In this study, we examine three potential explanations for the corporate choice to disclose environmental capital spending amounts. We investigate, first, whether the disclosure appears to be a function of the materiality of the spending and we find that, for the overwhelming majority of observations, the disclosed amounts are not quantitatively material. This suggests that non-disclosure is likely due to immateriality. We next attempt to differentiate the choice to disclose across voluntary disclosure theory and legitimacy theory arguments. Our findings show that disclosing firms do not exhibit improved subsequent environmental performance relative to non-disclosing companies. Further, controlling for firm size and industry class, we find the choice to disclose is associated with worse environmental performance. Overall, our results suggest that companies use the disclosure of environmental capital spending as a strategic tool to address their exposures to political and regulatory concerns.

https://halshs.archives-ouvertes.fr/halshs-00459410/document

Corporate disclosure of environmental capital expenditures: a test of alternative theories

Contemporary research is emphasizing the development of sound accounting systems in SMEs in order to improve financial management in these entities. This research investigated accounting record keeping practices for performance measurement employed by SMEs in Zimbabwe, using Bindura as a case. The survey research design was used. The target population comprised of 100 SMEs operating retail shops, manufacturing firms and suppliers of various services in Bindura. A structured questionnaire was used to collect primary data from the respondents which was analysed to generate frequencies and percentages. The study revealed that the majority of SMEs do not keep complete accounting records because of lack of accounting knowledge and as a result there is inefficient use of accounting information in financial performance measurement. The study recommended that national regulators must develop specific accounting guidelines for SMEs and develop accounting training programmes for entrepreneurs in small businesses. The study also recommended mandatory record keeping, to improve accounting practices of SMEs in Zimbabwe.

	 

	Key words: Small- and medium-sized entities (SMEs), record keeping, accounting practices, accounting concepts, profit measurement, international financial reporting standard for small- and medium-sized entities (IFRS for SMEs).

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Accounting practices of SMEs in Zimbabwe: An investigative study of record keeping for performance measurement (A case study of Bindura)

Within the 2030 Agenda, the United Nations have explicitly required that the Member States introduce within their jurisdictions new forms of regulations about non‐financial reporting practices. The aim of this paper is to investigate the effects related to the transposition of Directive 2014/95/EU by analyzing firm‐level, governance‐level, and report‐level determinants of business reporting on the Sustainable Development Goals (SDGs). To conduct such an analysis, this study defines and introduces the SDG Reporting Score (SRS)—a qualitative proxy representing a firm orientation toward SDG reporting. The study sample includes the non‐financial reports of 153 Italian Public Interest Entities. The results show a positive relationship between a firm's SRS and various determinants, such as the presence of independent directors on the board, expertise with non‐financial reporting, and length of the report. Finally, the highest levels of SRS are achieved by firms operating in environmental sensitive sectors.

The determinants of business contribution to the 2030 Agenda: Introducing the SDG Reporting Score

This paper examines the gap between reporting and managers’ behaviour to challenge the current theoretical underpinnings of intellectual capital (IC) disclosure practice and research. The authors explore how the key features from IC and integrated reporting can be combined to develop an extended model for companies to comply with EU Directive 2014/95/EU and increase trust in corporate disclosures and reports.,This essay relies on academic literature and examples from practice to critique the theories that explain corporate disclosure and reporting but do not change management behaviour. Based on this critique, the authors argue for a change in the fundamental theories of stewardship to frame a new concept for corporate disclosure incorporating using a multi-capitals framework.,We argue that, while the inconsistency between organisations’ reporting and behaviour persists, increasing, renewing or extending the information disclosed is not enough to instil trust in corporations. Stewardship over a company’s resources is necessary for increasing trust. The unanticipated consequences of dishonest behaviour by managers and shareholders compels a new application of stewardship theory that works as an overarching guide for managerial behaviour and disclosure. Emanating from this new model is a realisation that managers must abandon agency theory in practice, and specifically the bonus contract.,We call for future empirical research to explore the role of stewardship theory within the dynamics of corporate disclosure using the approach. The research implications of those studies should incorporate the potential impacts on management behaviours within a stewardship framework and how those actions, and their outcomes, are disclosed for rebuilding public trust in business.,The implications for integrated reporting and reports complying with the new EU Directive are profound. Both instruments rely on agency theory to coax managers into reducing information asymmetry by disclosing more. However, agency theory only re-affirms the power managers have over corporate information. It does not change their behaviour, nor to act in the interest of all stakeholders as the stewards of an organisation’s resources.,We advocate that, in business education, greater emphasis is needed on how stewardship has a more positive impact on management behaviour than agency, legitimacy and stakeholder theories.,We reflect on the current and compelling issues permeating the international landscape of corporate reporting and disclosure and explain why current theories which explain corporate disclosures do not change behaviour or engender trust in business and offer an alternative disclosure model based on stewardship theory.

Developing trust through stewardship: Implications for intellectual capital, integrated reporting, and the EU Directive 2014/95/EU

The importance of maintaining proper books of accounts and sound accounting practices has been emphasised in ensuring proper financial management in SMEs. In this study, we investigate the record keeping strategies utilized by SMEs in Kumasi (Ghana) through data based on responses to a structured questionnaire from 210 SMEs in Kumasi. We report that majority of SMEs fail to maintain complete accounting records as they think there is no need to keep accounting records and that it exposes their financial position. It is recommended that training programmes must be organised to sensitize owners/managers on the need to maintain proper books of accounts. The government should also come out with the necessary legal instruments to make the preparation of proper books of accounts mandatory in order to improve SMEs practice of accounting in Ghana.

