ABSTRACT
This paper assesses the extension and timeliness of disclosures of COVID-19 impacts on the financial condition and performance of Colombian companies. A disclosure index was designed based on the Technical Council of Public Accounting guidelines. An exploratory exercise and content analysis were conducted on the notes to the financial statements for the years 2019 and 2020 of twelve companies listed on the Colombian Stock Exchange, which are representative of the primary, secondary, and tertiary sectors of the economy. Although it was identified that the information disclosed has increased with time, the findings show limitations in the extension and timeliness of the information disclosed. It is concluded that the companies studied only disclose the effect of the uncertainty situation when the risk is likely to materialize and not when it is potential, thus reducing the relevance of the information included in the financial statements and affecting the stakeholder decision-making process.
ABSTRACT
PurposeThis study aims to investigate the impact of risk-taking and auditor characteristics on value creation in companies listed on the Tehran Stock Exchange. In addition, it investigates the moderator role of auditor characteristics in the impact of risk-taking on value creation, especially in pre-Covid 19 and post-Covid 19 pandemic.Design/methodology/approachThe information about 199 company in 2014–2021 was examined. In the present study, in accordance with the related theoretical literature and the importance of auditor specialization, auditor tenure and auditor reputation, these factors were considered as the auditor characteristics.FindingsThe present findings based on the generalized least squares (GLS) method showed that risk-taking positively affects the value creation. The auditor characteristics (auditor specialization, auditor tenure and auditor reputation) have a significant positive effect on the value creation. Furthermore, the auditor characteristics enhance the impact of risk-taking on value creation. The results of generalized method of moments method and robust regression analysis are consistent with the GLS results. To take into account the Covid-19 conditions, the data were divided into pre-Covid-19 and post-Covid-19 years. The results showed that auditor characteristics moderate the impact of risk-taking on value creation in pre-Covid 19 and post-Covid 19.Originality/valueThe study highlights the role of auditor characteristics in the value creation, especially in the emerging market. Given that Covid-19 has seriously damaged global economic well-being and has put companies at a double risk, the present findings can be useful for managers, investors and the international community, and help company managers make risk-taking policies and select auditors with appropriate characteristics.
ABSTRACT
Objetivo: Este estudo examinou a capacidade de desempenho financeiro e nao financeiro na previsäo do tempo de publicaçao de relatórios financeiros, moderada pela pandemia da COVID-19. Referenciái teórico: A teoria dos sinais postula que a administraçâo desempenha um papel crucial no fornecimento de informaçöes as partes interessadas sobre as condiçöes da empresa (Brigham & Houston, 2001). De acordo com Spence (1973), as empresas estao motivadas a fornecer informaçöes relevantes as partes interessadas. Se as condiçöes de desempenho sao boas, a empresa tende a acelerar o processo de apresentaçao de demonstraçöes financeiras. Por outro lado, se o desempenho for ruim, há uma tendencia a atrasar a publicaçao dos relatórios financeiros. O longo período de tempo para a publicaçao de relatórios financeiros pode indicar más noticias que a empresa tem, de modo que ela ainda tem que publicar as noticias para o público. Scott (2015) sugere que quando os gerentes souberem que há noticias desfavoráveis sobre a condiçao da empresa no futuro, evitarao publicar estas informaçöes ou pelo menos atrasaräo a apresentaçao das demonstraçöes financeiras. Método: O desempenho financeiro foi medido por quatro indicadores: lucratividade, liquidez e solvencia. Enquanto isso, o desempenho nao financeiro variável foi medido pelo indice de boa governança corporativa (GCG) e pela reputaçao dos auditores. O modelo proposto foi testado com base nos dados quantitativos coletados de 156 empresas de manufatura listadas na Bolsa de Valores da Indonesia (IDX) a partir de 2018 e 2020. A análise de regressao múltipla foi realizada para analisar e interpretar os dados. Resultados e conclusao: O resultado indica que a solvencia, a boa governança corporativa e a reputaçao do auditor foram preditores significativos do período de publicaçao do relatório financeiro. Entretanto, a capacidade preditiva de rentabilidade e liquidez no prazo