Accounting & Finance Journal Tracker

Bank regulators use peer information for bank evaluations and publicly disclose this information. This study investigates whether the regulatory use and disclosure of peer information induce herding behavior in banks' regulatory capital ratios. I examine this question using a 2004 peer group reform that introduced class‐of peer groups for newly chartered banks, grouping them exclusively with their cohorts, while established banks continued to be compared with similar‐sized banks. The results show that, post‐reform, banks exhibit heightened herding behavior in their regulatory capital ratios. Depending on their relative capital position, banks either become more sensitive to changes in the peer group average or converge toward it. Additionally, I find that under‐capitalized banks adjust loan portfolios to manage their capital ratios, and this gap‐closing behavior is associated with worse subsequent loan quality, higher bank failure rates during the financial crisis, and, at the bank holding company level, larger systemic‐risk contributions. These findings highlight significant implications of regulatory disclosure for bank behavior and stability.

We document that as interest rates rose in 2022, banks largely left long‐duration assets exposed to interest rate risk while shielding the accounting value of their balance sheets. Call report and Securities and Exchange Commission (SEC) data show that only about 6% of U.S. banking assets were hedged with derivatives, and even the heaviest users hedged only a small share of their portfolios. Rather than hedge market‐value risk, banks relied on held‐to‐maturity (HTM) accounting to shield book capital, reclassifying about $700 billion of securities as HTM during the tightening period, more than twice the amount reclassified beforehand. Cross‐sectionally, banks with lower capitalization, more fragile uninsured funding, and greater long‐duration asset exposure were less likely to expand hedging during tightening and more likely to rely on HTM accounting. More vulnerable banks, especially those overseen by less stringent state regulators, were also more likely to shift into HTM. We develop a stylized model showing how higher interest rate risk, through its effects on bank solvency, run risk, and regulatory capital, shapes banks’ incentives to hedge, recapitalize, or rely on HTM accounting. While HTM accounting can help well‐capitalized banks avoid excessively tight capital constraints, it can also weaken hedging incentives among weaker, moderately capitalized banks by allowing them to window‐dress capital ratios while remaining exposed to runs. Our evidence suggests that this latter channel dominated during the tightening episode. Incorporating deposit franchise value into regulatory capital without accounting for run risk may further weaken the effectiveness of capital regulation. These findings carry important implications for regulatory capital accounting and bank risk‐management practices.

We examine whether firms apply partisan standards when responding to employee financial misconduct. Using detailed individual‐level data on financial advisers, we find that advisers who are in the political minority at their firm (political minority advisers) are no different from their colleagues at the same firm and time in the incidence and severity of misconduct, yet following misconduct, they are significantly more likely to depart—a pattern we term “partisan punishment standards.” This pattern is especially pronounced at firms with lower internal information quality (IIQ), proxied with (1) lower external reporting quality (for public firms only), (2) private firms (relative to public firms), and (3) not hiring an independent public accountant to create an internal control report (for both public and private firms). We also document “partisan reporting standards”: Firms are more likely to publicly disclose misconduct by political minority advisers while remaining relatively silent in other cases. Firms that exhibit partisan punishment practices subsequently experience slower growth.

Professional development and training are essential for organizational growth and success, but resource constraints often force managers into a dilemma: Should they train their lower performing or higher performing employees? While lower performers with greater skill gaps can benefit more from training than higher performers, managers must also consider employees’ fairness concerns. Using an interactive experiment, we predict and find that how employees react to their manager's allocation of training resources depends on the prevailing fairness norms in the work environment. When egalitarian norms dominate, such as when employees have little control over their job tasks, lower performers take the receipt of resources for training for granted and react negatively when the manager allocates those resources to higher performers instead. In contrast, when meritocratic norms dominate, such as when employees have more control over their job tasks, higher performers react more negatively than lower performers to not receiving training resources. Additional experiments suggest that these fairness‐norm–dependent reactions are most pronounced under tournament incentives and may disappear under individual performance‐based pay. Overall, our study highlights the importance for managers to consider both employee productivity and the prevailing fairness norms of the work environment when allocating scarce training resources.

