Tomorrow’s accounting and society’s future

Despite the growing trend towards greater corporate accountability and increasing revival of social accounting there remains a significant gap between what organisations do, what they are willing to report, and the rights of society. In this concluding chapter, we consider the realities and myths of social accounting in relation to tomorrow’s accounting and society’s future. The chapter begins with a discussion of accounting as a social and institutional practice. It then moves on to consider the issues raised throughout the book and reflects on how the public sector, third sector, cooperatives and family businesses need to adapt and respond to demands for increased social responsibility and demonstrate this through a social accounting and accountability system. The chapter concludes with a discussion of the changing nature of accountability and social accounting, future directions and potential developments within the social accounting arena

ESG practices and the cost of debt: Evidence from EU countries

Using legitimacy and institutional theories, this study investigates whether lending institutions reward firms in 15 EU countries for their environmental, social and governance (ESG) performance and disclosure in terms of lowering their cost of debt capital. Our study distinguishes between ESG performance that is used to indicate an effective commitment to ESG strategies, and ESG disclosure that represents an effort to construct an image of commitment designed to positively influence stakeholders’ perceptions. Supporting a version of legitimacy theory, we find that lending institutions value both ESG performance and disclosure and integrate ESG information in their credit decisions – in that firms with stronger ESG performance have a lower cost of debt, and ESG disclosure has an equal impact on the cost of debt as ESG performance. Although these findings suggest that the market (in context) can engender more desirable social outcomes by rewarding ESG practices, it fails to distinguish between ESG performance and disclosure (which may be contrasted as the more substantive and the more symbolic). Moreover, our results also reflect upon the importance of the role that civil society and the state play in addressing and exploring the limitations of free-market regimes. Specifically, we provide evidence that the impact of ESG performance and disclosure on the cost of debt is more dominant in the stakeholder-oriented countries (where the community is more prevalent). Our main findings are robust to a battery of sensitivity tests, including an alternative measure of the cost of debt, model specifications, and different approaches to address endogeneity. We acknowledge limitations in our research method but point nevertheless to its value in supporting a critical perspective and make suggestions for future research

Does mandating ESG reporting reduce ESG Decoupling? Evidence from the European Union’s Directive 2014/95

Copyright © 2023 The Authors. This paper investigates the impact of Directive 2014/95 (hereafter, ‘the Directive’) issued by the European Union (EU) that mandates the disclosure of ESG information on ESG decoupling behaviour by EU-listed firms and whether the strength of national enforcement systems of member states plays a moderating role in this relationship. Using a difference-in-differences design and employing a propensity score matched sample of 3020 firm-year observations from the EU and the United States, we find that both the passage of the Directive in 2014 and the implementation of the Directive in 2017 have a mitigating effect on ESG decoupling. We also find that the strength of national enforcement systems has no impact on the relationship between the Directive and ESG decoupling. Furthermore, our additional analysis indicates that the effect of the Directive is less pronounced for firms that have their ESG information independently audited. Additionally, we find that the impact of the Directive is more pronounced for firms operating in non-controversial industry sectors. While the Directive is under ongoing revision by the EU Parliament and Commission to be replaced by the new Corporate Sustainability Reporting Directive (CSRD), our study provides timely insights into the effectiveness of the Directive and its impact on ESG information.The authors did not receive support from any organisation for the submitted work

Board gender diversity and ESG decoupling: Does religiosity matter?

Copyright © 2023 The Authors. In this paper, we examine the relationship between board gender diversity and environmental, social, and governance (ESG) decoupling and the moderating effect that religiosity has on this relationship. We utilise an international sample of 26,176 firm-year observations that cover the period from 2005 to 2019. Consistent with the upper echelon theory and the gender socialisation theory, we provide evidence that firms with a more gender-diversified board of directors tend to engage less in ESG decoupling, and this relationship is more pronounced among firms domiciled in countries with a low level of religiosity. We also find that the effect of religiosity on the relationship between board gender diversity and ESG decoupling is more pronounced for firms that engage in greenwashing and those operating in controversial industry sectors. Our study contributes to the growing debate on ESG decoupling, offering policy insights to regulators and policymakers into the role of board gender diversity and religiosity in reducing unethical managerial behaviour.The authors did not receive support from any organisation for the submitted work

