Corporate Reporting of Nonfinancial Leading Indicators of Economic Performance and Sustainability

2012 ◽  
Vol 26 (1) ◽  
pp. 65-90 ◽  
Author(s):  
Jeffrey R. Cohen ◽  
Lori L. Holder-Webb ◽  
Leda Nath ◽  
David Wood
Keyword(s):  
Economic Performance ◽  
Voluntary Disclosure ◽  
Data Availability ◽  
Leading Indicators ◽  
Nonfinancial Information ◽  
The Public ◽  
Corporate Reporting ◽  
Recent Developments ◽  
Alternative Sources ◽  
Corporate Social

SYNOPSIS The call for disclosure of nonfinancial information has grown in response to the awareness that financial statements omit salient information about the company (Adams et al. 2011). This study follows earlier studies of nonfinancial disclosures of governance and corporate social responsibility information (Holder-Webb et al. 2008, 2009) and examines the public voluntary disclosure of a set of leading indicators of economic performance and sustainability of earnings provided during 2004 by a sample of 50 publicly traded firms across five industries. The results indicate that, among the sample firms, there remains a lack of rigorous and expansive disclosure of this type of information and that considerable variability exists in disclosure practice based on both industry and size. For example, companies disclose a wide variety of nonfinancial information both through mandatory filings such as 10-Ks and through alternative sources such as investor promotion materials and company websites, with the most frequent types of disclosures being concerned with information pertaining to market share and innovation. We conclude by discussing the role of this study within recent developments in integrative reporting (Adams et al. 2011) and suggest that these types of disclosures would benefit from the availability of assurance services. Data Availability: All information used in this paper is available from public sources.

Investor Sentiment for Corporate Social Performance

2018 ◽  
Vol 94 (4) ◽  
pp. 401-420 ◽  
Author(s):  
James P. Naughton ◽  
Clare Wang ◽  
Ira Yeung
Keyword(s):  
Corporate Social Performance ◽  
Social Performance ◽  
Abnormal Returns ◽  
Investor Sentiment ◽  
Data Availability ◽  
Time Varying ◽  
The Public ◽  
Valuation Uncertainty ◽  
Corporate Social ◽  
Jel Classifications

ABSTRACT We document time-varying investor sentiment for corporate social responsibility (CSR) performance. We show that announcements of CSR activities generate positive abnormal returns during periods when investors place a valuation premium on CSR performance. In addition, we find that firms boost CSR performance in response to investor sentiment, and that this response is more pronounced for those firms that are more inclined to respond to investor sentiment due to valuation uncertainty and investor horizon. Our results suggest that investor sentiment plays a role in firms' commitment to CSR. JEL Classifications: M41; D82; G14; G30; G31; G32; G34. Data Availability: Data are available from the public sources cited in the text.

scholarly journals Comprehensive Approach to Relevant and Reliable Reporting in Europe: A Dream Impossible?

2020 ◽  
Vol 12 (13) ◽  
pp. 5277 ◽  
Author(s):  
Jukka Mähönen
Keyword(s):  
Financial Reporting ◽  
Regulatory Reform ◽  
Legal Framework ◽  
Financial Accounting ◽  
Extensive Literature ◽  
The European Union ◽  
Corporate Reporting ◽  
Recent Developments ◽  
Corporate Social ◽  
The Impact

Corporate reporting and governance are interlinked: Accounting and reporting inventions created the modern company, and without the modern company there is no entity from which to report. Due to its raison d’etre, reporting remained finance-centered, to protect financial capital providers. From the 1970’s, the question of the interests of ‘stakeholders’ emerged, with attempts of ‘social reporting’, ‘corporate social responsibility’, ‘environmental’, and ‘social and environmental’ and finally ‘integrated’ accounting and reporting. These trends are reflected also in the European Union legal framework, both in regulation of especially financial intermediaries and the ‘non-financial’ reporting. This article is based on an extensive literature review, research conducted in the Sustainable Market Actors for Responsible Trade (SMART) project, and socio-legal and economic empirical research based conceptual analysis of the impact of these reporting systems and their relationship to financial accounting and reporting. The result of the research is that sustainability is reduced to focus on institutional investors and other members in the investment supply chain, and climate change issues only, and new regulatory solutions are required. Based on the most recent developments in EU law and in European jurisdictions, possible paths forward are envisaged to encourage sustainability in reporting and assurance, and through that, in governance. As an outcome a set of regulatory reform proposals are given based on the SMART recommendations.