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Accounting Practices of SMEs: A Case Study of Kumasi Metropolis in Ghana

Motivated by the new European Union Directive 2014/95 on non-financial and diversity information, this paper aims to develop a future research agenda to conduct pragmatic, theory-oriented research into the Directive and corporate sustainability reporting.,Drawing upon the relational dynamics between states, firms and society in regulating non-financial reporting (NFR), this essay frames and analyses the Directive and its grand theories, as unproven theories, by discussing its practical concerns and reviewing the academic literature.,The Directive is an act of policy to legitimise NFR that encompasses two grand theories: improve the comparability of information and enhance corporate accountability. From a pluralist perspective, companies can rest assure that their compliance with the Directive will be perceived as socially desirable, proper and appropriate. However, some of the forces involved in translating the Directive into actionable policies operate contra to the Directive’s goals and, instead, act as barriers to its grand theories. In addressing these barriers, a research agenda is proposed that both traces backward to re-examine the foundational theories of the past and looks forward to explore alternative possibilities for achieving these goals.,This paper provides researchers with a practical-driven and theory-oriented agenda for future research in light of the rising academic interest in the Directive.,The barriers to the Directive’s grand theories help policymakers and practitioners to understand the practical concerns about the implementation of the Directive and other mandatory NFR policies.,This paper enriches the emerging debate on the Directive and highlights future possibilities for fruitful empirical research by developing a research agenda.

Harmonising non-financial reporting regulation in Europe: Practical forces and projections for future research

Purpose: This paper introduces the special issue “Rebuilding trust: Sustainability and non-financial reporting, and the European Union regulation” Inspired by the studies published in the special issue, this study aims to examine the concept of accountability within the context of the European Union (EU) Directive on non-financial disclosure (hereafter the EU Directive) to offer a critique and a novel perspective for future research into mandatory non-financial reporting (NFR) and to advance future practice and policy Design/methodology/approach: The authors review the papers published in this special issue and other contemporary studies on the topic of NFR and the EU Directive Findings: Accountability is a fundamental concept for building trust in the corporate reporting context and emerges as a common topic linking contemporary studies on the EU Directive While the EU Directive acknowledges the role of accountability in the reporting practice, this study argues that regulation and practice on NFR needs to move away from an accounting-based conception of accountability to promote accountability-based accounting practices (Dillard and Vinnari, 2019) By analysing the links between trust, accountability and accounting and reporting, the authors claim the need to examine and rethink the inscription of interests into non-financial information (NFI) and its materiality Hence, this study encourages research and practice to broaden mandatory NFR practice over the traditional boundaries of accountability, reporting and formal accounting systems Research limitations/implications: Considering the challenges posed by the COVID-19 crisis, this study calls for further research to investigate the dialogical accountability underpinning NFR in practice to avoid the trap of focusing on accounting changes regardless of accountability The authors advocate that what is needed is more timely NFI that develops a dialogue between companies, investors, national regulators, the EU and civil society, not more untimely standalone reporting that has most likely lost its relevance and materiality by the time it is issued to users Originality/value: By highlighting accountability issues in the context of mandatory NFR and its linkages with trust, this study lays out a case for moving the focus of research and practice from accounting-based regulations towards accountability-driven accounting change © 2020, Emerald Publishing Limited

Rebuilding trust: sustainability and non-financial reporting and the European Union regulation

Accounting and entrepreneurship - A review and discussion of the scientific literature in the 80s and 90s

Managers' use of auditors in decision processes is well known in the accounting literature, but little is known about owner-managers in innovative firms and their acquisition of accounting knowledge through direct contacts with external auditors. We conducted a multiple embedded study of exploratory character based on 21 interviews with owner-managers and external auditors connected to six innovative firms. We show that owner-managers in innovative firms apply informal management control in early phases of the innovation process and thus also rely heavily on external auditors for such purposes. However, management's acquisition of accounting knowledge may contribute over time to the development of a more formalised control system as their competence increases. This study suggests that a competence-based view may be useful for understanding the role of accounting and external auditors in innovative firms' management control systems.

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Accounting knowledge in innovative firms - direct contacts with external auditors for strategic actions

The aim of this paper is to describe the extent and content of information regarding incubator management structure, selection, support and network mediation on Swedish incubators websites and analyse connections between different incubator management structure and the content of incubator best practice. The data is based on information reported on 44 incubator websites in Sweden processed within the SPSS system. The findings show that incubators with more male representation in board and coach/advisor personnel report a more active part in business support including network mediation.

Marita Blomkvist

Papers

Harmonising non-financial reporting regulation in Europe: Practical forces and projections for future research

Rebuilding trust: sustainability and non-financial reporting and the European Union regulation

Accounting and entrepreneurship - A review and discussion of the scientific literature in the 80s and 90s

Accounting knowledge in innovative firms - direct contacts with external auditors for strategic actions

Academic entrepreneurship – the structure of incubator management and best practice reported on Swedish business incubators’ websites