Interpreting IFRS: The Evolving Role of Agenda Decisions

This study examines the evolution of the interpretative support provided by the IFRS Interpretations Committee (IC), the interpretative body of the International Accounting Standards Board (IASB), over the period 2002–2019. The study focuses on its most frequent output, agenda decisions (ADs), which can provide guidance that practice has long considered relevant and has been explicitly considered authoritative since 2020. We investigate whether the IC has provided additional guidance and changed the formulation of ADs over time in response to constituents’ criticism from the perspective of legitimacy theory. We find that the IC has progressively added more explanatory material and formulated ADs in a more complete and nuanced manner so as to gain consequential legitimacy by substantially addressing the constituents’ interpretation demands. This evolution points to the growing role of ADs, which strike a balance between difficult to reconcile objectives. Providing more substantial support to constituents’ submissions can be seen as a balancing act between a more explicit shift from principles to rules, and leaving room for local interpretations that could threaten the consistent application of International Financial Reporting Standards (IFRS). In shedding light on the IC's substantial response to the challenges posed by conflicting pressures and objectives, we add to the standard-setting literature by providing evidence-based insights into under-researched areas of IFRS interpretation. We also respond to calls for more policy-oriented research and offer two proposals to enhance the clarity of ADs in the light of their evolving content and increasing relevance

Can “publishing game” pressures affect the research topic choice? A survey of European accounting researchers

This study explores the uninvestigated area of research agenda setting, which has considerable influence on the societal impact of accounting academia, which the paying-off mentality stemming from a "publish or perish" culture risks jeopardizing. More specifically, it investigates the research topic choice of accounting researchers to ascertain whether and how the "publishing game" pressures induced by the governance principles of new public management influence this crucial decision. Survey evidence shows that European accounting researchers choose their research topics by considering (i) explicit research requests, (ii) short-term publishing opportunities, (iii) practical and educational needs, and (iv) the intellectual needs of the academic community. In this respect, researchers seem to form a heterogeneous community that places varying importance on these factors, suggesting different effects of "publishing game" pressures. The three clusters aim at societal impact through diverse avenues, while the probability of rapid publishing seems to be the primary driver of another cluster, thus revealing a substantial risk of goal displacement. This study contributes to the debate on publishing pressures in accounting academia by complementing the contextualized reflections of previous literature with evidence documenting their effects on what (in addition to how) accounting researchers study. These findings have policy and practical implications that can help policymakers, university managers, gatekeepers of the publishing process, and our entire academic community

Measuring the Effectiveness of National Enforcers in the IFRS Context: A Proactive Approach

It is widely acknowledged that an effective enforcement system represents a crucial element to achieve significant improvements in financial reporting through the adoption of high-quality accounting standards. Indeed, the quality of financial reporting is considerably influenced not only by the standards to be adopted but also by their actual implementation, and consequently by enforcement mechanisms.The topic has generated considerable interest among scholars, who devoted their attention to developing different measures of the quality of the enforcement system. Building upon this literature, this paper aims at exploring the accounting enforcement system and focuses on controls over financial reporting considering two levels, namely the auditing activity and the controls performed by national enforcers.This paper extends the prior literature by proposing a dynamic measure of the accounting enforcement system capturing controls at those two levels. More specifically, the index here proposed focuses on the quality of the accounting enforcement operated by national enforcers in terms of proactivity, intended as the national enforcers’ capability to detect problems not highlighted in the auditors’ opinions, thus shifting the focus from an input to an output perspective. Indeed, the activities of auditors and national enforcers are strictly connected, given that the auditors’ opinion is the first public output of accounting controls and that is normally one of the bases for further investigation by national enforcers. An illustrative empirical analysis is carried out on the German and the Italian contexts to show the potential of the index for enforcement studies.</jats:p