We examine how the 2016 Municipal Advisor Regulatory Reform, which professionalized municipal advisors by imposing standards of conduct and minimum competency requirements, affected advisory firms and issuers. Using a difference-in-differences (DiD) research design, we find that the reform improved the quality of financial advice provided by independent municipal advisory firms relative to dealer firms. Specifically, independent municipal advisors assemble higher-quality financing teams and ensure greater financial disclosure compliance and timeliness in the post-reform period. These improvements provide tangible economic benefits to issuers through lower bond issuance costs and smaller underwriter fees. Finally, we document that independent advisory firms gain market share and charge higher fees relative to dealer firms after the reform. Overall, our study provides novel evidence linking the professionalization of financial intermediaries to improvements in the quality of advice, financial transparency, and issuer borrowing costs. Data Availability: Data are available from the commercial and public sources identified in the paper. JEL Classifications: G10; G18; G24; G28; M40; M48.

The past two decades have witnessed dramatic growth in passive investing via exchange-traded funds (ETFs). To the extent that ETF flows reflect nonfundamental investor demand, large ETF flows may push the prices of the underlying stocks away from their fundamental values. Consistent with this conjecture, I first find that ETF flows chase past fund performance, suggesting that ETF flows contain a systematic nonfundamental demand component. I then document that ETF flow-induced trading is associated with contemporaneous stock price increases, followed by return reversals. Accounting-based valuation tests show that ETF flow-induced trading is negatively associated with value-to-price (V/P) ratios, consistent with overvaluation. The effect strengthens for specialized ETFs and stocks with high short-selling constraints. Finally, firms with high ETF flow-induced trading behave in ways typically associated with perceived overvaluation. Data Availability: Data are available from the public sources cited in the text. JEL Classifications: G14; G32; G40; M41.

We show that favoritism biases subjective evaluations and that the presence of a third party can mitigate this bias. Using archival data from professional ski jumping, we find that, controlling for objective performance, judges favor athletes of their own nationality and athletes who have a compatriot on the panel. We predict and provide evidence that in-person observation by an audience is associated with lower levels of favoritism compared with third-party observation via mediated communication. We contribute to the accounting literature by highlighting how in-person observation by a third party can reduce the likelihood that favoritism biases subjective evaluations. Data availability: The data used in this study are publicly available from open-access sources. JEL Classifications: D91; M40; M51; L83; Z20.

Digitalization is transforming the audit profession. Apprenticeship norms prescribe that knowledge flows down from supervisors to subordinates, but digitalization increasingly positions junior auditors as experts in emerging technology. Consequently, supervisors can learn from subordinates. This reversal challenges long-standing apprenticeship expectations, yet little is known about how it unfolds or the tensions it creates. Against this backdrop, we examine tensions that can arise when subordinate auditors share their knowledge with supervisors. Drawing on 51 semistructured interviews and guided by theory, we identify four recurring roadblocks to upward knowledge sharing: junior auditors' status motives, “same as last year” routines, status insecurity among immediate supervisors, and defensiveness when juniors cross perceived knowledge “lanes.” We also find a rare, countervailing pathway: the emergence of informal champions who legitimize junior auditors' contributions. Our study deepens understanding of how digitalization transforms team learning in audits and shows how historical structures and norms evolve under new conditions. Data Availability: Data were obtained from interviews. JEL Classifications: M41; M42; M51.