de publicaçao nao foi considerada significativa. Além disso, os resultados mostram que a pandemia da COVID-19 modera a capacidade de rentabilidade e boa governança corporativa na previsao do prazo de publicaçao. Implicates da pesquisa: O indicador de desempenho financeiro e nao financeiro dá resultados diferentes na previsäo do RWPLK das empresas de manufatura na Indonesia. ROA e CR nao sao capazes de prever o RWPLK, mas DER, GCG, KAP sao capazes de prever o RWPLK. O papel da pandemia COVID-19 foi capaz de moderar a capacidade de ROA e GCG em prever o prazo para publicaçao de relatórios financeiros, mas foi incapaz de moderar a capacidade de CR, DER e KAP em prever o RWPLK. Originalidade/valor: O presente estudo fornece a primeira evidencia empírica sobre o papel moderador da pandemia COVID-19 na capacidade preditiva do desempenho financeiro e nao financeiro para o prazo de publicaçao das demonstraçöes financeiras.Alternate :Purpose: This study examined the ability of financial and non-financial performance in predicting financial reports publication time frame as moderated by the COVID-19 pandemic. Theoretical framework: Signal theory postulates that management serves a crucial role in providing information to stakeholders regarding the condition of the company (Brigham & Houston, 2001). According to Spence (1973), companies are motivated to provide relevant information to stakeholders. If the performance conditions are good, the company tend to speed up the process of presenting financial statements. Conversely, if performance is poor, there is a tendency to delay the financial reports publication. The long span of time for the publication of financial reports can indicate bad news that the company has so that it has yet to publish the news to the public. Scott (2015) suggests that when managers know there is unfavorable news about the condition of the company in the future, they will avoid publishing this information or at least delay the presentation of financial statements. Method/design/approach: Financial performance was measured by four indicators: profita il ty, liquidity and solvency. Meanwhile, variable non-financial performance was measured by the index of good corporate governance (GCG) and auditor reputation. The proposed model was tested based on the quantitative data collected from 156 manufacturing companies listed on the Indonesia Stock Exchange (IDX) from 2018 and 2020. The multiple regression analysis was performed to analyze and interpret the data. Results and conclusion: Result indicates that solvency, good corporate governance, and auditor reputation were significant predictors of the time span of financial report publication. However, the predictive ability of profitability and liquidity on the publication timeframe was found to be not significant. Furthermore, the results show that the COVID-19 pandemic moderates the ability of profitability and good corporate governance in predicting the publication timeframe. Research implications: Financial and non-financial performance indicator gives different results in predicting the RWPLK of manufacturing companies in Indonesia. ROA and CR are not able to predict RWPLK, but DER, GCG, KAP are able to predict RWPLK. The role of the COVID-19 pandemic was able to moderate the ability of ROA and GCG in predicting the timeframe for publication of financial reports, but was unable to moderate the ability of CR, DER and KAP in predicting RWPLK. Originality/value: The present study provides the first empirical evidence on the moderating role of the COVID19 pandemic on the predictive ability of financial and non-financial performance for financial statement publication time frame.
ABSTRACT
Do the EU Recovery Plan and Green Deal (EGD) break with disciplinary neoliberalism? Eschewing binary 'yes or no' answers, this article draws on Gramsci's idea of passive revolution as 'progressive restoration' to analyse these important developments in the European political economy. It offers a balance sheet of 'progressive' and 'restorative' elements and argues that these cohere in an integral response to geopolitical pressure and legitimation problems by the 'Piedmont of Europe' – Germany's power bloc. A concluding section argues that the most significant changes engendered by these initiatives may not reside in the substance in policy but rather in how policy is carried out – in the form. It seems that it is becoming increasingly difficult to depoliticize disciplinary neoliberal governance in Europe. Future research is needed on the nature and implications of this for theory and (progressive) practice. [ FROM AUTHOR] Copyright of Globalizations is the property of Routledge and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full . (Copyright applies to all s.)
