This study examines how accounting and management control practices embedded in a mandated hospital accreditation system govern organisational conduct in public healthcare. Drawing on a governmentality perspective, it analyses how recurring accreditation cycles mobilise power and knowledge in a Spanish public hospital. The findings show that the accreditation system has shifted from a rule-based compliance logic towards a performance-driven calculative regime centred on accounting, measurement and audit. Through benchmarking, standardisation and continuous evaluation, this accreditation renders hospital activities visible, comparable and governable from a distance, while encouraging internalised self-regulation. In doing so, it reframes political and professional disputes as technical problems of improvement and performance, thereby depoliticising key governance choices. The study also shows how the accreditation system reshapes professional subjectivities by combining managerial and clinical rationalities, promoting autonomy in form while intensifying control in practice. By conceptualising the accreditation system as an accounting-centred governance mechanism, the paper contributes to debates on how accountability reforms in public services reorganise visibility, evaluation and professional conduct, while narrowing interpretive flexibility and democratic deliberation in healthcare governance.
In response to heightened accountability pressures, NGOs increasingly use social media to account for their performance, yet little is known about the characteristics of these accounts. Given social media's unique characteristics as a forum for accountability, such as rapidness, multimodality, and multivocality, they could reshape how performance is accounted for compared to conventional fora such as annual reports. Our purpose is to explore the key principles underpinning NGOs' accounts of performance on social media. By applying classical rhetoric (ethos, pathos, and logos) and visual semiotics as a conceptual framework, we conducted a close reading of the Swedish Red Cross's accounts of performance on Facebook in 2021 (77 posts in total) and compared them with the 2021 annual report. The analysis reveals five principles that distinguish accounts of performance on social media from conventional accounting: extended narratorship, individualisation, temporal proximity, visual modality, and serialisation. Together, these principles reflect accounting through lived experience rather than by proxy, which challenges the norms of framing performance in both accounting in general and from an NGO accountability perspective.
In this paper, we examine how local organisational actors make sense of and implement management accounting (MA) practices imported from foreign multinational headquarters by applying a sensemaking lens. Through a longitudinal case study of an automotive multinational in Brazil, the research illustrates a three-phase adaptation process for MA practices: beginning with standardisation, progressing to adjustments to local contexts, and culminating in ongoing refinement. In doing so, this investigation advances sensemaking theory by demonstrating how the cyclical processes of enactment, selection, and retention manifest empirically as distinct temporal phases in the cross-national transfer of MA practices. By focusing on the cognitive changes and interpretive work involved in adopting new MA practices, this study contributes to a nuanced understanding of the intricate process of transferring MA practices in multinational corporations. It emphasises the need for a comprehensive perspective that considers the complex network of technical and cultural contexts in emerging markets, particularly in South America.
The current paper explores the emancipatory potential of biodiversity accounting and reporting by analysing interpretively how listed companies in the United Kingdom and South Africa engaged with biodiversity-related information in their corporate reports. Drawing on the seminal academic research and recent international policy developments, five interrelated elements pointing to transformative accounting and reporting practice are identified: (1) the organisation's rationale for managing biodiversity; (2) the identification and measurement of material stocks of biodiversity; (3) biodiversity-related performance management; (4) governance and assurance practices; and (5) reporting considerations. The elements are applied to a sample of the largest companies in each jurisdiction using a qualitative content analysis with complementary techniques to gauge the level of biodiversity reporting in total and for each element. The analysis highlights disclosures ranging from a weak-form of emancipatory accounting characterised by policy-level reporting and compliance to stronger forms of emancipatory accounting which, owing to action-oriented, context-specific substantiated reporting, point to an underlying change potential at work. By articulating a continuum of biodiversity accounting and reporting practice, the paper extends the emancipatory accounting literature, provides a principles-based framework for assessing the change potential of biodiversity reporting in different contexts and informs ongoing environmental reporting policy development.
