202106.0203.v1 ◽

2021 ◽

Author(s):

Elena Nechita

Keyword(s):

Earnings Management ◽

Financial Reporting ◽

Management Practices ◽

Stock Exchange ◽

Sustainability Reporting ◽

Income Smoothing ◽

Financial Information ◽

Linear Regression Models ◽

The Sustainable Development ◽

Eu Directive

In light of the worldwide spreading requirements related to the disclosure of non-financial information, which are aligning to the Sustainable Development Goals (SDGs) developed by the United Nations (UN) in 2015, the study aims to analyse the influence of sustainability and other non-financial reporting on companies’ engagement in earnings management practices, through a pre-post adoption of European Directive 2014/95/EU comparative analysis for firms listed on the Bucharest Stock Exchange (BSE) in the period 2015-2019. To conduct the investigation, the research involves the assessment and analysis of three earnings management metrics resulted by running multiple linear regression models on a sample of 31 companies listed on BSE. Research findings emphasise a decrease in the use of income smoothing practices by sampled companies in the post-adoption period 2017-2019, compared to the period preceding the implementation of the EU directive related to mandatory disclosure of non-financial information, 2015-2016. Thus, firms characterised by a higher transparency in terms of sustainability reporting are less inclined to engage in earnings management practices. This research complements the literature in the field of sustainability reporting and earnings management, providing empirical evidence on the significance and impact of publishing non-financial information.

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Ensuring the Quality of Information by Creating a Sustainable Framework in the Context of CSR Reporting

Advances in Finance, Accounting, and Economics - CSR and Management Accounting Challenges in a Time of Global Crises ◽

10.4018/978-1-7998-8069-1.ch001 ◽

2021 ◽

pp. 1-34

Author(s):

Nicoleta Farcane ◽

Ovidiu Constantin Bunget ◽

Rodica Blidisel ◽

Alin Constantin Dumitrescu ◽

Delia Deliu ◽

...

Keyword(s):

Financial Reporting ◽

Relevant Information ◽

Frame Of Reference ◽

Financial Information ◽

Daily Activities ◽

Quality Of Information ◽

Csr Reporting ◽

Reporting Framework ◽

Sustainability Reports

This chapter aims to identify basic pillars around which issues related to non-financial reporting are going to be outlined by testing the quality of information presented by the top 50 largest listed companies according to non-financial reporting criteria, considering the environment, human and social resources, human rights, and the fight against corruption. By highlighting the diversity of information disclosed by the corporations (i.e., the economic, social, and environmental impact caused by the daily activities carried out), common benchmarks that determine the quality assurance are ascertained. Research methods include quantitative analysis of the sustainability reports, along with the authors' observation regarding the existing frame of reference. Findings show that there is significant diversity in how non-financial information regarding CSR is disclosed. Modeling a unitary reporting framework could be the keystone to which companies could relate in ensuring a good correlation with users' need for accurate, reliable, and relevant information.

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Auditors’ perceptions of the impact of continuous auditing on the quality of Internet reported financial information in Egypt

Managerial Auditing Journal ◽

10.1108/maj-01-2014-0989 ◽

2016 ◽

Vol 31 (1) ◽

pp. 111-132 ◽

Cited By ~ 3

Author(s):

Hala M. G. Amin ◽

Ehab K. A. Mohamed

Keyword(s):

Financial Reporting ◽

Financial Information ◽

The Internet ◽

Continuous Auditing ◽

Chi Square ◽

Content Type ◽

Big 4 ◽

Audit Firms ◽

The Impact

Purpose – The purpose of this paper is to explore the perceptions of auditors in Egypt toward the role that continuous auditing (CA) can play in offsetting the challenges facing the quality of Internet-reported financial information. The paper also examines the impact of audit firm type and years of experience on these perceptions. Design/methodology/approach – Ninety-six auditors working in the Big 4 and large local audit firms are surveyed to attain their perceptions on the issues examined. Chi-square, Mann–Whitney and t-test are used to test the research hypotheses. Findings – The overall results indicate that the majority of auditors in Egypt agree that implementing CA can offset the challenges associated with the Internet financial reporting (IFR) environment. The results also reveal that there are significant differences between auditors working in Big 4 audit firms and those working in local firms regarding the perceptions of the effect of CA on some aspects of the timeliness of information. Research limitations/implications – The paper extends the stream of research on both CA and IFR that confirms that the widespread use of the Internet in disclosing financial information continues to be a worrisome problem for auditing firms. Practical implications – The paper provides insights into the challenges facing auditing in the IFR environment and how implementing CA can help offset these challenges. Originality/value – To the best of our knowledge, this paper is the first to examine issues related to CA in the IFR environment in the Middle East and, in particular, Egypt.

