International Journal of Accounting, Auditing and Performance Evaluation (31 papers in press)

Regular Issues

• Does the market react to mandating ESG disclosure? A regression discontinuity based evidence  
  by Zelalem Abay 
  Abstract: This study examines the stock market reaction to the recently adopted European Union Directive 95/2014 on mandating certain entities to disclose non-financial information, commonly termed ESG disclosure. Owing to the cost burden of small and medium-sized enterprises, previously voluntarily disclosed information is now mandated only for large undertakings. This size-based directive provides an opportunity to apply a regression discontinuity design, the quasi-experimental research approach. Using a sample of European firms, the study finds that firms on both sides of the threshold react negatively to the directive, with an insignificant difference in these negative market reactions. These findings potentially contribute to the existing literature by documenting new evidence of size-based regulations using a unique approach, indicating that a wider market reacts negatively, irrespective of size, which the directive considered as the basis for compliance. The novelty of this study refers to the application of the unique regression discontinuity design for an event study to exploit the size-based nature of the directive.
  Keywords: ESG; non-financial disclosure; regression discontinuity design; event study, market reaction.
  
  
• Twenty years of research by Professor Khaled Hussainey: a bio-bibliometric analysis  
  by Walid Simmou, Ibrahim Sameer, Fatma Ahmed, Anas Hattabou, Samira Simmou 
  Abstract: This paper presents a unique contribution to financial and accounting research through a retrospective overview of 20 years of research by Professor Khaled Hussainey. Using a bio-bibliometric analysis, this research identified co-authors, journals, institutions, and countries associated with Professor Khaled Hussainey based on his 128 peer-reviewed papers published between January 2003 and July 2022 using the Scopus database. The thematic analysis method established major research clusters related to his contributions. During 20 years of research, Professor Khaled Hussainey produced 128 papers, totalling 2922 citations, corresponding to an average of 22.82 citations per publication. His accounting and financial management research has earned him the position of specialist subject editor for some of the most prestigious accounting and finance journals. The typical research clusters to which Professor Khaled Hussainey has contributed include: corporate disclosure (cluster 1), financial and accounting strategies (cluster 2), strategy and management practices (cluster 3), and Islamic finance (cluster 4). The findings will benefit academics by providing general insights into accounting and financial literature and critical information about Professor Khaled Hussainey that will guide future collaboration and research.
  Keywords: bibliometric analysis; Khaled Hussainey; corporate disclosure; corporate governance; thematic analysis.
  DOI: 10.1504/IJAAPE.2023.10060023
   
  
• Strategic manoeuvres in the political arena: exploring the nexus of political cost and earnings management: a review  
  by Kazi Abul Bashar Muhammad Afzal Hossain, Mahmoud Elmarzouky, George Giannopoulos 
  Abstract: This paper aims to review the literature on political costs and earnings management. An exhaustive search of available academic data sources identified 23 relevant articles published in various renowned journals between 1991 and 2022. The overall findings of this review suggest a list of sources of political cost and indicate a significant impact on firms' reported earnings. This study also indicates other factors like environmental disclosure, corporate governance, and political connections as moderating factors for this relationship. Our study is significant for future researchers, policymakers, potential investors and other stakeholders to understand and predict the implications of firms' behaviour and responses against any future changes in policies or regulations.
  Keywords: political cost; earnings management; environmental performance; corporate governance; systematic review.
  DOI: 10.1504/IJAAPE.2023.10060152
   
  
• Tax avoidance, state control and firm financial constraints: empirical evidence from a developing country  
  by Mouna B.E.N. Rejeb, Nadya Ouali 
  Abstract: State controlled firms enjoy tax preferential treatments that may increase tax avoidance profit proportional to its cost. Bearing on this, the present study examines how state control affects tax avoidance practices and whether financial constraints moderate this relationship. Based on a sample of 248 Tunisian firms over the 20072022 period, we employ a GLS randomeffect model with robust estimates, clustered by firm using different measures of tax avoidance and state control. The empirical analysis indicates that state control correlates negatively with tax avoidance practices. More important, the findings show that managers of state-controlled firms are not motivated to reduce tax expenses when they face financial constraints even in crisis period. These managers are constrained to protect government revenues useful to achieve socio-political objectives to the detriment of the firm performance.
  Keywords: financial constraints; state control; tax avoidance; developing countries.
  DOI: 10.1504/IJAAPE.2023.10060503
   