Amid growing regulatory intervention in Integrated Reporting practices, this study examines the long-term effect of adopting Integrated Reporting guidelines on firms' Integrated Thinking and Reporting (ITR) performance in voluntary and mandatory adoption contexts. To this end, the analysis focuses on two integrated reporting regimes: (1) corporate South Africa, where Integrated Reporting has been mandatory since 2010, and (2) the voluntary adoption of the International IR Framework globally. The analysis further links the impact of South Africa's mandatory Integrated Reporting model on ITR performance to the strength of the regulatory environment, identifying a condition under which regulatory intervention may drive widespread and persistent positive change in the corporate sector. A causal framework for policy evaluation based on heterogeneous Difference-in-Differences methods is employed to account for firm - and country-level heterogeneity. The findings reveal that mandating Integrated Reporting in South Africa significantly enhanced firms' ITR performance, with effects persisting over time and influenced by the strength of the regulatory environment. In contrast, voluntary adoption under the International IR Framework primarily attracted firms that were already strong performers, suggesting that such adoption likely functioned as a signalling mechanism to communicate existing ITR practices to stakeholders. These empirical insights advance the discourse on the differential effects of mandatory and voluntary reporting regimes, holding particular relevance for the evolving dialogue on the role Integrated Reporting may play within the corporate reporting arena. Among other stakeholders, the implications of these findings are relevant to standard-setters and national and transnational regulatory bodies.
This study explores how organisations leverage environmental management accounting (EMA) and green ambidexterity to translate green knowledge assets into competitive advantage. Drawing on survey data from chief financial officers and analyzing the results using partial least squares structural equation modelling (PLS-SEM), we find that green human assets drive competitive advantage only through EMA, while green structural assets show no significant association with EMA. Green relational assets, however, positively influence both EMA and competitive advantage. We further demonstrate that green ambidexterity, where firms' simultaneous pursuit of exploitative and exploratory green innovation initiatives, strengthens the effect of EMA on competitive advantage. Drawing on the natural resource orchestration perspective, this study offers a novel perspective to EMA research by documenting how organisations can effectively synchronise, bundle, and structure (i.e. orchestrate) various green resources to achieve superior strategic outcomes. It offers important practical insights into how sustainability-oriented initiatives can be harnessed to build and sustain competitive advantage.
Corporate fraud is an important and long-standing topic in the business ethics literature. As an increasingly common natural phenomenon, extreme weather (EW) disrupts business operations and may affect decisions related to corporate ethics. However, to date, there is a lack of theoretical and empirical evidence on how EW affects corporate fraud. On the basis of fraud triangle theory and data from Chinese listed companies from 2011 to 2022, we find that EW significantly promotes corporate fraud, especially in terms of operational fraud, and this finding is verified in a series of robustness analyses. Mechanistic testing shows that EW promotes corporate fraud by increasing executives' pressure to commit fraud, increasing opportunities for fraud, and increasing the tendency to rationalize fraud. In addition, cross-sectional tests show that when CEOs are party members, corporate nationalism is stronger, regional legal sophistication is higher, social trust is greater, and the effect of EW on corporate fraud becomes non-significant. Moreover, we also find that EW is more likely to lead to operational fraud than to information fraud and executive fraud. Overall, our work contributes to the academic debate related to EW and corporate fraud and provides useful insights for preventing corporate fraud and maintaining the order of financial markets.
Exploiting the adoption of mandatory central clearing by US regulators, we explore the effects of this regulatory reform on banks' derivatives offsetting. Using a difference-in-differences testing procedure, we find that derivatives offsetting increases (decreases) for banks with higher (lower) capital ratios after the adoption of mandatory central clearing, in comparison with the control group. The results are economically significant and robust to a variety of alternative specifications and tests. Our findings suggest that banks with different target capital ratios respond to central clearing reform differently. These findings may inform regulators and policy makers about the effects of the central clearing reform and its impact on market transparency.
Business groups - sets of legally independent firms with the same ultimate owner - are prevalent worldwide. This study predicts and finds that corporate fraud at one firm conveys information useful to investors in pricing the shares of its group peers within the same business group. Around the announcement of fraud, the change in share prices of non-fraud group peers corresponds to approximately 15% of that of the fraud firm. Such an information transfer effect is amplified when the economic link between the fraud firm and the peer firm becomes stronger. Changes in peer firm's future prospects cannot explain our findings. Non-fraud peer firms' abnormal trading volume also reacts to the information content of the fraud around the announcement date. Finally, investors consider peer firms' discretionary accruals and controlling ownership as two red flags, incorporating these factors into their decisions.