IFRS 8 and the cost of capital in Europe

Data availability statement: The data that support the findings of this study are available from the corresponding author upon reasonable request.Copyright © 2022 The Authors. This study examines segment reporting information usefulness after the adoption of IFRS 8 in 18 European Union countries. Specifically, 1) we introduce a new comprehensive measure of segment reporting quality that reflects four different dimensions of segment information, 2) we investigate the impact of segment reporting quality on the cost of equity and debt capital after the adoption of IFRS 8, and 3) we investigate the moderating role of the country-level enforcement system on the association between segment reporting quality and the cost of equity and debt capital after the adoption of IFRS 8. Using a self-constructed segment reporting quality measure and a sample of 884 firm-year observations over the period of 2007 to 2011, we provide evidence that investors and lending institutions find no change in the usefulness of segment reporting after the adoption of IFRS 8. Our study is original in using a comprehensive measure of segment reporting quality. Furthermore, our study is the first to examine the relationship between segment reporting quality and the cost of debt capital after the adoption of IFRS 8 and the moderating role of the country-level enforcement system. Our findings provide useful insights to regulator and accounting standard-setting bodies about segment reporting

The association between earnings quality and the cost of equity capital: Evidence from the UK

Empirical evidence that examines the association between earnings quality and the cost of equity supports theoretical work that information risk is a non-diversifiable risk factor. However, the main body of evidence, centred on Francis et al.'s (2004) seminal work, focuses on earnings quality measures that are based on US GAAP. This study extends the analysis of Francis et al. (2004) for a sample of UK listed firms during the period 2005 to 2011. This setting and time period enables us to examine the effect of IFRS based earnings on the pricing of earnings quality and how this relation is influenced by a period of severe macro-economic turbulence as in the case of the recent global financial crisis. We find a significant negative association between each accounting-based earnings quality proxy considered separately and the cost of equity. Our results also indicate that during the financial crisis the relationship between earnings quality and cost of equity becomes more prominent than in the pre-crisis period. Our results also document that investors place more importance on the innate component of accruals quality than on the discretionary component. Our results should be of interest to US standard setters who are considering adopting or converging to IFRS

Cancer Risk Assessment and Geochemical Features of Granitoids at Nikeiba, Southeastern Desert, Egypt

Different rock types (syenogranite, alkali feldspar granite and quartz syenite intruded by microgranite dikes and quartz veins) were investigated in the Nikeiba region in Egypt. The main components of the studied intrusive rocks, comprised of granites and quartz syenite, are plagioclase, amphibole, biotite, quartz and K-feldspar in different proportions. Ground gamma ray measurements show that syenogranite, quartz syenite and microgranite dikes have the highest radioactivity (K, eU, eTh and their ratios) in comparison with alkali feldspar granite. Geochemically, syenogranite, alkali feldspar granite and quartz syenite are enriched with large-ion lithophile elements (LILE; Ba, Rb, Sr) and high field-strength elements (HFSE; Y, Zr and Nb), but have decreased Ce, reflecting their alkaline affinity. These rocks reveal calc–alkaline affinity, metaluminous characteristics, A-type granites and post-collision geochemical signatures, which indicates emplacement in within-plate environments under an extensional regime. U and Th are increased in syenogranite and quartz syenite, whereas alkali feldspar granite shows a marked decrease in U and Th. The highest average values of AU (131 ± 49 Bq·kg−1), ATh (164 ± 35) and AK (1402 ± 239) in the syenogranite samples are higher than the recommended worldwide average. The radioactivity levels found in the samples are the result of the alteration of radioactive carrying minerals found inside granite faults. The public’s radioactive risk from the radionuclides found in the investigated granitoid samples is estimated by calculating radiological risks. The excess lifetime cancer (ELCR) values exceed the permissible limit. Therefore, the granitoids are unsuitable for use as infrastructure materials. © 2022 by the authors. Licensee MDPI, Basel, Switzerland