  
• IFRS 7/9 determinants of financial instrument disclosure in emerging markets and the moderating effect of foreign ownership: evidence from Nigeria  
  by Obiajulu Chibuzo Okeke, Mary-Fidelis Chidoziem Abiahu, Grace O. Ogundajo 
  Abstract: The study sought to investigate the firm specific characteristics that can influence the disclosure of financial instrument information, and the influence of foreign ownership. Data was obtained from sampled listed manufacturing firms in Nigeria for the period between 2011 to 2020. The findings revealed that foreign firms in Nigeria disclosed more financial instrument information compared to the local firms. Audit quality, foreign ownership and firm growth revealed a positive effect on financial instrument disclosure, whereas firm size and profitability revealed a negative effect on financial instrument disclosure. Furthermore, the empirical evidence revealed that foreign ownership moderates the relationship between audit quality, firm size and financial instrument information disclosure. Based on the empirical findings, we recommend to managers of manufacturing firms in Nigeria to endeavor to employ the services of the big four audit firms and to have more foreign investors as they will drive the disclosure of financial instrument information
  Keywords: Financial Instrument; Firm Characteristics; IFRS 7; IFRS 9; Manufacturing Companies; Nigeria.
  DOI: 10.1504/IJAAPE.2024.10060977
   
  
• What causes forward-looking information disclosure in a dynamic setting? Evidence from Malaysia, a developing country  
  by Imad Muftah, Yuserrie Zainuddin 
  Abstract: This paper examined the factors influencing forward-looking information disclosure (FLID), including corporate governance, International Financial Reporting Standards (IFRS), and earnings management, while controlling for firm-specific variables. Endogeneity issues have plagued previous similar studies, so this study utilised a robust dynamic estimation approach (i.e., Sys-GMM) to address these concerns. Analysing a large dataset of listed companies in Malaysia over nine years, the study found that earnings management and IFRS, along with firm size, were significant drivers of FLID. Accounting for various sources of endogeneity, the study discovered that board size and independence had a negative impact on FLID. The research's novelty lies in its dynamic approach to investigating the determinants of FLID, making it valuable for regulators and policymakers interested in improving information flow in annual reports. The study suggests that non-IFRS-adopting countries may benefit from moving towards IFRS to enhance financial disclosure quality.
  Keywords: corporate disclosure; forward-looking information; corporate governance; IFRS; earnings management; endogeneity; system GMM; Malaysia.
  DOI: 10.1504/IJAAPE.2024.10061387
   
  
• Sustainable development goals: evidence from technology and telecommunication sectors from the UK and Australia  
  by Madiha Sarwar, Nadia Gulko, Nicola Wood 
  Abstract: The Sustainable Development Goals (SDGs) formulated by the UN are based on the concept of a shared plan to achieve a more sustainable future for all. This poses a significant challenge for companies to address sustainability issues within their corporate structure and policies. Purpose of our paper is to examine disclosure on the SDGs in corporate reports and on websites of FTSE100 and ASX100 companies in the UK and Australia’s Technology and Telecommunication sectors. The results of content analysis of nineteen reports and twelve websites show that although most companies in the sample indicate their commitment to the SDGs, the effectiveness of SDGs reporting can be enhanced. The findings reveal SDGs disclosure in UK companies has a different focus than in Australian companies. It is also noted that the industry characteristics influence SDGs reporting. We offer several implications for policymakers, management, stakeholders, and academics, and highlight opportunities for future research.
  Keywords: sustainable development goals reporting; technology and telecommunication sector; content analysis; annual and sustainability reports; UK; Australia.
  DOI: 10.1504/IJAAPE.2024.10062413
   
  
• Detection of earnings manipulation in financial reports: a data-driven approach  
  by D. Divya, Vivek M. Bhasi, O.N. Arunkumar 
  Abstract: Earnings manipulation attracts attention from both from industry and academia as detection of earnings manipulation helps them to invest wisely rather than based on falsified financial statements. This paper discusses a process through which earnings manipulators can be identified. This can help shareholders to detect companies who have made modifications to their financial statements. Earlier researchers developed many mathematical models to identify earnings manipulators. However, their works require an in-depth understanding of financial ratios and accounting principles. The advancement of data-driven algorithms has now brought comparable machine learning detection techniques into the picture, wherein data scientists can use historical data to detect earnings manipulators. This paper discusses the use of an Artificial Neural Network (ANN) for detecting manipulations in the dataset.
  Keywords: earnings manipulation; data analytics; neural network.
  DOI: 10.1504/IJAAPE.2024.10062836
   