This paper investigates how management control (MC) practices evolve in nature and interrelationship as control problems develop in a dynamic environment. Drawing on coupling theory, it examines how three MC practices - cultural control, budgeting control, and performance measurement - are (re)coupled across two distinct periods in a Chinese state-owned company. During the organisational transition from a government-oriented model to a more complex hybrid-business model, the findings indicate that control problems increase in both scope and complexity. Correspondingly, the combination of MC practices shifts from more informal culture control loosely coupled with budgeting, towards a more rigid and comprehensive budgeting and performance measurement system, supported by more formal culture control in a tightly coupled combination. The study illustrates how MC combinations evolve from loose to tight coupling through simultaneous adjustments in individual practices themselves and in their responsiveness and distinctiveness when combined. This suggests that flexibility in control may lie in an organisation's capability to adapt - by revitalising existing MC practices, introducing new ones, and reshaping their combinations - rather than in the fixed nature of any single practice or type of coupling. The findings contribute to the literature on MC combination in general, and on MC in hybrid organisations in particular, while offering important practical insights into enhancing the effectiveness of MC in organisations.
This study investigates the impact of minority shareholder voting participation on executive pay disparities within firms. The research utilised the 2014 introduction of online voting in China as a quasi-natural experiment and conducted a difference-in-differences design. The results revealed that after this shock, minority investors increased their empowerment, which led to a significant widening of the compensation gap between executives and ordinary employees. The impact was more significant for firms with lower external governance, higher industry competition, and lower information opacity. Additional tests reveal that online voting expands pay gaps within executive teams, relaxes constraints, and enables international executive recruitment. Moreover, minority rights increase a firm's operating performance due to the increased compensation gap. Overall, the results provide novel evidence of how empowering minority shareholders reshapes corporate policies in complex ways.
International research collaboration has been advocated by universities globally. While international collaborations offer remarkable opportunities for advancing knowledge, they also present unique challenges. Navigating the turbulent waters of international collaboration can be an overwhelming area, with many researchers being faced with the challenge of how to start. In this editorial, we draw upon our collective experience of over 25 years of individual and institutional international research collaborations, establishing partnerships, mentoring others and reviewing the available literature to date. We provide in-depth reflections and offer practical suggestions on the basics, processes, and the many 'how to' aspects of international accounting research collaboration that are so often taken for granted. This paper is structured as a roadmap of 'how to', suggesting 25 focus areas that are worth considering when designing, planning, implementing, and reflecting on your international research collaboration. Our roadmap offers novice researchers, early-career researchers, those 'new in academia', or researchers who are new in collaboration at the international level timely, actionable insights into navigating the complexities of international collaborations. This paper also provides additional food for thought for experienced researchers, enabling the opportunity to reflect on their own experiences.
This study examines the relationship between firms' tax integrity and innovation output. Using the tax credit ratings disclosed by the Chinese State Administration of Taxation as a measure of tax integrity, higher tax integrity is found to be associated with higher innovation output. This result is primarily achieved through the external resource mechanism, including increased credit funds, more trade credit financing, and reduced financing costs. A cross-sectional analysis shows that the impact of tax integrity on corporate innovation output is greater among firms with a poor law environment and a strong corporate tax avoidance motive. This study expands the literature on the factors influencing corporate innovation by investigating a new dimension of tax integrity that demonstrates the economic consequences of corporate integrity. Furthermore, this study provides guidelines for governments on how to enhance the tax credit rating system and improve indicator judgment and disclosure mechanisms, thus further promoting corporate innovation.
Using insights from the reflection literature, the study presents an argument for incorporating a capacity for reflective thinking as an additional dimension of professional scepticism (PS). Calls by regulators for increased PS conflict with the depiction of an auditor's PS as a trait which is difficult to change. This study examines the influence of reflective thinking on PS and how it impacts PS changes over an auditor's career. We explain that two dimensions of reflective thinking, reflection and critical reflection, are important dimensions of PS which facilitate its dynamism. We support this argument with empirical evidence justifying their inclusion as dimensions of a scale designed to measure PS. This evidence is based on the analysis of a large sample of professional auditors. Using this sample, we develop a new PS scale and undertake exploratory factor analysis thereon, evidencing that reflection and critical reflection are dimensions of PS. It suggests a new PS scale incorporating seven dimensions. We term this new scale the Reflective Scepticism Scale (RSS) and validate it using, inter alia, confirmatory factor analysis.