ABSTRACT
This study aims mainly to reflect the impact of Covid-19 Pandemic on the auditing of subsequent events of financial lists in accordance with the international audit standard No. (560). to answer questions and test the study hypotheses, the researcher relied on the descriptive analytical approach, and to obtain the necessary data was distributed. After evaluating and judging from a number of specialists on the study community consisting of external audit offices operating in Cairo governorate, New Egypt City, Egypt, Arab Republic of Egypt, and 75 offices, as well as external audit offices operating in the governorates of the Gaza Strip in Palestine and 80 offices. The results of the study proved that there is an impact of Covid-19 Pandemic on the reviewer's design of procedures for obtaining adequate and appropriate audit evidence to identify and discuss subsequent events that need to be compromised with management. The study recommended that governance officials provide the auditor with a written declaration on an amendment if any subsequent events may affect the financial statements in the context of Covid-19 Pandemic, and the reviewers should obtain an understanding and inquiry about any measures put in place by the Administration to ensure the identification of subsequent events in the context of Covid-19 Pandemic. © 2023, An-Najah National University. All rights reserved.
ABSTRACT
Single Audits Pre-COVID-19 The Single Audit Act requires that audits be performed annually, except for certain entities that have been grandfathered in for biennial audits, on behalf of all federal agencies by independent accounting firms or by individual states' internal auditors. Most of these awards were granted in 2021;however, this program was not included in the 2021 OMB Supplement. [...]auditors had to determine which compliance requirements needed to be tested using Part 7 and Part 3 of the supplement. Typically, the audit threshold for a single or program-specific audit of federal awards is based on expenditures. Because for-profit entities are not required to adhere to the audit requirements in 2 CFR Part 200, the SBA has the flexibility to define audit requirements and thresholds specific to the SVOG program. [...]the SBA has defined the audit threshold for a for-profit entity that has received an SVOG award based on the GAAP principle of revenue recognition, specifically applied to recognition of an SVOG award.
ABSTRACT
This study aims mainly to reflect the impact of Covid-19 Pandemic on the auditing of subsequent events of financial lists in accordance with the international audit standard No. (560). to answer questions and test the study hypotheses, the researcher relied on the descriptive analytical approach, and to obtain the necessary data was distributed. After evaluating and judging from a number of specialists on the study community consisting of external audit offices operating in Cairo governorate, New Egypt City, Egypt, Arab Republic of Egypt, and 75 offices, as well as external audit offices operating in the governorates of the Gaza Strip in Palestine and 80 offices. The results of the study proved that there is an impact of Covid-19 Pandemic on the reviewer's design of procedures for obtaining adequate and appropriate audit evidence to identify and discuss subsequent events that need to be compromised with management. The study recommended that governance officials provide the auditor with a written declaration on an amendment if any subsequent events may affect the financial statements in the context of Covid-19 Pandemic, and the reviewers should obtain an understanding and inquiry about any measures put in place by the Administration to ensure the identification of subsequent events in the context of Covid-19 Pandemic. [ FROM AUTHOR] Copyright of An-Najah University Journal for Research, B: Humanities is the property of An-Najah National University and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full . (Copyright applies to all s.)
ABSTRACT
In the context of the war, the external environment is characterized by a growing level of uncertainty. Rising energy prices, the closure of airspace in Ukraine, rising inflation, a 30% decline in GDP in 2022, and the destruction of infrastructure as well as supply chains have necessitated adjustments to the company's operations and changes to its financial plan. The research aims to assess the financial aspects of doing business in the face of unexpected changes. The research methodology is based on the case study of a company that supplies energy resources to Ukraine. The main research methods used are in-depth interviews with the staff to assess the existing strategy, employee motivation system, efficiency of the organizational structure, and financial aspects of the company's activities. The results demonstrate that an important stage in the development of a financial plan in wartime is the audit of business activities. It includes an understanding of the current state of the organizational, financial, and human aspects of the company's functioning. An in-depth interview with the company's personnel shows the level of effectiveness of the interaction of all these aspects of the business. Changes in the financial system involve organizational changes: company structure, motivation system, customer interaction, and service improvement. The study shows that the interaction of organizational, financial, and motivational components contributed to the synergy of the company's resources and their mobilization in the face of the growing risks of a company's crisis. Financial planning by business segments and precision in the distribution of employees' responsibilities increases the level of motivation and involvement of staff in all business processes. Moreover, the distribution of centers and areas of responsibility should be linked to the incentives and motives of employees.
