Accounting, performance and accountability challenges in hybrid organisations: a value creation perspective

PurposeDrawing upon theoretical insights on value creation perspectives, the authors aim to advance the understanding of performance and accountability in different hybrid organisations.Design/methodology/approachThe authors conceptualise common theoretical origins of hybrid organisations and how they create and enact value, by reflecting on the Accounting, Auditing and Accountability Journal (AAAJ) special issue articles. Furthermore, the authors propose an agenda for future research into accounting, performance and accountability for hybrid organisations.FindingsHybrid organisations can be conceptualised through their approaches to value creation (mixing, compromising and legitimising). This article provides a more detailed understanding of accounting, performance and accountability changes in hybrid organisations.Practical implicationsThis contribution also has relevant practical implications for actors, such as politicians, managers, professionals, auditors, controllers and accountants, encased in various hybrid organisations, policy contexts and multi-faceted interfaces between public, private and civil society.Originality/valueHybridity lenses reveal novel connections between different types of hybrid organisations and how they create and enact multiple values.

Accounting Performance Goals in CEO Compensation Contracts and Corporate Risk Taking

This study provides the first large-sample archival evidence on the impact of three commonly used accounting performance goals (thresholds, targets, and maximums) in CEO compensation contracts on corporate risk taking. Using proxy statement disclosure on performance goals for CEOs of U.S. public companies, we find that lower thresholds and higher maximums are associated with greater corporate risk taking, and these results are more pronounced when CEOs have greater incentives to achieve accounting performance goals or have lower innate risk aversion. In addition, we find that target difficulty is not significantly associated with corporate risk taking after controlling for thresholds and maximums. Finally, we find that CEO compensation contracts are more likely to have lower thresholds and higher maximums when risk taking is more value-enhancing or when R&D investment is more profitable, consistent with boards setting performance goals to induce an appropriate amount of corporate risk taking. Our study contributes to the accounting literature on target setting and corporate risk taking by identifying accounting performance goals as a tool in executive compensation contract design to influence risk taking. This paper was accepted by Suraj Srinivasan, accounting.

Winning the Australasian Reporting Awards: An analysis of accounting and economic outcomes

Despite the intuition that winning reporting awards should be primarily based on reporting quality, we find no evidence that Australian Securities Exchange (ASX)-listed firms winning the Australasian Reporting Awards (ARA) over the period 2003–2016 exhibit higher financial reporting quality. However, we find that winning reporting awards is associated with higher annual report readability. Next, firms winning the ARA neither show superior future accounting performance nor higher market valuation. We also find that investors are not compensated with higher stock returns. Taken together, our findings suggest that the criteria applied to decide the ARA winners capture higher levels of readability but do not correlate with common academic signals of financial reporting quality. Users of the ARA outcomes should also be cautious with the immediate interpretation that the ARA are reliable signals of superior corporate performance. JEL Classification: D82, L15, M41

PENGARUH PENGUNGKAPAN SHARI’AH CORPORATE SOCIAL RESPONSIBILITY TERHADAP KINERJA KEUANGAN

ABSTRACTThis study aims to test and analyze the effect of Shari’ah Corporate Social Responsibility (SCSR) on the financial performance of componies listed in the Jakarta Islamic Index. This study uses purposive sampling as a sampling technique for data contained in annual report and sustainable report period of 2016-2019. Variabel data sources are obtained from the Indonesia Stock Exchange and the websites of related companies. The company selected as a sample are 17 which will then be analyzed using descriptive statistics, classing assumption tests an hypothesis tests. The result Showed that SCSR affects accounting performance, but has no effect on the company’s market performance.Keywords: Financial Performance, Responsibility, Shari’ah Enterprise TheoryABSTRAKPenelitian ini bertujuan untuk menguji dan menganalisis pengaruh Shari’ah Corporate Social Responsibility (SCSR) terhadap kinerja keuangan perusahaan yang terdaftar di Jakarta Islamic Index. Penelitian ini menggunakan purposive sampling sebagai teknik pengambilan sampel untuk data yang terdapat dalam laporan tahunan dan laporan berkelanjutan periode 2016-2019. Sumber data variabel diperoleh dari Bursa Efek Indonesia dan website perusahaan terkait. Perusahaan yang dipilih sebagai sampel sebanyak 17 perusahaan yang selanjutnya akan dianalisis menggunakan statistik deskriptif, uji asumsi pengelompokan dan uji hipotesis. Hasil penelitian menunjukkan bahwa SCSR berpengaruh terhadap kinerja akuntansi, tetapi tidak berpengaruh terhadap kinerja pasar perusahaan.Kata Kunci: Kinerja Keuangan, Responsibility, Teori Shari’ah Enterprise

