Earnings Management and Investor Protection: An International Comparison

What makes organizations so similar? We contend that the engine of rationalization and bureaucratization has moved from the competitive marketplace to the state and the professions. Once a set of organizations emerges as a field, a paradox arises: rational actors make their organizations increasingly similar as they try to change them. We describe three isomorphic processes-coercive, mimetic, and normative—leading to this outcome. We then specify hypotheses about the impact of resource centralization and dependency, goal ambiguity and technical uncertainty, and professionalization and structuration on isomorphic change. Finally, we suggest implications for theories of organizations and social change.

The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields (Chinese Translation)

Earnings Management to Avoid Earnings Decreases and Losses

Addressing the SDGs in sustainability reports: The relationship with institutional factors

Literature on IFRS adoption by countries concerning high quality, understandable and applicable IFRS in order to be worldwide accepted has generated a pertinent discussion, since the results presented in the literature are not unanimous on the adoption of IFRS and accounting quality. Soderstrom and Sun (2007) analyzed a research published in leading accounting journals selected from 1990’s on the consequences of IFRS adoption and found that the determinants of accounting quality after the adoption of these standards are articulated in: quality of the standards; political and judicial system in the country; financial reporting incentives. Based on Soderstrom and Sun (2007) study, this work aims to analyze literature on IFRS adoption and the accounting quality from 2006. In order to achieve this goal, a systematic search of the literature focused on a "Web of Science" database associated with a bibliometric analysis was done, aiming to understand the discussion on IFRS adoption and accounting quality in literature. As a result, it was found that the adoption of IFRS related to the accounting standard factors, political and judicial systems of the countries and the financial reporting incentives discussed by Soderstrom and Sun (2007) to determine the quality of accounting remains persistent. Overall, this analysis concludes that the quality of accounting cannot be evaluated only in terms of IFRS adoption, either on a voluntary or mandatory basis. The results of this study present at least two limitations: The studies on IFRS adoption researched, despite tackling institutional issues, do not show the real complexity of the reality, due to reduce the quality of the social context to the quality of economic rationality; and the alleged quality of standards based on principles is not enough to determine the quality of accounting.

/pdf/ifrs-adoption-and-accounting-quality-a-review-2b0513hkjj.pdf

IFRS Adoption and Accounting Quality: A Review

Directive 2014/95/EU (the EU Directive) requires large companies to disclose information on the way they operate and manage social and environmental challenges, thus shifting the disclosure of non‐financial information (NFI) from the voluntary to the mandatory realm. Building on the idea that regulatory changes can shape stakeholder expectations, we hypothesized that legitimacy (agency) theory's ability to predict NFI disclosure after the implementation of the EU Directive, and hence after NFI disclosure became mandatory, would decrease (increase). By relying on a hand‐collected data set measuring NFI disclosure, we have found that legitimacy theory maintains its predictive ability in the new mandatory setting, while agency theory's predictive ability partially increases.

The predictive ability of legitimacy and agency theory after the implementation of the EU directive on non-financial information

Carrot or stick? An empirical analysis of the different implementation strategies of the EU directive on nonfinancial information across Europe

The present study investigates the role of accounting tradition and managerial opportunism when companies are given by IFRS the option to choose whether to book accounting items following the historical cost or the fair value method. We hypothesize that accounting tradition still plays a role in the choice, with Continental European companies preferring the historical cost and the Anglo-Saxon companies choosing more often the fair value. We also hypothesize that managers will act opportunistically, choosing the historical cost or the fair value method in order to influence the performance of the company and/or their remuneration. By using a hand-collected sample of 480 companies belonging to Continental Europe (Italy, Germany and France) and Anglo-Saxon countries (United Kingdom and Australia) we find support for the first hypothesis while we reject the second hypothesis. Accounting tradition does still play a role in the accounting choice, while managerial opportunism does not.

https://hrmars.com/papers_submitted/4761/Accounting_Choice_under_IFRS_The_Role_of_Accounting_Tradition_and_Managerial_Opportunism.pdf

Accounting Choice under IFRS: The Role of Accounting Tradition and Managerial Opportunism

The aim of this chapter is to study whether and how the institutional context where a company operates influences Integrated Reporting (IR) disclosure quality, as measured through a unique hand-collected dataset. Our results show strong empirical support for the hypothesis that a country’s institutional characteristics significantly shape IR disclosure quality. In particular, we find that disclosure quality is higher in civil law countries and in countries with higher employee protection, levels of market coordination, ownership concentration, education, density of trade unions, corporate social responsibility and economic development. Conversely, the higher the investor protection, the lower the IR disclosure quality. These results allow us to draw new insights on the nature of IR and its relationship with institutional contexts.

Carlo Marcon

Papers

The predictive ability of legitimacy and agency theory after the implementation of the EU directive on non-financial information

Carrot or stick? An empirical analysis of the different implementation strategies of the EU directive on nonfinancial information across Europe

Accounting Choice under IFRS: The Role of Accounting Tradition and Managerial Opportunism

Institutional Determinants of IR Disclosure Quality

Elementi di bilancio e di analisi economico-finanziaria