Using PCAOB data, we examine variation in auditor-employed tax experts’ involvement to assist the audit team. Tax expert hours average 5 percent of total audit hours and are positively associated with several proxies for the complexity of tax estimates. Greater tax expert involvement correlates with a higher detection rate of tax-related internal control material weaknesses (ICMWs) and a greater frequency of subsequent tax-related restatements. However, earlier tax expert involvement is associated with fewer ICMWs, although it is not significantly associated with subsequent restatements. Overall, our findings provide new evidence on how the timing and intensity of tax expert involvement relate to audit outcomes. Although involving tax experts is a typical response to auditing complex estimates, their involvement alone does not fully mitigate restatement risk. Importantly, timely coordination between the audit team and tax experts plays a critical role in ensuring high audit quality. Data Availability: Audit engagement data from the PCAOB are proprietary; other data are from public sources. JEL Classifications: M4.

Using IRS tax return data for private C corporations, we examine the relation between GAAP audits and IRS enforcement outcomes. Among IRS-audited tax returns, we find that those with audited GAAP financial statements have fewer and smaller proposed deficiencies. These effects persist after controlling for tax preparers. Furthermore, we estimate that the explanatory power of audited GAAP financial statements is comparable to that of external debtholders. Audited GAAP financial statements are also associated with a higher likelihood of unagreed proposed deficiencies, more detailed tax return disclosures, and fewer IRS audit hours, all of which are consistent with more defensible tax positions. Tax returns with audited GAAP financial statements exhibit greater initial voluntary compliance and generate smaller proposed deficiencies per IRS audit hour. These results inform private firms as they weigh the costs and benefits of financial statement audits and the IRS as it allocates enforcement resources. Data Availability: The IRS provided confidential tax information to Michele S. Mullaney pursuant to an agreement under the Intergovernmental Personnel Act of 1970 through the Statistics of Income Division’s Joint Statistical Research Program. JEL Classifications: H25; H26; M41; M42; M48.

This paper studies the career trajectories of individuals who exit auditing. Using individual-level employment data, I document that ex-auditors transition into a range of positions, especially in accounting and finance, and that ex-auditors who transition into accounting or finance roles are more likely to be promoted than peers in the same roles without an auditing background. These results suggest that auditing experience is not only associated with varied career options but also with advancement in those options. These promotion advantages are more pronounced for ex-auditors who obtained relevant industry or regional exposure through auditing, who were affiliated with Big N audit firms or with audit offices with greater market share or task complexity, who have three to five years of audit tenure, or who transitioned into positions with greater skill overlap with auditing. Together, this paper provides large-sample descriptive evidence that sheds light on the option value of auditing. Data Availability: Data are available from the commercial data providers identified in the paper. JEL Classifications: J24; J62; M42.

We study how CEOs’ personal tax incentives shape their share pledging decisions and firms’ restrictions on the practice. Pledging shares entails using company stock as collateral for personal loans, enabling executives to obtain liquidity without making a taxable sale of appreciated shares. Using pledging data from 2006 to 2024, we find a robust positive relation between CEOs’ unrealized capital gains tax liabilities, or tax burdens, and share pledging. This relation is weaker when interest rates are high, consistent with CEOs’ trading off tax benefits against borrowing costs. After Institutional Shareholder Services discouraged share pledging in 2012, firms with high-tax-burden CEOs were slower to adopt antipledging policies and, when they did adopt, chose less restrictive policies. Firms that adopted strong antipledging policies subsequently increased CEO cash pay and stock awards. Our evidence suggests that share pledging helps executives manage personal tax lock-in and that firms consider this benefit when restricting pledging. Data Availability: Data are available from the public and subscription sources identified in the text, subject to applicable data-use restrictions. JEL Classifications: G30; H24; J33; M52.

We explore the contract design of sustainability-linked loans (SLLs), a rapidly growing form of ESG-labeled debt that ties loan pricing to firms’ sustainability performance. Using a global SLL sample issued between 2017 and 2023, we examine whether SLLs are structured to discipline borrowers with weak ESG performance through stringent sustainability-linked provisions. We find no association between borrower ESG performance and the rigor of SLL provisions, suggesting that SLLs are generally not designed as incentive contracts. Instead, SLL contract design aligns more closely with ESG branding and credit-product-expansion motives: borrowers leverage SLLs to enhance legitimacy and visibility and to attract additional capital, whereas lenders can convey their ESG commitment, cater to investor demand for ESG-labeled debt, and expand their credit product offering. Overall, our evidence suggests that SLLs function primarily as symbolic labels rather than credible mechanisms for driving meaningful improvements in firms’ sustainability outcomes. Data Availability: Data are available from the sources cited in the text. JEL Classifications: M14; M41; G21; G32; Q56.