This paper investigates the impact of mandatory auditor tenure disclosure in the auditor's report on auditors' behaviour regarding audit quality. Specifically, we examine audit outcomes following the implementation of PCAOB Auditing Standard (AS) 3101, which requires auditors to disclose the year they began serving consecutively as the company's statutory auditor. The rule became effective for fiscal years ending on or after December 15, 2017. Using a differences-in-differences approach, we assess changes in audit quality by comparing firms subject to the regulation in 2017 with those not yet required to disclose auditor tenure. While previous research has documented investors' reactions to AS 3101, its effect on audit quality remains unexplored. We find some evidence suggesting that the transition from voluntary to mandatory disclosure influenced auditors' decisions, leading to more conservative financial reporting and higher audit quality. Notably, we do not find strong evidence that the effect is more pronounced for firms with long-tenured auditors in the post-implementation period. Rather, the greater transparency, reliability, and salience of tenure information following the PCAOB's mandate appear to have influenced auditors regardless of tenure length. Plausibly anticipating heightened public scrutiny, auditors across tenure levels adjusted their behaviour accordingly, contributing to improved audit quality.
This study examines the efficacy of an innovative public enforcement mechanism: the China Securities Regulatory Commission (CSRC) random inspections. Since 2016, the CSRC has carried out random inspections in which both inspectors and inspection targets are randomly selected. The selected inspectors conduct on-site inspections focusing on information disclosure, corporate governance, and other normative operations of the selected listed companies. Unlike other public enforcement mechanisms, the inspection targets in this approach are completely random. Random inspections are thought to save regulatory costs and overcome problems such as selective enforcement, with the potential to create an effective deterrent for listed companies, resulting in a "governance effect". However, random inspections may also induce a "gambler's fallacy" among executives in the inspected companies, resulting in the "bomb-crater effect". We find that internal control quality decreases significantly in randomly inspected companies, supporting the bomb-crater effect hypothesis. Moreover, the deterioration in internal control quality caused by CSRC random inspections is more pronounced in firms with overconfident executives and in non-state-owned enterprises. In addition, the reduced quality of internal controls triggered by random inspections leads to lower-quality accounting information, an increased likelihood of financial restatements, and more frequent non-standard audit opinions. Overall, our results reveal the presence of bomb-crater effect in CSRC random inspections.
We examine how firms disclose their use of reverse factoring programs (RFPs) - financial arrangements that accelerate supplier payments through third-party financiers - and how these disclosures affect reported financial positions. Using a global sample of 673 firms from 2011 to 2021, we identify the characteristics of RFP adopters, assess external pressures that drive disclosure (e.g. regulatory enforcement, auditors, analysts, and institutional investors), and analyse whether firms actively manage trade payables to avoid disclosing/reclassifying factored amounts as debt. We find that firms with greater financing needs are more likely to adopt RFPs. Firms operating in high-enforcement jurisdictions, or those with significant analyst following and institutional ownership, more often disclose RFPs - especially when the RFPs are material. Still, only 13% of RFP firms provide any disclosure, often with minimal detail. Our analysis reveals that in jurisdictions without mandatory interim audits, some firms significantly reduce trade payables in the fourth quarter to stay below auditor thresholds and avoid disclosure or reclassification. This behaviour is particularly evident in countries with strong enforcement environments. This paydown pattern is absent where interim audits are required. Our study contributes by offering the first large-sample evidence of how firms respond to regulatory pressures surrounding RFP disclosures. It highlights how differences in enforcement and auditing requirements influence financial reporting behaviour and raises important implications for standard setters seeking to improve transparency around supply chain finance arrangements.
Existing research on professional fields highlights how these are riven by various symbolic boundaries. Boundaries have been noted along lines of knowledge, expertise and morality, although many of these are epiphenomena of size. However, the majority of these insights have been generated by looking at the empirical contexts of North America or Western Europe. It remains less clear to what extent such boundaries are evident in relatively new professional fields found in emerging economies. To partially redress this imbalance in existing scholarship, this study reports on an in-depth empirical study into a relatively under researched context - Latvia. It explores what epistemic and moral boundaries are evident in the accounting field in Latvia and how these are contested. We identify a greater multitude of epistemic and moral boundaries than have previously been identified by literature on the professions. Additionally, we illustrate how these boundaries have strong temporal dimensions which are a unique feature of the Soviet legacy that persists in Latvia. The paper thus advances a concept of a profession that is less a coherent grouping of segments in movement that serve different functions and more a chaotic constellation of different factions, each actively contesting the legitimacy of the other.
