Massey Documents by Type

Permanent URI for this communityhttps://mro.massey.ac.nz/handle/10179/294

Browse

Subject: search.filters.subject.1501 Accounting, Auditing and Accountability

Search Results

Now showing 1 - 10 of 25
  • Thumbnail Image
    Item
    The Effect of Corporate Sustainability Performance on Leverage Adjustments
    (Elsevier, 2021-01-30) Ho L; Bai M; Lu Y; Qin Y
    We examine the impact of corporate sustainability performance (CSP) on the speed at which firms adjust their leverage ratios to the target levels for a large sample of 31 countries from 2002 to 2018. Using two proxies of CSP, we find that firms with superior CSP tend to adjust faster toward their target leverage ratios. In exploring the potential underlying economic mechanisms through which CSP affects leverage adjustments, we find that better CSP helps firms to ease information asymmetry, enhance stakeholder engagement, push up stock prices in the stock market, and improve competitive advantage in the product market. In the cross section, the positive association between CSP and leverage adjustment speed is less pronounced in countries with high-quality institutions. The results remain unchanged in robustness tests. Overall, this paper highlights the important role of CSP in shaping corporate capital structure dynamics and suggests implications for corporate strategic planning on the privately optimal levels of CSP activities.
  • Thumbnail Image
    Item
    Do auditors respond when listed firms pledge shares? Evidence from China
    (2023-10-25) Kong KM; Huang HJ
    Purpose: This paper investigates whether the audit fees of Chinese listed firms are associated with the share pledging practice of the firm’s controlling shareholders. Design/methodology/approach: This study uses the audit pricing model to estimate the association between the share pledging of listed firms and audit fees. Cross-sectional analysis is conducted on a large sample of Chinese listed firms during the period 2004 to 2019. The authors further test the moderating effects of listing on the Main Board, state ownership and abnormal audit report lag on the association between share pledging and audit fees. The results remain robust to various endogeneity tests including two-stage least squares instrumental variable analysis, entropy balancing analysis and difference-in-difference analysis. Findings: The study finds that audit fees are positively associated with the proportion of shares pledged by the listed firm’s controlling shareholder in China. The results also provide new evidence that the positive association between audit fees and the share pledging of controlling shareholders could be mitigated if the firm is listed on the Main Board and/or it is a state-owned enterprise. In contrast, pledged firms with abnormal audit report lag are found to have higher audit fees than their pledged counterparts without the excessively long audit delay. Practical implications: Findings of this study have important practical implications to those charged with governance, as boards need to comprehensively understand the adverse consequences of share pledging when pursuing it as the firm’s major source of financing. The study also has policy implications for stock market regulators such as the China Securities Regulatory Commission in China. Regulators could consider developing a threshold-based share pledging disclosure and pledge ratio requirements based on factors such as a firm’s listing status and ownership structure. Originality/value: This study provides new evidence on the audit-related consequences of share pledging in a significant capital market. Findings of this study also enrich the existing audit literature by introducing the share pledging activities of controlling shareholders into the audit pricing decision-making model.
  • Thumbnail Image
    Item
    Does one size fit all? Environmental reporting in New Zealand: the perspective of configuration theory
    (1/01/2023) Perera A
    Purpose: This study aims to examine how different combinations of firm determinants enhance environmental reporting (ER) in New Zealand. Design/methodology/approach: This study collects data from annual and sustainability reports of 145 listed companies in New Zealand. This study uses content analysis to examine the extent of ER and then the fuzzy set qualitative comparative analysis (FsQCA) to determine the configurations of determinants of reporting. Findings: The findings reveal ten configurations of determinants showing that ER relies on the existence or non-existence of other firm determinants such as firm size, profitability, ownership and presence of an environment committee (EC). Among ten configurations, ER*∼ROE (ROE denotes return on equity; firms with no profitability but with ECs) stands out, indicating that ER is strongly influenced by the presence of an EC when no profitability exists. Research limitations/implications: The configuration analysis in this study extends the current ER literature. Practical implications: The findings provide insight into the management to look for new paths when they make environmental-related strategies based on the existence and non-existence of firm determinants. The findings also support policymakers considering multiple combinations of criteria when mandating ER to promote better climate risk reporting in New Zealand. Originality/value: Previous studies on determinants of ER mainly use regression analysis to analyse their data. In contrast, the current study uses configuration analysis.