  
• Audit quality and firm performance: evidence from SAARC nations  
  by Niva Kalita, Reshma Tiwari 
  Abstract: This paper provides preliminary evidence of the impact of audit quality on firm performance in the context of South East Asian Association of Regional Co-operation (SAARC) nations. As far as our knowledge transcends, no cross-country empirical work in the SAARC countries ties audit quality with firm performance. According to their market value, the top fifty non-financial listed companies from Bangladesh, India, Pakistan and Sri Lanka are chosen as the sample for the period of 20122021. The system generalised method of moment is used to analyse the dynamic panel data. For robustness, generalised estimating equation population-averaged model is employed. The findings suggest a positively insignificant association between auditor size and firm performance. However, a significant positive relationship is established between audit fees and ROA. Furthermore, the analysis suggests a non-linear relationship between audit fee and Tobins Q, implying that audit fee has a diminishing marginal impact on market value.
  Keywords: Audit quality; audit fee; big 4; firm performance; SAARC.
  DOI: 10.1504/IJAAPE.2024.10063029
   
  
• Mitigating climate change towards sustainability: a natural-resource-based view of the influence of taxation policy change on energy companies  
  by Thi Nguyen, David Floyd, Fadi Alkaraan, Mizan Rahman 
  Abstract: Rooted in Knightian uncertainty caused by many extreme situations and natural-resource-based view, this papers sheds lights on corporate opportunistic behaviours, and the potential effects of increasing taxes on energy companies of the UK government to mitigate climate change and also considers the effects of an energy price CAP for both consumers and businesses. It starts by looking into the theory of increasing tax’s benefits and drawbacks, then analyses the demand and supply of energy in the UK before assessing the consequences. It also assesses how the energy cap affects consumers and businesses before finishing by looking into the UK’s current actions on sustainability. The result shows that raising the windfall tax on energy firms funds the British government to protect struggling households and cover its own debt. It also encourages these firms to produce more gas and oil, which helps the government in this net-zero transition and gain energy security. However, the obvious downside is that it would prevent energy firms from investing more in renewable energy, which is a threat to climate change targets.
  Keywords: government subsidy; taxation; renewable energy; energy crisis; sustainability; net zero; climate change.
  DOI: 10.1504/IJAAPE.2024.10063030
   
  
• Impact of hyperinflation on financial statements and taxation: a case of Lebanon  
  by Jacques Hendieh, Robert Poulton, Umair Riaz 
  Abstract: Since 2019, the Lebanese currency has continued to devalue against the US dollar. We aim to discuss two improvements in the present study, the impact of using a fixed exchange rate on import taxes during hyperinflation in a developing country. We also tested whether IAS29 will result in more reliable, relevant financial statements. We collected annual reports from the Lebanese Central Bank and Procter and Gamble. Two techniques were used to test the hypotheses: a descriptive approach and a simple regression model. We find that using a market exchange rate instead of a fixed exchange rate is better for improving import tax collections, especially in hyperinflation times, when governments must spend more to reduce their expenditures to limit the impact of inflation. Our results also suggest that using IAS29 results in more reliable and relevant financial statements that improve the decision-making process for the stakeholders and the company’s survival chances.
  Keywords: hyperinflation; IAS29; taxation; financial results; financial statements; developing countries; import tax.
  DOI: 10.1504/IJAAPE.2024.10063099
   
  
• IFRS convergence and earnings management in India: a mixed method approach  
  by Yasser Barghathi, Poorna Sriram, Naimat U. Khan, Umair Riaz 
  Abstract: TThis paper uses a mixed method to address the impact of International Financial Reporting Standards (IFRS) convergence on earnings management in India. We examine a sample of 70 Indian listed companies with net worth exceeding 500 crore INR that adopted IND(AS) in Phase 1 in 2016. The Modified Jones Model is employed to assess earnings management over four yearstwo years pre- and post-IND(AS) adoption. Additionally, we conducted six semi-structured interviews with auditors and accountants. Contrary to the hypothesis of improved reporting quality through IFRS harmonisation and reduced principal-principal agency conflict, our findings reveal increased earnings management practices post-IND(AS) adoption. The complementary quantitative and qualitative results highlight Indias power imbalance, enabling large firms with tight controls to influence reporting practices, potentially indicating principal-principal conflicts between majority and minority shareholders. This research suggests implementing additional measures to safeguard minority shareholders interests from expropriation by the majority.
  Keywords: IFRS; earnings management; reporting quality; convergence; corporate governance.
  DOI: 10.1504/IJAAPE.2024.10063276
   