ABSTRACT
Purpose: The article shows the impact of the COVID-19 pandemic on the amount of income tax expense (including current and deferred tax). Methodology/approach: The legal status of income tax in accounting is presented, taking into account issues that should be applied in the pandemic era. An empirical study was carried out based on the content analysis of financial statements for 2019–2021 of entities included in the WIG30. Findings: The pandemic mainly reduced income tax expense while increasing deferred tax assets, after meeting certain conditions, primarily due to tax losses. Originality/value: The article shows the impact of the pandemic on the amount of income tax expense (including current and deferred tax), an area not yet explored. The starting point for future scientific research shows the impact of the pandemic based on another (larger) research sample. © 2023 Stowarzyszenie Księgowych w Polsce Prawa wydawnicze zastrzeżone.
ABSTRACT
Purpose: The article aims to assess whether the COVID-19 pandemic has affected the financial results of selected companies in the development and automotive industries in Poland. Methodology/research approach: The research looked at individual and consolidated annual reports of companies listed on the Warsaw Stock Exchange, covering the real estate and automotive sectors. All (seven in total) annual stock exchange reports of companies listed on the stock exchange from the automotive sector were examined. Furthermore, in the real estate sector (29 out of 29), annual reports of companies listed on the stock exchange were examined. The method used was to analyze the full versions of the narrative sections of the annual separate and consolidated financial statements. The auditor's reports and the enti-ty's management reports were also analyzed. Findings: Two of the seven examined automotive companies recorded a loss and described in their additional explanatory notes the uncertainty regarding the going concern. The audited real estate companies showed no losses and did not present any threats to going concern. Research limitations/implications: The study was limited to two industries representing durable goods. It would also be worth verifying the impact of the COVID-19 pandemic on the financial reporting of companies representing other sectors. Due to the successive waves of the COVID-19 pandemic, it would be interesting to analyze financial statements over three reporting periods. Originality/value: The article verifies the impact of the COVID-19 pandemic on the financial reporting and the financial results of companies in the durable goods sector: real estate and automotive. © 2023 Stowarzyszenie Księgowych w Polsce.
ABSTRACT
During the COVID-19, mostly human activities were hampered. In the heat of the Pandemic, human activities are encouraged to follow the Work from Home (WFH) policy. This creates obstacles to the process of collecting company data by the accountants for audit purposes by the auditors. The Auditors also have to make sure of the sufficiency and relevancy of the audit process that has been determined. In addition to collecting data for auditing, the auditor must also have to be able to detect potential fraud that occurs, With the Work from Home (WFH) policy which indirectly affects the movement of the auditors due to the existence of these limitations become it becomes a new challenge for auditors to continue to be able to detect potential fraud and it is hoped that later the results of the audit will meet with the financial statements users expectation. © 2022 ACM.