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Examining financial information reporting and behavior of listed companies in Iran

Journal of Management Development ◽

10.1108/jmd-08-2018-0249 ◽

2020 ◽

Vol 39 (9/10) ◽

pp. 945-962

Author(s):

Roya Izi ◽

Mansour Garkaz ◽

Parviz Sayeedi ◽

Alireza Matoufi

Keyword(s):

Financial Reporting ◽

Stock Exchange ◽

Reporting Quality ◽

Listed Companies ◽

Financial Information ◽

Equation Modeling ◽

Behavioral Characteristics ◽

Statistical Population ◽

Content Type

PurposeThe purpose of this research paper is to provide a model for reporting quality of financial information based on behavior of listed companies in Tehran Stock Exchange which is based on structural equation modeling approaches.Design/methodology/approachThis study uses applied research and postsemi experimental method of data collection in the field of proofing accounting research with deductive–inductive approach. The statistical population of this study includes the sample of 128 listed companies in the Tehran Stock Exchange between 2007 and 2017. The behavioral characteristics of managers (hidden variables) are measured by observable variables of myopia, opportunistic behavior and overconfidence of managers. Reporting quality of financial information is also investigated based on the scores accrued to each company and the announcement published by the Tehran Stock Exchange based on the companies' rating in terms of the quality of reporting and proper notification.FindingsAfter insuring the acceptable fitness of the measurement pattern and the structure of research in both approaches, structural equations modeling and regression, the results indicate that there is a significant negative relationship between the behavioral characteristics of managers and the reporting quality of financial information.Originality/valueAccountants have a critical and difficult responsibility of dealing with transactions and presenting them in the form of financial reports that can be used by interest groups to assess the performance of companies. This critical responsibility becomes meaningful when professional and ethical behaviors are the basis for disclosure of financial reporting. Based on the behavioral characteristics of disclosing financial reporting in emerging capital markets such as Iran, this study can be successful in developing new and theoretical literature in this field.

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Non-financial reporting in selected European countries

Accounting challenges for sustainability and innovations ◽

10.18559/978-83-8211-055-5/05 ◽

2021 ◽

pp. 73-90

Author(s):

Nikolina Dečman ◽

Petr Petera ◽

Marzena Remlein ◽

Ana Rep

Keyword(s):

Financial Reporting ◽

Financial Information ◽

Annual Reports ◽

Professional Background ◽

Financial Reports ◽

The Czech Republic ◽

Eu Member States ◽

Eu Directive ◽

The Republic ◽

The Eu

Directive 2014/95/EU gave the EU Member States a certain flexibility when transposing it into national law. Each Member State could, therefore, decide to introduce regulations of varying degrees of stringency. According to Directive 2014/95/EU, large companies have to publish reports on the policies they implement in relation to environmental protection, social responsibility and treatment of employees, respect for human rights, anti-corruption and bribery, diversity on company boards (in terms of age, gender, educational and professional background).In order to satisfy the EU rules, the Republic of Croatia has implemented into its legislation the provisions of the Directive 2014/95/EU regarding the disclosure of certain non-financial reporting, by amending the Accounting Act. Some companies registered in Croatia have been disclosing some of the required non-financial information in their reports even before the effective date of the Direc-tive, but conducted studies conclude that there is still a room for improvements.This chapter provides a short overview of regulation of non-financial reporting in the Czech Republic as well as overview of previous research on non-financial reporting in this country. The results of the research present that few Czech companies publish standalone corporate responsi-bility report. More popular is the disclosure of non-financial information within annual financial reports but even this approach is pursued by less than half of respondents. The amount of disclosed information in annual reports is mostly up to 5 pages. 11 companies (10.38%) provide more than 5 pages of environmental information and only 7 companies (6.60%) provide more than 5 pages of social information.In Poland, the requirement to present non-financial information relating to CSR was introduced by the Accounting Act. Public trust entities are required to present in the report on the activities a separate part called “Statement on non-financial information”. In 2017, the Polish Standard of Non-Financial Information (SIN, 2017) was published to help enterprises fulfil their obligations under the EU Directive.

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

Social Responsibility Journal ◽

10.1108/srj-04-2020-0156 ◽

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.

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