We examine the work of the International Accounting Standards Board (IASB) on accounting for carbon emission allowances. Despite commencing work in 2002, no accounting standard or guidance has been put in place to date. To understand how a standard-setter defends its legitimacy while not settling this important financial accounting issue, we conduct a qualitative case study of over two decades of archival materials. We investigate nonproduction of a standard as a means for the IASB to protect legitimacy in circumstances where standardization would leave it open to controversy and resistance. Building on institutional research on communication, we show how nonproduction unfolds through four communicative patterns: commitment signaling, equivocal messaging, conveying complexity, and downplaying urgency. Our study provides new insights into how standard-setters navigate difficult-to-settle accounting issues of wide public concern. It also shows how communication shields standard-setters’ legitimacy by prolonging stakeholder engagement and postponing closure on a contentious accounting issue.

Audits of complex fair value estimates involve evaluating and challenging key client assumptions. Auditors generally lack the necessary expertise to perform this work, and thus, they often engage valuation specialists to perform this audit work. However, valuation specialists primarily perform advisory work and may not put enough care into their audit work. We examine whether valuation specialists' psychological ownership of audit work and auditors' infringement on that work affect specialists' judgment quality. Using a survey and an experiment with practicing valuation specialists, we find that higher psychological ownership improves specialists' evidence evaluation and judgments, but only when auditors do not behave intrusively by infringing on their work. When auditors behave intrusively, the benefits of specialists' higher psychological ownership disappear. Our findings show that audit quality depends not only on specialist behavior but also on auditor interactions with specialists. Our study offers practical guidance to audit firms on how to organize audit work and manage internal working relationships between auditors and valuation specialists.

As firms increasingly rely on collaborative innovation to develop new technologies, they face a growing tension between signaling their technological capabilities and protecting sensitive information. This tension is especially important in co‐patenting settings, where firms jointly develop innovations and operate in a more interconnected information environment. We examine how firms' narrative R&D disclosures are associated with collaborative innovation, measured by firm‐level co‐patents (i.e., patents jointly owned by multiple entities). Using data for US public firms from 1996 to 2017, we find that firms with more co‐patents tend to disclose less R&D information in 10‐K filings, consistent with heightened proprietary cost and negative externality concerns. This negative relationship is stronger with greater competition, weaker intellectual property protection, a greater number of partners, or repeated collaborations with the same partners. However, the relation between co‐patenting and R&D disclosures becomes positive when firms collaborate with universities, consistent with signaling incentives. We also find that firms are more likely to highlight collaborations in their 10‐Ks when forming new partnerships, working with universities or public firms, or leveraging partners' complementary assets. Overall, our results suggest that firms' R&D disclosure choices are influenced not only by their own proprietary concerns but also by partner‐related disclosure externalities and signaling incentives. Our findings highlight the importance of considering collaborative innovation arrangements when interpreting firms' R&D disclosures. They also suggest that managers should tailor R&D disclosure strategies to the characteristics of their collaborations.

We investigate the development of professional skepticism prior to entering the accounting profession and consider opportunities for enhancing it through university instruction. In two longitudinal studies of 857 participants, we track performance over several years. Students with higher levels of trait skepticism perform better in accounting and auditing courses and score higher on their first attempt at the Certified Public Accountant (CPA) exam. However, students with lower trait skepticism demonstrate strong perseverance and ultimately pass the exam at similar rates. Audit instruction affects students differently: Those with the lowest initial skepticism show significant increases, while those with the highest initial levels show significant decreases. Trait skepticism is positively associated with initial risk judgments, but audit instruction reduces these differences by increasing risk perceptions across all students. Trait skepticism does not influence self‐selection into the accounting major. However, women with higher trait skepticism are more likely than men to choose auditing careers. In sum, these findings suggest that audit firms and educators should use trait skepticism assessments as an important developmental tool to identify promising candidates, diagnose training needs, and tailor support for those with lower initial levels of the trait.