Radiological Investigation on Sediments: A Case Study of Wadi Rod Elsayalla the Southeastern Desert of Egypt

The presence of heavy radioactive minerals in the studied granitoids from which the Wadi sediments leads to the study of the exposure to emitted gamma rays from the terrestrial radionuclides, such as238 U,232 Th, and40 K. The geological study revealed that the Wadi sediments derived from the surrounding granitoids, such as syenogranite, alkali feldspar granite, and quartz syenite. The mineral analysis confirmed that the granitoids were enriched with radioactive minerals, such as uranothorite as well as monazite, zircon, yttrocolumbite, and allanite. The mean activity of the238 U,232 Th, and40 K concentrations are 62.2 ± 20.8, 84.2 ± 23.3, and 949.4 ± 172.5 Bq kg−1, respectively, for the investigated Wadi sediments, exceeding the reported limit of 33, 45 and 412 Bq kg−1, respectively. Public exposure to emitted gamma radiation is detected by estimating many radiological hazard indices, such as the radium equivalent content (Raeq), external and internal hazard indices (Hex and Hin), annual effective dose (AED), annual gonadal dose equivalent (AGDE), and excess lifetime cancer (ELCR). The obtained results of the radiological hazards parameters showed that public exposure to emitted gamma radiation can induce various dangerous health effects. Thus, the application of the investigated sediments in different building materials and infrastructures fields is not safe. A multivariate statistical analysis (MSA) was applied to detect radionuclide correlations with the radiological hazard parameters estimated in the granite samples. © 2021 by the authors. Licensee MDPI, Basel, Switzerland.The authors acknowledge the support of Taif University Researchers Supporting Project number (TURSP-2020/127), Taif University, Taif, Saudi Arabia

ESG practices and the cost of debt: Evidence from EU countries

Using legitimacy and institutional theories, this study investigates whether lending institutions reward firms in 15 EU countries for their environmental, social and governance (ESG) performance and disclosure in terms of lowering their cost of debt capital. Our study distinguishes between ESG performance that is used to indicate an effective commitment to ESG strategies, and ESG disclosure that represents an effort to construct an image of commitment designed to positively influence stakeholders’ perceptions. Supporting a version of legitimacy theory, we find that lending institutions value both ESG performance and disclosure and integrate ESG information in their credit decisions – in that firms with stronger ESG performance have a lower cost of debt, and ESG disclosure has an equal impact on the cost of debt as ESG performance. Although these findings suggest that the market (in context) can engender more desirable social outcomes by rewarding ESG practices, it fails to distinguish between ESG performance and disclosure (which may be contrasted as the more substantive and the more symbolic). Moreover, our results also reflect upon the importance of the role that civil society and the state play in addressing and exploring the limitations of free-market regimes. Specifically, we provide evidence that the impact of ESG performance and disclosure on the cost of debt is more dominant in the stakeholder-oriented countries (where the community is more prevalent). Our main findings are robust to a battery of sensitivity tests, including an alternative measure of the cost of debt, model specifications, and different approaches to address endogeneity. We acknowledge limitations in our research method but point nevertheless to its value in supporting a critical perspective and make suggestions for future research

Earnings quality and analysts’ information environment: Evidence from the EU market

This study examines the relationship between earnings quality and analysts’ information environment as measured by analyst following, analysts' forecasts dispersion, and analysts' forecasts accuracy. It uses a sample of all the non-financial listed firms in the 15-member states of the European Union between 2000 and 2015. We find evidence that firms with high earnings quality have a higher analyst following, less dispersion of analysts' forecasts, and more accurate forecasts from analysts. We also provide evidence of a positive link between the strength of this relationship and both the International Financial Reporting Standards and the strength of enforcement regimes in European Union countries. Further, we find that the innate component of earnings quality dominates the effect on analysts’ information environment proxies, whereas the discretionary component is likely to have a negligible impact. These findings shed light on the vital role of earnings quality in helping analysts and investors to make better financial investment decisions