Nonfinancial Disclosure and Analyst Forecast Accuracy: International Evidence on Corporate Social Responsibility Disclosure

2012 ◽  
Vol 87 (3) ◽  
pp. 723-759 ◽  
Author(s):  
Dan S. Dhaliwal ◽  
Suresh Radhakrishnan ◽  
Albert Tsang ◽  
Yong George Yang
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Forecast Accuracy ◽  
Data Availability ◽  
Financial Disclosure ◽  
Analyst Forecast ◽  
Nonfinancial Information ◽  
Firm Financial Performance ◽  
Corporate Social ◽  
The Relationship

ABSTRACT We examine the relationship between disclosure of nonfinancial information and analyst forecast accuracy using firm-level data from 31 countries. We use the issuance of stand-alone corporate social responsibility (CSR) reports to proxy for disclosure of nonfinancial information. We find that the issuance of stand-alone CSR reports is associated with lower analyst forecast error. This relationship is stronger in countries that are more stakeholder-oriented—i.e., in countries where CSR performance is more likely to affect firm financial performance. The relationship is also stronger for firms and countries with more opaque financial disclosure, suggesting that issuance of stand-alone CSR reports plays a role complementary to financial disclosure. These results hold after we control for various factors related to firm financial transparency and other potentially confounding institutional factors. Collectively, our findings have important implications for academics and practitioners in understanding the function of CSR disclosure in financial markets. Data Availability: The data are publicly available from the sources identified in the paper.

scholarly journals Corporate Social Responsibility and the Public Health Imperative: Accounting and Reporting on Public Health

2021 ◽  
Author(s):  
Obiamaka Adaeze Nwobu
Keyword(s):  
Public Health ◽  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Health Issues ◽  
Health It ◽  
New Normal ◽  
The Public ◽  
Corporate Reporting ◽  
Business Operations ◽  
Corporate Social

It has never been more urgent for corporate entities to ensure that they are accountable for public health issues arising from their business operations. Corporate social responsibility is constantly being redefined from what it used to be in terms of corporate responsibility to people and the planet. This redefinition is mainly due to issues affecting public health. Hence, it is important for corporate entities to account for how their business operations affect public health. It is also important for corporate entities to account for how public health issues affect their business operations. The nexus between corporate social responsibility and public health could also create a ‘new normal’ by accounting and corporate reporting on public health.

Should Repurchase Transactions be Accounted for as Sales or Loans?

2012 ◽  
Vol 26 (4) ◽  
pp. 657-679 ◽  
Author(s):  
Justin Chircop ◽  
Paraskevi Vicky Kiosse ◽  
Ken Peasnell
Keyword(s):  
Financial Statements ◽  
Data Availability ◽  
Bankruptcy Law ◽  
The Public ◽  
Current Accounting ◽  
Lehman Brothers ◽  
Recent Developments ◽  
Accounting Rules ◽  
Repurchase Agreements ◽  
The U.S

SYNOPSIS: In this paper, we discuss the accounting for repurchase transactions, drawing on how repurchase agreements are characterized under U.S. bankruptcy law, and in light of the recent developments in the U.S. repo market. We conclude that the current accounting rules, which require the recording of most such transactions as collateralized loans, can give rise to opaqueness in a firm's financial statements because they incorrectly characterize the economic substance of repurchase agreements. Accounting for repurchase transactions as sales and the concurrent recognition of a forward, as “Repo 105” transactions were accounted for by Lehman Brothers, has furthermore overlooked merits. In particular, such a method provides a more comprehensive and transparent picture of the economic substance of such transactions. JEL Classifications: M41; G21; G38. Data Availability: Data are available from the public sources identified in the paper.

Market Valuation Consequences of Avoiding Taxes While also Being Socially Responsible

2018 ◽  
Vol 31 (2) ◽  
pp. 75-94
Author(s):  
Kerry K. Inger ◽  
Brian Vansant
Keyword(s):  
Tax Avoidance ◽  
Equity Market ◽  
Shareholder Wealth ◽  
Data Availability ◽  
Market Valuation ◽  
Socially Responsible ◽  
Public Firms ◽  
The Public ◽  
Market Participants ◽  
Corporate Social

ABSTRACT In this study, we examine the effects of tax avoidance and Corporate Social Responsibility (CSR) activities on equity market valuation. Economic theory suggests that managers should avoid taxes through any legal means (Friedman 1970), and that CSR activities are of value to the extent that shareholder wealth is maximized (Hales, Matsumura, Moser, and Payne 2016). We hypothesize that while equity market participants may positively value both CSR and tax avoidance, these two actions are viewed as inconsistent with one another when engaged upon contemporaneously, where increased activity of one diminishes the value of the other. Results, using a sample of U.S. public firms during years 2000–2013, support our expectation and show a negative interaction between CSR and tax avoidance. A series of robustness checks provide additional evidence consistent with investors viewing CSR and tax avoidance as contradictory. JEL Classifications: G32; M41; M49; M410. Data Availability: Data are available from the public sources cited in the text.