ABSTRACT
Esta pesquisa qualitativa permitiu analisar e descrever a natureza das revelações em notas aos estados financeiros anuais de 2019 e intermédios de 2020, em firmas chilenas e peruanas listadas no contexto de pandemia por COVID-19, sob o marco da teria institucional. Os resultados do estudo confirmam que o nível de revelação sobre o impacto da COVID-19 não cumpre com todos os critérios da normativa e recomendações apesar da influência institucional de entes reguladores e firmas de auditoria. Mesmo que algumas empresas revelam informação sobre efeitos financeiros, um grande grupo não tem sido capaz de quantificá-los e tem acabado afetando o cumprimento do objetivo da informação financeira segundo NIIF de utilidade para a toma de decisões. Isto tem levado a encontrar uma influência institucional mimética ou normativa do efetivo cumprimento das NIIF ou recomendações de firmas de auditoria.Alternate abstract:Cette recherche qualitative nous a permis d∂analyser et de décrire la nature des divulgations dans les annotations des états financiers annuels 2019 et intermédiaires 2020 des sociétés cotées chiliennes et péruviennes, dans le contexte de la pandémie de COVID-19, encadrées dans la théorie institutionnelle. Les résultats de l∂étude confirment que le niveau de divulgation de l∂impact de COVID-19 ne répond pas à tous les critères des réglementations et recommandations, malgré l∂influence institutionnelle des régulateurs et des cabinets d∂audit. Si certaines entreprises publient des informations sur les effets financiers, un grand nombre d∂entre elles n∂ont pas été en mesure de les quantifier et ont fini par nuire à la concrétisation de l∂objectif d∂une information financière IFRS utile à la prise de décision. Cela a conduit à trouver une influence institutionnelle ou réglementaire mimétique de la conformité effective aux IFRS ou aux recommandations des cabinets d∂audit.Alternate abstract:Esta investigación cualitativa permitió analizar y describir la naturaleza de las revelaciones en notas a los estados financieros anuales del 2019 e intermedios del 2020, en empresas chilenas y peruanas cotizadas en el contexto de pandemia por COVID-19, bajo el marco de la teoría institucional. Los resultados del estudio confirman que el nivel de revelación sobre el impacto de la COVID-19 no cumple con todos los criterios de la normativa y recomendaciones a pesar de la influencia institucional de entes reguladores y firmas de auditoría. Si bien, algunas empresas revelan información sobre efectos financieros, un gran grupo no ha sido capaz de cuantificarlos y ha terminado afectando el cumplimiento del objetivo de la información financiera según NIIF de utilidad para la toma de decisiones. Esto ha llevado a encontrar una influencia institucional mimética o normativa de efectivo cumplimiento de las NIIF o recomendaciones de firmas de auditoría.Alternate abstract:Under the framework of institutional theory, this qualitative research analyzes and describes the disclosure nature in the notes to the 2019 annual and 2020 interim financial statements of Chilean and Peruvian listed companies in the context of the COVID-19 pandemic. Despite the institutional influence of regulators and audit firms, the findings confirm that the level of disclosure on the impact of COVID-19 does not meet all the regulation and recommendation criteria. Although some companies disclose information on financial effects, a large number of them have been unable to quantify them, affecting compliance with the objective of IFRS financial information, useful for decision making. This has allowed to identify a mimetic or normative institutional influence of effective compliance with IFRS or audit firms' recommendations.
ABSTRACT
Orientation: The coronavirus disease 2019 (COVID-19) pandemic negatively affected borrowers' ability to repay debt, which is expected to influence banks' calculation of their expected credit loss (ECL) allowance. Comprehensive disclosure regarding the application of managerial judgement in calculating ECLs would produce decision-useful financial information. Research purpose: This study explored the effects of the COVID-19 pandemic on the measurement and disclosure of ECL allowances by South African listed banks. Motivation for the study: It is unknown whether decision-useful financial information regarding South African banks' ECLs was produced during the pandemic, mirroring developed countries. Research approach/design and method: Content analysis of quantitative and qualitative data from annual financial statements was employed for a sample of listed banks. Main findings: Banks employed a variety of relief measures to accommodate borrowers, but these relief measures did not automatically trigger a significant increase in credit risk. More loans were subject to lifetime ECLs, causing the ECL allowance to increase substantially during the first year of the pandemic. Forward-looking information as well as postmodel adjustments were employed to measure the ECL allowance. Practical/managerial implications: The ECL allowances of South African listed banks increased during the pandemic. Disclosure in the annual financial statements and identifying ECLs as a key audit matter provided evidence of adequate consideration of the credit risk and forward-looking information influencing ECLs by banks and their auditors. Improved disclosure regarding postmodel adjustments is required. Contribution/value-add: During the COVID-19 pandemic, decision-useful financial information regarding the calculation of banks' ECL allowances was available for South African banks, mirroring developed countries.