  • Thumbnail Image
    Item
    Ladder of analytical abstraction: a constructive map for data analysis a case of voluntary reporting of human capital
    (4/05/2023) Perera A; Rainsbury L
    Purpose: This study aims to demonstrate how Carney’s ladder of analytical abstraction is used to examine the motivations of banks for reporting human capital (HC) information. Design/methodology/approach: The authors use semi-structured interviews of senior bank employees at eight large New Zealand banks. They analyse the managers’ views using a constructive mapping of responses applying Carney’s ladder of analytical abstraction. The findings are interpreted from a stakeholder theory perspective. Findings: The authors find that the New Zealand banks report on HC to manage reputation, strengthen employee relationships and achieve competitive advantages. The results suggest that banks engage in opportunistic reporting to distract external stakeholders while advancing their interests. Research limitations/implications: The study will guide researchers in the use of Carney’s ladder of analytical abstraction in analysing qualitative data. Practical implications: This study provides insights for businesses to improve the consistency and quality of HC reporting and ensure that the information needs of broader stakeholder groups are met. Originality/value: Some previous voluntary reporting studies analyse their data using inductive analysis. The authors use Carney’s ladder of analytical abstraction as a framework to guide our inductive analysis.
  • Thumbnail Image
    Item
    A contingency-based accountability and governance framework for the non-profit sector in the post-COVID-19 era
    (2023-01-09) Huang HJ
    Purpose: The COVID-19 global pandemic has caused significant disruptions to the non-profit sector, highlighting the issues that the narrowly focused, traditional conception of governance fails to address. The purpose of this paper is to propose a contingency-based framework with its theoretical underpinnings in the existing literature, in order to support future empirical research on non-profit governance and accountability practices. Design/methodology/approach: From a theoretical perspective, this paper synthesizes relevant existing literature and proposes a contingency-based accountability and governance framework in the non-profit sector. This paper draws on Ostrower and Stone’s (2010) contingency-based framework on boards and Hyndman and McDonnell’s (2009) conception of governance systems. This paper engages with the New Zealand and Australia context while reviewing relevant literature and relevant regulations. Findings: The global pandemic has caused severe worldwide disruptions both socially and economically. There have been dramatic changes to the ways in which non-profit organisations (NPOs) operate. There is an urgent need to understand how such changes in the external environment impact on NPOs’ governance and accountability practices. In this context, the contingency-based accountability and governance framework proposed in this paper has important implications for non-profit research, while opening up an avenue for future research in this field. Research limitations/implications: This paper does not involve empirical analysis. Practical implications: This paper contributes by facilitating better understanding on how external contingencies like the COVID-19 global pandemic affect the external and internal environment of an NPO, how they impact on stakeholders and their interplay with an NPO’s governance and accountability systems. It also suggests that regulators of the non-profit sector, umbrella support organisations, and funders proactively encourage and guide NPOs to embrace a wider scope of governance and strengthen the level of governance in the sector. Originality/value: This paper contributes to the literature by proposing a contingency-based accountability and governance framework in the non-profit sector to support future research in this field. It also sheds light on competing theoretical debates relating to the conceptualisation and operationalization of accountability and governance.
  • Thumbnail Image
    Item
    The Predictive value of bank fair values.
    (Elsevier, 1/02/2017) Ehalaiye D; Tippett M; van Zijl T
    Fair value, the value of an item in an orderly exchange, has been shown to have greater value relevance than historical cost. However, there is limited literature on the predictive ability of fair value. Our study contributes to this emerging area of research by examining the predictive ability of the SFAS 107 fair value disclosures by U.S. banks for future performance as measured by operating cash flows and earnings over a three-year time horizon. Furthermore, we provide evidence on the influence of the 2007/2008 Global Financial Crisis (GFC) on the relationships between bank fair values and future performance, thereby showing whether market illiquidity affected the underlying relationships. We also test for the impact of bank characteristics - size, capital adequacy and growth prospects - on predictive ability. Our findings suggest that fair values have predictive ability for both the cash flow and earnings measures of performance and that the GFC did not have an adverse impact on the predictive ability of bank fair values. However, we find that the predictive ability of fair value is strongest for operating cash flows. The study supports the relevance of fair value, as indicated by predictive ability for performance, and thus makes an important contribution to the fair value accounting literature and accounting standard-setting
