SYNOPSIS Despite emerging research on the adoption and effects of the expected credit loss (ECL) approach introduced by IFRS 9, its operational realities remain largely unexamined. Drawing on evidence from semistructured interviews with senior financial reporting and risk professionals, we examine how preparers implement the approach. We find that preparers design ECL models that are closely aligned with their internal risk management. A forward-looking approach is operationalized through the development of a range of probability-weighted future scenarios. ECL models are highly customized, and one of the key challenges is the need for continuous monitoring. Overall, we find that preparers appreciate the flexibility provided by the ECL approach but also recognize that its implementation entails managerial judgment variability and introduces potential model risk. Our findings should interest auditors, users, and academics interested in the decision-making processes underlying reported numbers as well as standard setters as they consider whether to provide additional guidance.
SYNOPSIS Hybrid work disrupts the controls accounting firms traditionally use to ensure learning and develop professional expertise. Drawing on 42 semistructured interviews with managers and associates in Big 4 firms during the transition from remote to hybrid work, we examine how personnel controls function under these conditions. We contribute to management control research by showing that personnel controls are no longer solely firm-operated mechanisms but co-constructed by firms and associates, reshaping how they produce their intended outcomes. Further, we show that this co-construction redistributes responsibility for learning, requiring more deliberate and effortful engagement from associates. Although personnel controls continue to improve communication and clarify expectations, they become less effective in developing professional expertise, with managers and associates experiencing these outcomes differently. We conclude that personnel controls should not be assumed to simultaneously sustain performance and ensure learning, highlighting the need for employee engagement in the co-construction of control. Data Availability: The data that support the findings of this study are available upon request. The data are not publicly available since they contain information that could compromise the privacy of research participants. JEL Classifications: M12.
SYNOPSIS Yuji Ijiri (1935–2017) helped define accounting as an intellectual field and a social institution. This memorial examines his scholarship and leadership through the themes of accountability and accounting structure. His accountability framework directed attention to the rights and obligations of those giving and receiving an account. We examine how his work on historical cost, momentum, and triple-entry accounting connected measurement to accountability. Drawing on published and archival sources, we connect these ideas to his work within the Graduate School of Industrial Administration (GSIA), Carnegie Mellon, the American Accounting Association, and trans-Pacific scholarly exchange. Building on earlier tributes, we trace the development and reception of his ideas alongside the institutions that sustained his inquiry. His legacy joins formal analysis, attention to accounting’s responsibilities, and stewardship of a diverse scholarly community. Data Availability: The published and archival sources supporting this article are identified in the references, footnotes, and Table 1. Archival records cited in this article are held by Carnegie Mellon University Archives. JEL Classifications: M41; B31; B32.
SYNOPSIS Nonfinancial rating (NFR) agencies improve the transparency of firms’ ESG practices, but their coverage remains incomplete. This study examines whether the information produced by NFR agencies generates social externalities beyond rated firms. Using staggered coverage by four major NFR agencies from 2000 to 2018, we find that uncovered firms have fewer regulatory ESG violations when a larger share of firms in the same state or industry is covered by NFR agencies. The effect is stronger where stakeholder demand for ESG information is higher and for firms with greater visibility to analysts, media, and institutional investors. Additional tests based on headquarters relocation, ESG-related news, violation categories, alternative specifications, an extended 2000–2025 sample, and state-exclusion analyses support this interpretation. Our evidence suggests that NFR agencies not only discipline rated firms but also improve stakeholders’ ability to monitor unrated firms, with implications for investors and regulators facing incomplete firm-level ESG information.
SYNOPSIS In 2018, a Korean regulatory body issued implementation guidance to address inconsistent research and development (R&D) capitalization practices among pharmaceutical companies applying International Financial Reporting Standards (IFRS). Using a difference-in-differences approach, we examine whether this guidance enhances accounting comparability and value relevance. First, we find that the guidance increases R&D capitalization similarity and financial statement comparability among pharmaceutical firms. Second, we find some evidence of improved value relevance. Specifically, although value relevance does not increase significantly on average, the value relevance of book value of equity increases for pharmaceutical firms that restated their financial statements in accordance with the guidance. Taken together, our findings suggest that implementation guidance can effectively complement principles-based standards. Data Availability: Data are available from the sources cited in the paper. JEL Classifications: G14; M41; M48.
