EAA European Accounting Review

Diversity in Accounting: Trends, Gaps, and Future Directions

Introduction In accounting, diversity has emerged as a key area of study, reflecting broader societal shifts towards inclusivity and equity. Our recent systematic literature review sheds light on the evolving landscape of diversity within the accounting literature, offering insights into prevailing trends, research gaps, and potential future directions. Trends in Diversity Research The review, spanning publications from 1979 to 2021, analyzed 428 studies, revealing a notable surge in diversity-focused research, particularly from 2017 to 2021,…
Alessandro Ghio
Alessandro Ghio
3 min read
0
131

Leveraging Digital Expertise: A New Frontier in Auditor Value Creation

In an era where digital transformation is remaking industries, auditors find themselves swept up in the winds of change. Our recent study published in the European Accounting Review, titled “The Effect of Audit Partner Digitalization Expertise on Audit Fees” (Maghakyan, Jarva, Niemi, & Sihvonen), offers insights into the impact of digital expertise on the evolving audit landscape. It highlights a pivotal shift: audit partners with robust digital skills command a premium of up to eight…
ARC Commitee
ARC Commitee
2 min read
0
125

Spillover Effect of Climate Disaster for Management Forecast

Climate disasters not only impose substantial economic costs on firms that are directly exposed, but they also generate significant externalities. A comprehensive evaluation of climate disasters requires understanding its consequences, not only for exposed firms, but for other firms as well. In my study “Spillover Effect of Climate Disaster for Management Forecast” (forthcoming at European Accounting Review), I examine whether and how climate disasters hitting product market peers influence management forecasting and strategic planning by…
ARC Commitee
ARC Commitee
2 min read
0
206

Understanding the Role of Audit Committee Chairs in Enhancing Audit Quality

In the complex world of financial reporting, Audit Committee Chairs (ACCs) play a pivotal role in ensuring the integrity of corporate governance. What are their personal objectives and incentives that guide them in their actions to maintain and improve audit quality? The recent European Accounting Review article “Audit Committee Chairs’ Objectives and Risk Perceptions: Implications for Audit Quality” (Jürgen Ernstberger, Bernhard Pellens, André Schmidt, Thorsten Sellhorn & Katharina Weiß) shows how ACCs’ personal objectives and…
Thorsten Sellhorn
Thorsten Sellhorn
3 min read
0
216

Earnings Management and the Role of Moral Values in Investing

In a world where financial returns often take center stage, this study sheds light on the powerful role of moral values in investment decisions. This research delves into how investors perceive CEOs based on their engagement in earnings management and how these perceptions, coupled with the investors’ own moral values, influence their investment choices. The study primarily revolves around the concept of earnings management – the practice where CEOs can legally influence reported earnings. In…
ARC Commitee
ARC Commitee
2 min read
0
388

Enhancing the Social Relevance of Accounting Research

What is the value of accounting research for diverse stakeholders? While this question is certainly very difficult to answer, let alone quantify, we often hear concerns regarding the lack of relevance beyond academia. Publishing high-quality research that addresses relevant research questions, however, is only the first step toward social impact beyond academia. Other criteria for accounting research to extend its social impact include translating it into accessible language for non-academics and effective dissemination. In other…
JOCHEN PIERK
JOCHEN PIERK
4 min read
0
467

The Impact of Transparency on Banks’ Loan Loss Provisioning: A Closer Look at Privately Held Banks

Transparency plays a pivotal role in maintaining stability and trust in the banking sector. However, in many countries, a significant fraction of banks is privately held, with few incentives for transparent disclosures and notoriously low pressure from stakeholders absent any capital market. In fact, the traditional business model of these banks relies on a certain level of proprietary knowledge and confidentiality. Privately held banks are thus worth a closer look when it comes to transparency…
ARC Commitee
ARC Commitee
3 min read
0
310

The lease standard has changed, and firms’ transition disclosures confuse more than they clarify

In a paper recently published in the European Accounting Review, we study the text of the transition disclosures in firms’ financial statements explaining the likely effects of a new standard. For a sample of almost all affected firms, we extract the text that refers to how firms plan to transition to the new lease standard. The text runs from a couple of dozen to sometimes over 500 words per disclosure. We then quantify this text…
ARC Commitee
ARC Commitee
3 min read
0
866

How often and how much information should publicly listed firms report?

Disclosure regulation is pervasive and has been increasing in developed economies, despite regulators’ difficulty determining the socially optimal level of disclosure. Showcasing this difficulty, regulators have struggled to reach a consensus on the frequency and content of interim reporting for decades. For example, the European Union (EU) introduced mandatory quarterly reports in 2004, only to abolish the mandate in 2013, returning to a semi-annual reporting frequency for firms whose securities are trading on a regulated…
ARC Commitee
ARC Commitee
3 min read
0
438

Compensation Shifting from Salary to Dividends

This study focuses on the strategic behavior of owner-managers in relation to their compensation and its impact on reported earnings. We investigate whether owner-managers of smaller firms manipulate their compensation, specifically by decreasing their salaries and increasing dividends, to meet or beat the zero earnings benchmark. We emphasize that owner-managers have significant compensation discretion, enabling them to choose between salary (which decreases earnings) and dividends (which does not decrease earnings). We conduct our analysis using…
ARC Commitee
ARC Commitee
2 min read
0
309