Social media for investor relations: a literature review and future directions

The use of Internet has radically transformed financial reporting and investor relations (IR). More recently, the diffusion of social media (SM) as crucial information channels has opened new avenues for companies‟ dialogue with capital markets, with considerable implications for accounting studies. This paper provides a critical review of the literature on SM in the accounting domain in order to shed light on the ongoing debates in the field with two main objectives. First, it aims to support future research by identifying possible directions to deepen our understanding of this emerging phenomenon. Second, it addresses some crucial issues that are particularly relevant also for companies considering how to participate in SM for IR purposes. Overall, e mpirical evidence highlights several benefits for companies especially if adopting a proactive approach to SM. Further research might offer even stronger contributions if accepting the challenge to encompass the complexity and distinctive features of these media

Towards a systemic approach in financial communication research: Evidence from exploratory case studies

This paper explores financial communication adopting a framework based on information theory elements. In such a perspective, financial communication is intended as a bidirectional and multi-channel process, which can be conveniently analysed as a complex system. The paper aims at exploring that system shifting the focus on the corporate perspective and on activities carried out to prepare messages to be disclosed to the financial community. In particular, the paper investigates activities related to preparation of specific documents and messages so to understand whether companies manage them as a coordinated process. This could shed light over an issue little investigated by existing literature and deliver insights into corporate financial reporting policies, providing a basis for further research. The communication process is explored through multiple case studies, which are not a common choice in disclosure studies even though they are a highly suitable strategy to achieve an in-depth understanding of complex phenomena

The financial communication process: an internal perspective

Il presente lavoro intende studiare la comunicazione finanziaria adottando una visione che abbraccia differenti documenti, occasioni d’incontro e canali, con una concezione della stessa come sistema complesso, che può essere indagato nei suoi principali subsistemi relativi all’azienda, al messaggio e ai destinatari. In una prospettiva aziendale, una visione unitaria del processo appare infatti fondamentale per consentire la formulazione di una strategia di comunicazione finanziaria, raccomandata da numerosi Autori, e la sua conseguente valutazione, dal momento che un approccio strategico a tale attività non può risolversi nella disgiunta considerazione dei messaggi veicolati attraverso differenti documenti e incontri. Lo studio della comunicazione finanziaria è quindi effettuato con una particolare attenzione verso l’azienda e sulle attività con cui vengono preparati i diversi veicoli, che appaiono temi ancora trascurati dalle ricerche sulla disclosure. Tale analisi si fonda sull’idea che una visione unitaria del sistema di comunicazione finanziaria dovrebbe manifestarsi concretamente nelle attività con cui documenti e incontri vengono preparati, che possono essere gestite come un unico processo, che in quanto tale necessita di un certo grado di coordinamento, oppure come una sequenza di attività indipendenti, che devono essere svolte con attenzione all’efficacia del singolo atto comunicativo. In questa prospettiva, il presente lavoro, dopo aver delineato uno schema di riferimento relativo all’intero sistema, si concentra in modo particolare sul subsistema aziendale e su quello del messaggio, al fine di descrivere come si configura in termini concreti la comunicazione finanziaria delle aziende, con particolare riferimento alle attività di preparazione e alle caratteristiche dei messaggi trasmessi attraverso veicoli differenti. L’analisi empirica su questo tema è stata condotta attraverso lo studio di casi, che è apparso la strategia di ricerca preferibile per approfondire l’oggetto di studio con un sufficiente grado di dettaglio, che comporta inevitabilmente la necessità di raccogliere informazioni non pubblicamente disponibili e un’ampia documentazione per ciascuna azienda. Sono stati quindi studiati tre casi relativi alla comunicazione finanziaria diffusa da tre grandi aziende quotate alla Borsa Valori di Milano (Edison, Fiat, Benetton Group), che sono apparse di estremo interesse dal momento che presentano un’articolata struttura interna in termini di soggetti coinvolti nel processo e una disclosure assai ampia e ricca di contenuti. Nello studio della comunicazione finanziaria di tali aziende, per ciascun caso sono stati analizzati dati relativi al processo di codifica delle informazioni, raccolti attraverso interviste dirette agli investor relation officer, e i contenuti diffusi nel triennio 2005-2007 attraverso i principali documenti e materiali pubblicamente disponibili, che comprendono i bilanci annuali, le relazioni infrannuali, i comunicati price sensitive, le presentazioni alla comunità finanziaria e la sezione di investor relation del sito web aziendale