  
• Do a secure business environment and a judicial system complement or substitute each other in spurring stock market development?  
  by Khalil Nimer, Ali Uyar, Ahmed Bani-Mustafa 
  Abstract: Prior work has examined the relationship between institutional quality and the development of the stock market. However, the specific complementary or substitutive role between the judicial system and the secure business environment has not been thoroughly explored. To address this gap, the study adopts an institutional perspective to explore the potential impact of different aspects, namely physical security and the legal environment, within the institutional environment on stock market development. By examining the interaction between these factors, the study aims to provide insights and recommendations for policymakers on how to foster stock market development within their respective countries. The sample of the study consists of 764 country-year observations between 2007 and 2018 for 74 countries. The results of the system GMM methodology show that although a secure business environment per se fosters stock market development in some models, it does not exist in some models. However, a sound judicial system is a robust determinant of stock market development in all model specifications.
  Keywords: stock market development; institutional theory; secure business environment; judicial system.
  DOI: 10.1504/IJAAPE.2024.10064085
   
  
• Electronic money accounting in developing countries: current state and future prospects  
  by Mykola Bondar, Anna Stovpova, Mariya Shygun 
  Abstract: This study represents possible approaches to solving local and global problems in accounting for electronic money, including virtual currencies. The concept of electronic money was defined. Changes to the Chart of Accounts based on introducing a new Electronic Money account, divided into sub-accounts, have been proposed. The developed algorithm makes it possible to recognize a potential asset as an accounting object and perform its preliminary classification for the display on accounts. The research proves that a multi-class approach is the most appropriate for virtual currencies when they can be recognized as intangible assets, goods, products, and monetary equivalents. The Notes to the Financial Statements should disclose details of such subgroups of assets, the purpose of their retention, and the risks associated with them, particularly the risk of volatility and lack of legal regulation. It is recommended to be reviewed by the governments and all participants of the crypto-asset market.
  Keywords: digital currency; E-money; electronic money; cryptocurrency; accounting; financial markets; regulation; electronic money accounting.
  DOI: 10.1504/IJAAPE.2024.10064598
   
  
• Exploring dividend policy, stock price volatility, and the impact of ownership structure: a study of non-financial companies  
  by Ahmad Almansi, Mahmoud Al-Khalialeh, Hala Zaidan, Ahmad Dmour, Omar Mowafi, Muntaser J. Melhem 
  Abstract: This study intends to investigate the relationship between dividend policy and stock price volatility in the context of non-financial companies listed on the Jordanian Amman Stock Exchange from 2010 to 2019. This study also examines if foreign and state ownership affects this relationship. By applying multiple regression on the sample of the study, we found that dividend policy, as determined by dividend payout, did not significantly affect stock price volatility using a sample of non-financial companies. However, our data revealed that state ownership significantly affects stock price volatility. Interestingly, our research did not find any moderating effects of foreign or state ownership on the relationship between dividend policy and stock price volatility. When deciding on a dividend policy, however, the management of these companies should consider how state ownership affects stock price volatility. The lack of moderating effects of foreign and state ownership on the association between dividend policy and stock price volatility suggests that the amount of foreign or state ownership in these enterprises has no bearing on the relationship.
  Keywords: dividend policy; ownership structure; stock price volatility.
  DOI: 10.1504/IJAAPE.2024.10064639
   
  
• Contributing factors of green innovation for environmental sustainability  
  by Lipsa Das, Sarita Mishra, Suresh Sahoo 
  Abstract: Environmental sustainability is one of the major focus points of every competent business model in the world. In this context the effect of green innovation is vital for gaining environmental sustainability. The thought that innovation is an important key driver for sustainability development is broadly accepted by industrial professionals and governments. This paper reviews the literature on innovations that can guide to drive individuals and organisations towards a sustainable future. This study investigates effect of factors like green patents, sustainable finance, green copyright, number of green patent applications, CSR schemes, internal and external stakeholders, R & D costs and the past financial performance for influencing the green innovation projects and sustainable development of any organisation. The data were collected from various service and manufacturing organisations of Odisha that adopt green sustainable practices through green innovation using a close ended questionnaire. Our findings proved a positive and significant link of factors, i.e., green patent, green copyright, green finance, R&D, internal external stakeholder, past performance with green innovation project. This paper provides a new perspective for the research on the contributing factors of green innovation.
  Keywords: environmental sustainability; green innovation; green financing; R&D schemes.
  DOI: 10.1504/IJAAPE.2024.10064921
   