  • Thumbnail Image
    Item
    Corporate Social Responsibility in Vietnam: Systematic review of research and future directions.
    (Emerald, 2/08/2021) Nguyen M; Khan M; Bensemann J
    While research on corporate social responsibility (CSR) is reaching new territories, the extent to which such literature manifests itself in developing countries is yet to be fully understood. To that end, this study investigates the understanding, evolution, and practice of CSR in Vietnam. A systematic review of the current literature in the recent past (2000-2020) has been embraced in this research. By analysing a total of 143 articles, we demonstrate that there has been visible growth in published articles related to CSR in Vietnam over the last 21 years. We demonstrate that CSR research in Vietnam has significantly grown in the recent past. Our results highlight the in-depth distribution of publications by year, journal, industry, nature, and focus of CSR research in the country. This study is not only the first to provide an enhanced overview of the current state of CSR knowledge in the country but also sets out directions within the CSR research agenda related to Vietnam and potentially other emerging and developing countries.
  • Thumbnail Image
    Item
    Related party transactions and cost of debt: Evidence from China
    (22/12/2020) Habib A; Huang HJ; Jia J
  • Thumbnail Image
    Item
    Earnings Management and Underperformance after Seasoned Equity Offerings: A Cross-Country Study
    (Emerald, 14/12/2022) Opare S; Houqe M; van Zijl T
    Purpose: This purpose of this study is to examine the association between earnings management (accruals earnings management (AEM) and/or real activities manipulation (RAM)) and firm underperformance following seasoned equity offerings (SEOs) using cross-country data. Design/methodology/approach: The study applies ordinary least squares regression analyses to a sample of 11,764 observations on firms from 22 countries over the period from 2005 to 2017. The methods include weighted least squares regression, sub-sampling approach and alternative measures of firm performance, earnings management and legal regime for robustness tests as well as a two-stage least squares instrumental variable (IV) approach to address endogeneity concerns. Findings: The results suggest that RAM has a greater negative impact on post-SEO performance than AEM. The result is economically significant for RAM only. The results also reveal that the negative impact of earnings management, in particular RAM, on post-SEO performance is greater in countries with a strong legal regime than in other countries. Practical implications: Earnings management around SEOs has important implications for investors, regulators and policymakers. The study suggests that policymakers should improve the current legal conditions to promote fairness in the equity market. Originality/value: The results from the cross-country data support earlier results from single-country studies on the impact of earnings management on post-SEO performance. The study also provides new evidence on the variation in the impact of earnings management according to the strength of the legal regime operating in a country.
  • Thumbnail Image
    Item
    Heterogeneous firm-level responses to the US 2018 tariff announcement
    (Emerald Publishing Limited, 7/12/2020) Qin Y; Yang Z; Bai M; Yawson, A
    Purpose This study examines the impact of the $60 billion tariff announcement of the US government on the Chinese exporting firms. In particular, we focus on firms whose revenues are highly dependent on the US economy. Design/methodology/approach This study uses an experimental analysis and event study methodology. The sample includes firms listed in mainland China and Hong Kong stock exchanges that have the highest revenues from exporting to the US. The data are obtained from CSMAR and DataStream. Findings We find that the tariff announcement has significantly negative impacts on stock performance both before and after the announcement, and the impacts are heterogeneous across our sample firms. For A-shares listed in Mainland China, firms with more revenues from the US experience greater price drops on the announcement day, regardless of being in the targeted industry or not. But such a finding is absent from H shares listed in Hong Kong. We also find that for all the firms, greater pricing power can alleviate the impacts of the tariff announcement. Originality This is the first study documenting the heterogeneity of the impact of the tariff announcement and thus contribute to the prosperous studies on the varied firm-level responses in the Chinese stock market, and to the burgeoning literature by filling the gap of the financial market responses to the protectionist policy announcement.