We develop a method for estimating the private value of knowing the future realization of some financial statistics, and then we apply the measure to the familiar ratios from the DuPont decomposition of return on equity. The estimation is grounded in the standard rational expectations model, adapted to accommodate relative risk aversion, and determines an investor's willingness to pay for information denominated in units of a riskless asset (e.g., money). The method can accommodate different levels of investable wealth, multiple assets, and any information system regarding those assets. We use this method to document several interesting contrasts. An investor with $1 million in wealth who already knows all the current DuPont ratios, as well as the most recent analyst forecast, would be willing to pay $2861 to know all of next year's ratios. This amount increases to $3158 for firms below the median size. We find that the value of financial information is higher in periods of high sentiment and for firms that are hard to value or hard to arbitrage (i.e., firms with high sentiment exposure). In practical terms, this suggests investors prioritize their information search to small, young, loss‐making, high‐growth, low book‐to‐market, non‐dividend‐paying, and illiquid firms. In terms of the DuPont components, we find that knowing next year's operating profit margin alone is worth $1226, whereas knowing next year's leverage is worth only $170 and knowing next year's sales growth is worth only $184. In practical terms, this suggests that investors allocate more attention to forecasting profitability and less attention to forecasting sales growth. Finally, we demonstrate that the estimated value of financial statistics increases substantially when we assume the investor can trade in the firm asset and can also hedge using an industry exchange‐traded fund (ETF). This result suggests that professional investors integrate their information search with their hedging behavior.

Financial accounting standard setters recently changed the accounting for estimates involving credit risk. The change shifted the accounting from an incurred‐loss model (ILM), which is based on credit‐risk conditions that exist at the time of the estimate, to a model based on expected credit losses over the life of the asset in question (ELM), which considers expectations of future conditions. Our paper is based on the theoretical premise that ELM will reduce surprise via its Day 1 forewarning, which, in turn, should lessen the potential for hindsight bias (i.e., Monday‐morning quarterbacking) and judging management as having made a poor quality lending decision if an actual credit loss later occurs. Three experiments support this premise, revealing when ELM accounting should have a differential impact relative to the prior accounting.

We examine how GAAP‐based restrictions on managers' discretion over financial reporting influence financial statement users' efforts to acquire disclosure from management. During the question‐and‐answer part of a firm's conference call, we find that GAAP‐based restrictions are associated with more “account‐specific” questions by analysts (i.e., questions related to specific financial statement accounts). Managers appear to adjust current and future disclosure in response to analysts' questions, particularly when GAAP is restrictive: When an analyst asks a question about a particular account, managers are more likely to provide corresponding account‐specific information in their very next comment during the current call and in the presentation part of the next quarter's call. Furthermore, our tests suggest that when managers answer analysts' account‐specific questions, analysts' forecast quality is higher. Our study sheds light on the dynamic nature of the disclosure process between the constraints that managers face when preparing financial reports, users' efforts to acquire more financial statement information, and managers' provision of additional information. Overall, our findings suggest that users play an important role in triggering management disclosures and identifying the disclosures that are useful. Our analyses inform (1) standard setters, by showing that restrictions of reporting discretion shape not only mandatory reports but also the voluntary disclosure that emerges through manager–user interactions, and that restrictive GAAP may impose information acquisition costs on financial statement users; (2) managers, by showing that they can preempt the information deficiency created by restrictive GAAP through supplemental disclosure; and (3) analysts, by showing that they can achieve higher quality forecasts by actively soliciting information about accounts for which GAAP constrains what financial statements convey.