  
• The effect of accounting comparability and earnings commonality on analyst behaviour  
  by Tae G. Kang, Sung-Jin Park 
  Abstract: This paper examines the distinctive roles of accounting comparability and earnings commonality in shaping financial analysts’ forecasting behavior. Accounting comparability and earnings commonality stem from the similarities in a firm's underlying economics or its accounting practices. However, they influence analyst behavior differently by altering the perceived cost of obtaining and processing firm-specific information versus industry-wide earnings news for forming earnings forecasts. This study presents evidence indicating that accounting comparability and earnings commonality are positively associated with the number of analysts following, suggesting that efficiency benefits from greater comparability. However, it also reveals contrasting effects: higher earnings commonality is linked to less accurate and more dispersed earnings forecasts, whereas higher accounting comparability is associated with higher quality earnings forecasts, i.e., more accurate and less dispersed earnings forecasts.
  Keywords: accounting comparability; earnings commonality; analyst coverage; analysts’ earnings forecasts.
  DOI: 10.1504/IJAAPE.2024.10065051
   
  
• Internal audit integration with risk management: a comprehensive bibliometric analysis (19902023)  
  by Taha Ahmad Jaber, Sabarina Mohammed Shah, Mazlina Mustapha, Jalila Johari, Furman Ali 
  Abstract: This study explores the 'state-of-the-art' scientific literature related to internal audit (IA) coupled with risk management (RM) and/or enterprise risk management (ERM). It aims to identify research trends, influential articles, impactful journal sources, authors' and countries' collaborations, research areas and their integration, as well as to identify and review related themes. Additionally, it offers potential scopes for further studies in the domain. Data from Scopus and Web of Science (WOS) databases was systematically collected using targeted keywords. Systematic reviews and bibliometric analyses were conducted through the preferred reporting items for systematic reviews and meta-analyses (PRISMA) and biblioshiny methods, respectively. The findings reveal that publications related to IA coupled with RM and/or ERM began in the early 1990s and have notably expanded in the past decade. Collaborative research primarily involves two authors, with the United States of America (USA), Romania, and the United Kingdom (UK) exhibiting the highest publication numbers in the domain. Previous research has focused on interactions among four main areas, and four specific related themes have been identified.
  Keywords: bibliometric analysis; biblioshiny technique; internal audit; RM; risk management; ERM; enterprise risk management; Scopus; WOS; Web of Science.
  DOI: 10.1504/IJAAPE.2024.10066222
   
  
• The nexus between earnings management and information asymmetry: an empirical analysis based on US firm data  
  by Qazi Qureshi 
  Abstract: The study shows evidence that, even when firms use their discretion to manage earnings, they can effectively reduce information asymmetry through earnings announcements. The study provides strong empirical support for the possible causes of information asymmetry, especially earnings management, by filling the gap in the literature. It implies that earnings announcements provide enough information to the market for analysts to modify their forecasts and achieve consensus. The study's empirical analysis of the pre-COVID period reveals a larger positive link between the magnitude of earnings management and the dispersion of pre-disclosure forecasts than post-disclosure forecasts. The results suggest earnings management exacerbates information asymmetry, while information provided through financial reports minimizes post-disclosure information asymmetry and promotes consensus among analysts' forecasts. With a comparative analysis of pre- and post-disclosure information asymmetry, this study offers analysts and investors alike, to consider earnings management as an important factor in making their forecasting and investing decisions.
  Keywords: information asymmetry; analysts forecasts; earnings management; earnings announcement; accruals earnings management; real earnings management.
  DOI: 10.1504/IJAAPE.2024.10066425
   
