By Joachim Gassen (Humboldt University Berlin, TRR 266 “Accounting for Transparency”) and David Veenman (University of Amsterdam) “To reduce the impact of outliers on our findings, we winsorize the dependent and independent variables at the top and bottom percentile.” If you do empirical archival research in accounting and/or corporate finance, we bet that you have read and written such a sentence many times throughout your career. We know that outliers exist and that we have…

The Sheep Watching the Shepherd: Employee Representation on the Board and Earnings Quality Can employee representatives, i.e. directors on corporate boards appointed by employees, have an effect on earnings quality? Yes, probably. This is what Conny Overland and Niuosha Samani document in a recent article in the European Accounting Review (EAR). Several European countries have put in place legislation that allows employees to be represented on the boards of directors. Recently the introduction, or strengthening,…

Dear EFRAG contributor, We are happy to share with you EFRAG’s 2020 Annual Review. The highlights include EFRAG’s work on:   Sustainability reporting: Project on Reporting on Non-financial Risks and Opportunities and the Linkage to the Business Model EU Sustainability Reporting Standards   Financial reporting: IFRS 17 Insurance Contracts – closure at last Primary Financial Statements Goodwill and Impairment The Annual Review also introduces you to our research projects notably: Crypto-assets and liabilities Intangibles Despite…

Covid-19 restrictions have severely impacted access to the traditional data and data sources used by qualitative researchers. Charl de Villiers and I discuss the changes brought on by the COVID-19 pandemic, and the corresponding challenges and opportunities of conducting qualitative research in accounting.  We show how COVID-19 pandemic is reshaping some of the traditional research methods, practices and techniques in qualitative accounting research. Particularly, academic researchers who are reluctant to use the new technologies need to…

Happy to share an article developed with Jonida Carungu and published in Accounting, Auditing and Accountability Journal!  Our paper explores the stereotype of the accountant in Florentine medieval popular culture based on literary works and from a historical perspective. We aim to highlight how stereotypes change with time and represent the cultural and historical evolution of a society.  We show the change of the accountant stereotype from the medieval age to the Renaissance. The Divine Comedy…

Do work experience and gender impact ethical decisions of auditors? In a recent publication in Managerial Auditing Journal, we study this question. In this blog, we present some of the paper's main ideas, findings and conclusions. Background Financial scandals such as the Wirecard fraud continue to put ethical decisions of auditors in the public spotlight, while organizations such as the International Federation of Accountants stress the importance of ethical conduct and integrity. In this research project, we are…

Non-financial disclosure (or sustainability disclosure) in the European Union (EU) has been mandatory for few years now. The Directive 2014/95/EU requires large firms to report information covering aspects such as environmental, social and employee-related matters, respect for human rights, and anti-corruption and bribery concerns. Did this regulation improve the disclosure of non-financial information as aimed?  In our article "From voluntary to mandatory non-financial disclosure following Directive 2014/95/EU: an Italian case study" published in Accounting in Europe (https://doi.org/10.1080/17449480.2021.1933113), we…

In 2020, U.S. non-financial firms held $31.4 trillion (as measured by notional value) interest rate- and foreign exchange rate-related derivatives (Bank for International Settlements 2020). These observations contrast the hedging irrelevance argument in the frictionless regime of Modigliani and Miller (1958). No prior research has examined whether and, if so, how corporate derivatives usage affects the likelihood of a stock price crash. This is surprising because information opacity is a central issue underlying the debate…

Two weeks ago, Audit Analytics had the pleasure of attending the 2021 Annual Congress, hosted by the European Accounting Association (EAA). As defined by the EAA, “the Annual Congress of the European Accounting Association is a major event that takes place in a different country during springtime each year. The EAA Annual Congress offers a unique opportunity for presenting research and finding out what colleagues in the fields of management and accounting are doing. Every year between 1,200 and 1,500…

Nominations are now open for the 2022 EAA Accounting Education Excellence Award The award seeks to highlight excellent practice in Accounting Education which addresses thought leadership in the field, innovation and cutting-edge practices in pedagogy, technology and contents. The first award will be announced at the EAA Annual Congress in Bergen (2022), subject to there being a worthy recipient. Individuals will be able to nominate themselves along with two advocate letters of support. The award…