ABSTRACT
Orientation: The havoc created by COVID-19 reaffirmed the pervasive effects of pandemics on companies' sustainability, which has become an increasingly important consideration for stakeholders. Research purpose: This study determined the sustainability elements of companies that are affected by pandemics. Motivation for the study: Pandemics' recurring nature is evidenced by history. Knowledge of pandemics' effects on sustainability may assist companies in preparing for and reporting on pandemics, while such information to stakeholders may be important when considering a company's sustainability. Research design and method: The study followed a systematic review. The final sample constituted 30 records, which were thematically analysed. Main findings: A list of sustainability elements of companies that are affected by pandemics is provided. Government-imposed restrictions led to supply and demand shocks, severely threatening companies' financial performance and socio-economic targets. Pandemics also present opportunities to improve business models by increasing focus on relationships, nature and digitalisation. Practical implications: This study may assist companies to minimise the effects of future pandemics on sustainability by urging them to recognise the interplay between sustainability's components. Companies should have some financial leeway and consider the composition of its product/service range (essential versus non-essential) and the delivery thereof (traditional vs. e-commerce), consider and reduce its impact on nature, become more human-centric and finally, revisit their strategy through strong governance. Contribution: Current literature describes some effects of a single pandemic on companies within a specific industry, whereas this study's scope is broadened to consider all pandemics and industries to derive an extensive list of affected sustainability elements. Current sustainability frameworks do not specify pandemic-related disclosure requirements, making the list useful as a reporting guideline.
ABSTRACT
Entrepreneurship is characterized by great uncertainty and great risk in business, and entrepreneurs are personally ready to take risks in their business at any moment, predict future events and adapt to constant changes and to the dynamic market. The aim of this work is to analyze business entities in the Republic of Croatia from 2017-2021. who are obliged to submit annual financial statements, in order to draw conclusions about the decline or increase in business activities during the observed period and whether revenues increased or decreased during the observed period from 2017 to 2021, whether the number of entrepreneurs increased, such as is the trend of net salaries and analysis of all other business indicators. The paper analyzes the data of companies that are obliged to submit annual financial statements to the Financial Agency. Three hypotheses are presented in the paper, H1: business entities in the observed period from 2017-2021 show a decline in all business activities and this hypothesis is accepted, H2: during the COVID-19 pandemic, the number of business entities and the number of employees decreased and this hypothesis is not accepted, H3: during the COVID-19 pandemic, the profits and revenues of companies are lower and this hypothesis is accepted. The research is based on up-to-date and accurate data from info.Biz, the e-service of the Financial Agency. Info.Biz collects accurate and up-to-date data from the financial reports of business entities, which business entities in the Republic of Croatia are obliged to submit to the Financial Agency every business year, according to the Accounting Act. On the basis of data from the info.Biz e-service, numerous conclusions can be drawn about economic indicators and business operations in the Republic of Croatia. Business entities obliged to submit annual financial reports in 2020 record a decline in all business activities and business results, while in 2021 they show a trend of growth in business indicators.
ABSTRACT
The purpose of this research is to test the fraud heptagon research model in detecting fraud in financial statements using eight Beneish M-Score ratios. The data research method uses regression linear methods in terms of testing research hypothesis. Statistical data processing in this study uses the SPSS version 26 program. The object of this research are Indonesia's Transportation and Logistic Industry companies listed on the IDX within 2019-2021. The total sample of this research are sixteen companies or forty eight samples for three years of research which have been determined by purposive sampling method based on certain criteria's. The results of this study indicate that the fraud heptagon research model simultaneously affects the detection of fraud in financial statements. © 2022 ACM.