  
• Two decades of IFRS research: scientometric review analysis  
  by Ritu Sapra, Vivek Jaiswal, Deepika Swami, R.K. Tailor 
  Abstract: The integration of capital markets owing to rapid globalization has led to increasing demand for standardized and harmonized accounting standard across nations. The adoption and implementation of IFRS at global scale has met this objective to some extent. There was tremendous increase in the scholarly articles in this research area in the last two decades. With the aim of offering scholars a more measurable and visually represented overview of the domain of IFRS research, this study was conducted. For this purpose, a scientometric review of 787 articles pertaining to the subject, which were published between 2003 and 2023 and indexed in the Web of Science database, were conducted using the Cite Space software. The research publications displayed a positive trajectory, with a consistent increase observed from 2009 onwards. The majority of global research on IFRS has primarily conducted by developed countries and China was the pioneer among developing nations. Through the cluster analysis, we also examined the trending themes of the research area and pinpoint the future research avenues for academicians and practitioners.
  Keywords: IFRS; International Financial Reporting Standards; convergence; bibliometric; scientometric.
  DOI: 10.1504/IJAAPE.2024.10066527
   
  
• The information system impact on auditing: systematic literature review  
  by Mufleh Amin A.L. Jarrah, Samer Alhawari 
  Abstract: This study uses a systematic literature review procedure and analyses 49 peer-reviewed journal articles published from 2010 to 2022. The evaluation used four criteria to identify information system development on auditing throughout: geographic areas, names and quality of the journals, topics and sub-topics, and timelines of the peer-reviewed articles. Also, this study critically interprets the scepticism that may be expressed by researchers, by analysing the features and challenges. As a result, the increasing interest in auditing research might be fostered by embedding new breakthroughs into information system, measurement, and evaluation as well as maturity, techniques, and applications. Finally, this study generates new ideas, critical comments, and research directions in this discipline.
  Keywords: auditing; information system; audit system; management system; systematic literature review; challenges of auditing; adopting information system.
  DOI: 10.1504/IJAAPE.2024.10066585
   
  
• CSR and banks financial performance: evidence from the US banking sector  
  by George Giannopoulos, Halil Gouda, Sofia Asonitou, Nikolaos Sykianakis 
  Abstract: In a world marked by constant evolution and a growing emphasis on global corporate responsibility, Corporate Social Responsibility (CSR) practices and Environmental, Social, and Governance (ESG) initiatives have gained paramount significance. Amidst this evolving landscape, this research study delves into the intricate relationship between ESG initiatives and the financial performance of US banks. Spanning from 2010 to 2019, this study meticulously investigates the interplay between ESG scores, as a proxy of ESG engagements, and financial performance metrics, mainly focusing on Return on Assets (ROA) and Return on Equity (ROE). This investigation offers insights by exploring this correlation within the realm of US banking, a dimension hitherto less explored. Through data regression analysis, our findings underscore a robust and statistically significant relationship between ESG initiatives and financial performance, resonating with the evolving discourse surrounding global CSR practices. This research study thus advances our comprehension of the intricate dynamics that define the interconnection between CSR practices, ESG initiatives, and the financial performance of US banks.
  Keywords: ESG; ROE; ROA; financial performance; banking sector.
  DOI: 10.1504/IJAAPE.2024.10067275
   
  
• Improving audit quality through collaborative efforts understanding drivers and limiters in Kuwait  
  by Ela Tuli, Shikhar Dua, Jagan Kumar Sur 
  Abstract: This research examines the motivations for, and obstacles to, establishing a Joint Audit (JA) system in Kuwait. The research includes a survey taken by 190 people and 25 in-depth interviews with key individuals. According to the qualitative study, "auditor performance and collaboration" as well as "market confidence and cost efficiency" are two factors that contribute to the widespread use of JA. According to the research, however, "coordination difficulties and free rides" prevent its widespread use. The study found that JA laws, stricter regulations, and more open financial reporting were all required.In order to restore confidence in financial reporting, the results highlight the need for enhancements to audit quality, investor protection, and communication amongst audit firms. The limited size of the qualitative and quantitative samples used in this study may reduce the external validation. The study's limited generalizability may be attributable to its exclusive emphasis on JA practices in Kuwait.
  Keywords: joint audit; audit quality; motivations; barriers; development; Kuwait.
  DOI: 10.1504/IJAAPE.2024.10068310
   