Impact of Shareholders’ Activism on Governance Practices and Firm Performance in Pakistan: A Response for Family Controlled Firms

By taking a sample of 150 non-financial firms listed on PSX, this study has empirically examined the impact of ownership structure on firm performance while considering multiple dimensions. This study employed the system GMM econometric technique to examine the association between ownership structure and firm performance. According to the computed results of the study, family ownership puts a positive and highly significant impact on the market performance of the firm. It has also found a strong and significant relationship between family control and the market value of a firm. Similarly, group affiliation and market performance of the firm have a strong and significant association but in a negative direction. Institutional ownership is significantly related to the accounting and market performance of the firm. Moreover, the joint impact of institutional and family ownership is positively and significantly related to the accounting performance of the firm. Finally, institutional activism is positively and significantly related to the accounting performance of the firm.

Effect of Real Earnings Management on Firm Performance: Evidence from India

This study investigates the effect of real earnings management (REM) on firms’ future performance in India. The sample comprises a balanced panel of 108 non-financial firms belonging to 21 industries (as per the two-digit NIC classification code) from 2006 to 2018. The proxy for REM given by Roychowdhury (2006) is used to measure REM, and the firm’s performance is measured through return on assets (ROA), return on equity (ROE) and price-to-earnings (PE) ratio. While ROA and ROE are measures of accounting performance, PE captures market performance. To explore the impact of REM activities on firms’ future performance, a Generalized method of moments (GMM) estimator is used in a dynamic panel setting. Since the proxy variables for performance is measured on a lead year basis, the analysis is restricted to the period 2006–2017. We also control for firm size, financial stability and growth. Our research reflects that Indian firms usually manipulate earnings by reducing discretionary expenditures. Regression results indicate that REM activities affect both accounting and market performance negatively.

Analisis faktor-faktor yang mempengaruhi kinerja keuangan (studi kasus pada bank umum syariah yang terdaftar di otoritas jasa keuangan periode 2015-2019)

This study aims to determine the factors that can affect accounting performance. The population in the study was 14 with the sample in this study were 7 Islamic Commercial Banks. The sampling technique was purposive sampling. The results of the study stated that CAR had no effect on ROA. FDR has a negative effect on ROA and BOPO has a negative effect on ROA. Data processing using SPSS V.21

Why Are Firms with Lower Performance More Volatile and Unpredictable? A Vulnerability Explanation of the Bowman Paradox

This study investigates the negative relationship between firm risk and accounting performance known in the strategy field as the Bowman paradox, which has been generally attributed to differences across firms in their willingness to take risk. Most research to date relies on the behavioral theory of the firm to suggest that underperformers take greater risks to increase their performance to their reference point. As an alternative explanation, we suggest that the Bowman paradox may result from the inherent vulnerability of low performers to negative external shocks. Our panel analysis of 2,681 U.S. firms from 1980 to 2010 confirms that firms with lower performance within their industry are more affected by negative shocks to the economy. The asymmetric vulnerability of low performers to external events makes their overall accounting performance more volatile and difficult to predict by market analysts, even if all firms have a similar attitude toward risk taking and capabilities to manage change. Our vulnerability explanation is also supported by our empirical analysis of the 2008 global financial crisis as a natural experiment. Furthermore, we find strong evidence of a negative risk–return relationship using different methods to control for their endogeneity.