ABSTRACT
The head of global financial reporting policy at the CFA Institute, Sandy Peters, warns that financial statement users should exercise significant skepticism of management's methods, techniques, and potential creativity in reporting results, following COVID-19 (Bary, 2020). During extraordinary times, the role of professional judgment and discretion becomes more pronounced, as management is forced to make projections with limited precedent. [...]some experts predict that management may be overly generous in their bad debt reserves (V. Burca, D. Mates, O. Bogdan, "Exemplifying the Effect of Big Bath Accounting in the Pandemic," Ceccar Business Review, The Body of Expert and Licensed Accountants of Romania, https://doi.org/10.37945/cbr.2021.02.01, February 1, 2021). Many employees have embraced remote work and have no intention of ever permanently returning to the office. [...]companies looking to lower overhead and administrative costs may be looking for smaller office buildings or locations where space sharing can be optimized. Many holders of lease agreements and long-term contracts will be looking to negotiate new terms, if they have not already. Because the market impact remains unclear, estimating losses with any degree of accuracy could
ABSTRACT
According to recent articles from assorted periodicals, the Manhattan office market was at a risk of oversupply before the pandemic. [...]of COVID, additional commercial space became abruptly available, and there was over 20 million square feet of NYC sublet space actively looking for tenants. [...]although the current reduction in usage of office space would not automatically cause an impairment charge, for small organizations like PCI, it is imperative to seriously consider this collision of ROU and impairment when preparing their financial statements.
ABSTRACT
PurposeThe purpose of this paper is to investigate the relationship between some corporate characteristics, audit quality and managerial entrenchment in Tunisian companies.Design/methodology/approachThe multivariate regression model is used for hypothesis testing using a sample of 224 listed observations on Tunisian Stock Exchange during 2014–2020. An exploratory factor analysis of four variables (chief executive officer (CEO) duality, CEO tenure, CEO seniority and CEO age) is used for calculating a unique index assessing the managerial entrenchment.FindingsThe results show a negative and significant relationship between audit quality and managerial entrenchment. The authors also find that firm characteristics affect management entrenchment. Precisely, corporate financial performance and firm leverage show positive connections with managerial entrenchment (ME). Additional analysis confirms the negative impact of the coronavirus disease 2019 (COVID-19) pandemic on managerial entrenchment level.Practical implicationsThe study's findings have practical implications that may be useful to different stakeholders, policymakers and regulatory bodies interested in reducing management entrenchment. This study offers signals to shareholders about specific governance attributes, namely audit quality, that control the extent of manager's entrenchment.Originality/valueThe originality of this paper consists in focusing on developing countries, namely the Tunisian context;while the managerial entrenchment phenomena has been widely examined in developed markets. Moreover, contrary to the overwhelming majority of previous studies that has used individual indexes for evaluating the entrenchment, the authors calculate a mixed index of managerial entrenchment using the principal component analysis based on four governance mechanisms (CEO duality, CEO age, CEO seniority and CEO tenure).
ABSTRACT
This study examines the association between economic policy uncertainty (EPU) and private firms' corporate donations. Based on resource constraints and the conservation of resources (COR) theory, we argue that private firms are constantly facing resource constraints and their resource conservation motive becomes apparent when EPU is heightened. Therefore, we expect that corporate donations are negatively related to EPU. Using audited corporate donations from 48,903 private firms in Korea during 2002–2019, we find that private firms' donations are negatively related to EPU. We find that private firms operating in more competitive conditions increase their donations, but this positive association between market competition and donations is moderated by EPU. We find that private firms' donations increased when the progressive party is in power, but this positive relationship is also moderated by EPU. Our results suggest that firms reduce their level of corporate giving to conserve resources as a precautionary saving motive when they face higher EPU. Our paper contributes to the strand of literature on corporate donations and EPU by providing evidence that EPU significantly affects private firms' donations. We also find that firms' strategic motives and political pressure to engage in corporate donations are moderated by EPU.