  
• Classification shifting on annual report readability: evidence from Tunisia  
  by Wiem Dridi 
  Abstract: This paper empirically investigates the effect of classification shifting on annual reports readability. Using panel data from 2010 to 2020 comprising 529 observations of Tunisian listed firms, linear regressions are applied. The study employs McVay's (2006) expected-core-earnings model to measure the classification shifting and two readability measures, the Gunning-Fog Index and Flesch Index to examine the readability of annual reports. The Findings confirm that managers often classify operating expenses as non-operating to inflate operating income. additionally, an association between readability metrics and classification shifting, indicates that firms engaging in this practice produce more complex and less readable reports. This complexity may obscure the company's true performance and earnings management actions, which leads to an increase in incomprehensible information. As the first empirical investigation into the impact of classification shifting on annual report readability, this research contributes valuable insights into the intersection of financial reporting quality and earnings management.
  Keywords: readability; financial disclosure; classifications shifting; information quality; earnings management; core earnings.
  DOI: 10.1504/IJAAPE.2024.10068491
   
  
• Effects of auditor experience on audit fees: A cross-industry analysis based on fair value accounting  
  by Hsiao-Lun Lin, Ai-Ru Yen 
  Abstract: This study examines the cross-industry effects of auditors experience on audit fees. We focus on whether auditors experience with financial clients affects audit fees when auditing financial assets for non-financial clients. Utilising data from public companies in Taiwans nonfinancial industries, we find that audit fees are positively associated with the proportion of Level 3 financial assets held by non-financial clients. However, auditors experience in the financial industry mitigates the fee increase associated with higher proportions of Level 3 financial assets for these clients. These findings suggest that auditors can effectively leverage their financial industry experience when auditing financial assets in other industries. While prior research emphasises within-industry effects of auditors expertise, this study extends the literature by examining cross-industry impacts. Additionally, it contributes to existing studies on fair value accounting by analysing industries beyond real estate and financial sectors.
  Keywords: audit fees; financial assets; auditor experience; industry expertise; fair value accounting.
  DOI: 10.1504/IJAAPE.2025.10069787
   
  
• Do cultural differences bridge the gap between CSR and earnings quality? Evidence from civil law system before and during Covid-19 crisis  
  by Karima Lajnef, Ellouz Siwar 
  Abstract: Delving into the role of cultural dimensions within civil law systems, this work explains how these factors shape the interplay between CSR initiatives and earnings quality, particularly in the pre and post-COVID-19 crisis context. This study investigates the moderating impact of Hofstede's cultural dimensions on the association between Corporate Social Responsibility (CSR) and earnings management. Analyzing a database comprising 36,295 firm-year observations from 2,135 firms operating in civil law countries. Empirical evidence confirms that CSR initiatives effectively mitigate the utilization of earnings management techniques. Notably, the research demonstrates that cultural dimensions act as a significant moderator, influencing the relationship between CSR efforts and earnings quality. Moreover, amidst the crisis, there is a discernible shift in perspective, highlighting the pivotal advantages of CSR in terms of bolstering reputation in the post-crisis scenario. The implications of these findings extend to researchers, investors, and policymakers, offering valuable insights for informed decision-making.
  Keywords: CSR; corporate social responsibility; EM; earnings management; Hofstede cultural dimension theory; civil law system; moderating model; COVID-19 crisis.
  DOI: 10.1504/IJAAPE.2025.10070046
   
  
• Understanding the knowledge of accounting professionals on International Public Sector Accounting Standards (IPSAS) in Ghana  
  by Musah Mohammed Saeed 
  Abstract: Scholars have increasingly focused on International Public Sector Accounting Standards (IPSAS) for their benefits in enhancing transparency and accountability in public-sector financial reporting However, the challenging transition to IPSAS needs attention This study evaluates professional accountants' knowledge of IPSAS implementation in Ghana's Bono region, specifically in selected Municipal and District Assemblies (MMDAs) Data from 68 finance and account officers were collected via self-administered questionnaires, primarily through purposive sampling, and analyzed using descriptive statistics The study reveals a significant lack of IPSAS knowledge among professional accountants in the region's MMDAs, with IPSAS adoption and implementation still in the early stages Respondents also highlighted the considerable cost and complexity of transitioning to IPSAS, along with limited training opportunities and widespread ignorance about IPSAS in Ghana Recommendations include establishing a robust IPSAS compliance framework and launching a comprehensive public education campaign. This study contributes to the limited literature on IPSAS awareness in Africa.
  Keywords: background of IPSAS; public sector adoption of IPSAS; cash and accrual bases of accounting; convergence of IFRS with IPSAS; Ghana public sector accounting; contingency theory; new public management (NPM) theory.
  DOI: 10.1504/IJAAPE.2025.10070362
   