Institutional Ownership, Peer Pressure, and Voluntary Disclosures

2017 ◽  
Vol 93 (4) ◽  
pp. 283-308 ◽  
Author(s):  
Yupeng Lin ◽  
Ying Mao ◽  
Zheng Wang
Keyword(s):  
Voluntary Disclosure ◽  
Peer Pressure ◽  
Institutional Ownership ◽  
Data Availability ◽  
Management Forecasts ◽  
Voluntary Disclosures ◽  
Index Funds ◽  
The Public ◽  
Industry Peers ◽  
Identification Strategy

ABSTRACT We document peer effect as an important factor in determining corporate voluntary disclosure policies. Our identification strategy relies on a discontinuity in the distribution of institutional ownership caused by the annual Russell 1000/2000 index reconstitution. Around the threshold of the Russell 1000/2000 index, the top Russell 2000 index firms experience a significant jump in institutional ownership compared with their closely neighbored bottom Russell 1000 index firms due to index funds' benchmarking strategies. The increase in institutional ownership and resultant improvement in the information environment of the top Russell 2000 index firms create pressures on their industry peers to increase voluntary disclosures. Consistent with this prediction, we find that the discontinuously higher institutional ownership of the top Russell 2000 index firms significantly increases industry peers' likelihood and frequency of issuing management forecasts. Further analyses show that such an effect could be driven by firms' incentive to compete for capital. JEL Classifications: G23; G34; M41; D80. Data Availability: Data are available from the public sources cited in the text.

Retail Investors’ Perceptions of the Decision-Usefulness of Economic Performance, Governance, and Corporate Social Responsibility Disclosures

2011 ◽  
Vol 23 (1) ◽  
pp. 109-129 ◽  
Author(s):  
Jeffrey Cohen ◽  
Lori Holder-Webb ◽  
Leda Nath ◽  
David Wood
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Economic Performance ◽  
Third Party ◽  
Socially Responsible ◽  
Nonfinancial Information ◽  
Socially Responsible Investments ◽  
Retail Investors ◽  
The Future ◽  
Corporate Social

ABSTRACT: Academic literature and the business press have placed increased attention on the corporate disclosure of nonfinancial information. This study uses a survey of 750 retail investors to examine perceptions about indicators of economic performance, corporate governance policies and performance, and corporate social responsibility. Survey results indicate that retail investors currently are most concerned with economic performance information, followed by governance, and then corporate social responsibility information. Those respondents who currently hold socially responsible investments use more of all three types of nonfinancial information than respondents who currently do not hold socially responsible investments. Further, retail investors clearly prefer to obtain information about corporate social responsibility information from a third-party source and governance information from an audited or regulated document, while they use both sources to garner information about indicators of economic performance. Respondents expressed an interest in increasing their use of nonfinancial information in the future. When respondents were asked to indicate the specific types of information they had the greatest interest in using in the future, economic performance indicators such as market share, customer satisfaction, and product innovation information were predominant.

Accessing Cloud Data to Expand Research and Analytical Opportunities: An Example using IRS/AWS Data for Nonprofit Organizations

2020 ◽  
Vol 18 (2) ◽  
pp. 171-183
Author(s):  
Chengzhang Wu ◽  
Richard B. Dull
Keyword(s):  
Nonprofit Organizations ◽  
Design Science ◽  
Data Availability ◽  
Nonfinancial Information ◽  
Cloud Data ◽  
The Public ◽  
Partial Data ◽  
Amazon Web Services ◽  
Pdf Format ◽  
Jel Classifications

ABSTRACT The IRS Form 990 provides a rich set of financial and nonfinancial information about nonprofit organizations. Historically, these returns were available to researchers in PDF format, or partial data were available through information aggregators. Beginning in 2011, the forms were e-filed in an XML format, and those files are made available to the public at no monetary cost. To date over 2.6 million of these returns have been filed and are currently available online. This study uses the design science paradigm to describe the process of accessing the forms from AWS (Amazon Web Services), examining XML structures, transforming the data, and loading that data into an updatable database. The resulting database is then used to demonstrate the artifact's effectiveness through a variety of inquiries. The process extends researchers' capabilities to use newly available data to investigate accounting, governance, and other questions that were not previously feasible to consider. Data Availability: Data are available from the public sources cited in the text. JEL Classifications: M41; M48; M49.

Private Litigation Costs and Voluntary Disclosure: Evidence from the Morrison Ruling

2018 ◽  
Vol 94 (3) ◽  
pp. 303-327 ◽  
Author(s):  
James P. Naughton ◽  
Tjomme O. Rusticus ◽  
Clare Wang ◽  
Ira Yeung
Keyword(s):  
Voluntary Disclosure ◽  
Causal Effect ◽  
Data Availability ◽  
Supreme Court Ruling ◽  
Securities Litigation ◽  
Listed Firms ◽  
The Public ◽  
Country Level ◽  
The Right ◽  
Private Litigation

ABSTRACT We examine the causal effect of expected private litigation costs on voluntary disclosure using a natural experiment, the Supreme Court ruling in Morrison v. National Australia Bank. Even though this ruling had no effect on what constituted fraudulent conduct for the purpose of securities litigation, it significantly reduced the expected private litigation costs for foreign cross-listed firms by reducing the pool of potential claimants. It did so by eliminating the right of shareholders who purchased shares on non-U.S. exchanges from seeking compensation in U.S. courts. In the post-Morrison period, we find consistent evidence showing a decrease in voluntary disclosure using analyses that exploit the varying impact of the ruling based on both firm- and country-level attributes. Unlike a number of prior studies, we find that the positive relation between litigation and disclosure does not depend on the direction of the news. JEL Classifications: G15; G18; M41. Data Availability: Data are available from the public sources cited in the text.

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