  
• Examining accountants readiness to adopt blockchain-based triple-entry accounting: evidence from the UAE  
  by Amen Abobaker, Sara Elgazzar, Silvia A. Saweris 
  Abstract: The purpose of this study is to examine accountants' readiness to adopt a blockchain-based triple-entry accounting system, aiming to offer a roadmap for its adoption across stakeholders. The data is collected from the responses of 110 UAE-based accountants through an online questionnaire, employing an extended Unified Theory of Acceptance and Use of Technology (UTAUT) model. Weighted Least Squares Regression analysis was utilized to gauge the impact of performance and effort expectancies, along with social influence, on accountants' intention to adopt the blockchain-based triple-entry accounting system. The results revealed a positive correlation between performance and effort expectancy and intention to use blockchain, while social influence showed no significant impact. Additionally, factors like job relevance, accounting information quality, trust, computer self-efficacy, and compatibility were found to influence different aspects of expectancy related to performance and effort, offering valuable insights for adoption roadmap.
  Keywords: blockchain; triple-entry accounting; adoption readiness; UTAUT model; unified theory of acceptance and use of technology model; United Arab Emirates.
  DOI: 10.1504/IJAAPE.2025.10070363
   
  
• Silence is golden? Disclosure of critical audit matters and auditors perception of due professional care  
  by Dongmei Han, Yuwei Guan 
  Abstract: Revised auditing standards now require the disclosure of critical audit matters (CAMs) in audit reports. However, these standards do not explicitly specify whether conclusive evaluations should be provided for these matters, leaving it to the discretion of auditors. Our study utilizes psychological theories and experimentally tests the impact of CAM disclosure formats (with or without conclusive evaluations) on auditors’ perceived due professional care. We find that CAMs with conclusive evaluations lead auditors to perceive a lower level of due professional care compared to CAMs without conclusive evaluations. When considering auditors’ experience, our results show that the absence of conclusive evaluations in CAMs leads both less experienced and more experienced auditors to perceive a relatively high level of due professional care. However, the presence of conclusive evaluations in CAMs leads more experienced auditors to perceive a lower level of due professional care compared to their less experienced counterparts.
  Keywords: CAM; critical audit matter; conclusive evaluations; perception of due professional care; auditor; experience.
  DOI: 10.1504/IJAAPE.2025.10070433
   
  
• Product market competition and audit fees: a firm-level analysis  
  by Muhammad Rofiqul Islam  
  Abstract: Empirical evidence supporting the relationship between product market competition and audit fees faces two significant criticisms. First, the industry concentration ratio remains a poor proxy for product market competition as it fails to recognize firm-level competitive variability within an industry. Second, the generalizability of prior studies is in doubt due to the sample size covering a single or a few industries. The study aims to address these two critics by using text-based measures of product market competition and choosing a large sample covering a more comprehensive range of industries. The text-based measures of product market competition assume that individual firms face unique product market competition. The study found a strong positive association between product market competition and audit fees.
  Keywords: audit fees; product market competition; fluidity index; similarity index.
  DOI: 10.1504/IJAAPE.2025.10070434
   
  

Special Issue on: Accounting, Auditing, Governance and Performance Evaluation in Times of Crisis

• Are environmentally friendly firms more vulnerable to the Russia-Ukraine crisis?  
  by Wajih Abbassi, Sabri Boubaker, Riadh Manita, Dharen Kumar Pandey 
  Abstract: This paper applies an event study approach to assess the effect of the Russia-Ukraine crisis on environmentally friendly firms. Using a sample of 1206 firms from the S&P Global 1200 index covered from 6 January 2021, to 8 March 2022, we find that, ceteris paribus, cumulative abnormal returns are significantly related to the environment score. While the environmental scores positively affect the pre-event window CARs, firms with higher environmental scores are more detrimentally affected during the Russia-Ukraine war. This can be attributed to the expected increase in post-war compliance costs for these firms, given the detrimental effects of the war on the environment. This study contributes to the literature by showing that firms with high environmental scores are not necessarily more resilient to war shock events than those with environmental concerns and by providing empirical evidence regarding firm-specific characteristics that drive event-induced returns, indicating that risks may be diversified based on firm and industry characteristics. This study has policy implications because, while it shows that a high environmental score does not necessarily make a firm more resilient, it sheds light on firm-specific characteristics that drive war event-induced returns.
  Keywords: Russia-Ukraine crisis; environmental score; event study; market model; book-to-market.