This paper examines managers' strategic use of counterpoised disclosure, defined as the concurrent dissemination of product information to mitigate the expected impact of a material negative disclosure about another product. We focus on the biopharmaceutical industry, where individual drug outcomes have significant valuation implications. As such, investors rely heavily on product‐level disclosures in this industry, which is characterized by high uncertainty, information asymmetry, and limited traditional financial metrics. Using 8‐K filings and press releases (8‐Ks/PRs) reporting drug development milestones, we empirically support three predictions. First, managers are more likely to provide counterpoised disclosures in 8‐Ks/PRs revealing negative news (e.g., Food and Drug Administration [FDA] rejections) than those revealing positive news (e.g., FDA approvals). Second, we confirm that such disclosures attenuate negative market reactions. Last, we document that counterpoised drugs are more likely to progress through subsequent FDA approvals as compared with those that do not receive counterpoised disclosure. Combined, our findings suggest counterpoised disclosure reflects a strategic managerial disclosure mechanism used to assist investors in assessing the valuation implications of a negative product signal within the firm's broader drug development portfolio.

Recent AICPA surveys indicate disproportionate attrition among Black professionals attaining partnership in US public accounting firms, underscoring the need to better understand their experiences. Despite repeated calls for examination, understanding of these experiences remains limited, partly due to the difficulty in accessing the few Black partners in public accounting. To address this gap in the literature, we interview 26 Black professionals (20 partners and 6 aspirants) to explore how they navigate their journey to partnership in predominantly White firms. We identify three key milestones necessary for partnership: finding mentors who provide honest feedback, gaining career‐building experiences, and being seen as a culturally legitimate leader who aligns with organizational norms. By recalibrating their practices, Black professionals achieve partnership by decoding unwritten rules of the organization to build relationships with decision‐makers, obtain developmental feedback, access challenging assignments, and carefully balance the organization's cultural fit requirements with their personal identity. While these practices help some professionals reach partnership, the path remains uncertain, emotionally taxing, and often shaped by sponsorship, timing, and luck. Our findings suggest that firms can streamline the path to partnership by formalizing mentoring and sponsorship, distributing candid feedback and high‐visibility assignments more equitably, and making promotion criteria transparent—so that advancement depends less on luck and on the ability to decode unwritten rules. More broadly, our findings indicate that lasting change rests with organizations reshaping these conditions, rather than with individuals' efforts alone.

The capacity of firms to communicate effectively with investors during periods of disruption is a critical but understudied dimension of corporate adaptability. The COVID‐19 pandemic offers a rare empirical setting to observe such adaptability: It eliminated in‐person investor events almost overnight, forcing firms to either withdraw from investor engagement or pivot to virtual formats amid extreme uncertainty. Using hand‐collected data on investor relations (IR) events from 2019 to 2024, we examine who adapted to virtual IR, when they adapted, and the capital market consequences of that adaptation. We find that firms with higher digital readiness and more gender‐diverse boards were early and sustained adopters of virtual IR, that the informational benefits of virtual formats are concentrated in periods of heightened uncertainty, and that visibility benefits persist as conditions normalize. The findings imply that disclosure adaptability during a crisis hinges on organizational and digital capabilities built ex ante and suggest that virtual and in‐person formats serve distinct functions as conditions stabilize. Our study has practical implications: CEOs, CFOs, and IR teams may benefit from maintaining virtual IR as a crisis‐ready capability that broadens investor reach and preserves communication during disruption, while continuing to draw on in‐person engagement for richer interactions, credibility assessment, and deeper discussions.

Mandatory audits of internal controls over financial reporting (ICFR), intended to strengthen financial reporting processes, may also have implications for broader organizational compliance systems. Increased scrutiny of financial controls could either enhance overall control quality, yielding benefits for nonfinancial controls, or induce firms to reallocate resources away from those areas. We exploit quasi‐exogenous variation in financial control scrutiny arising from (1) the initial implementation of ICFR audits, (2) the subsequent relaxation of ICFR auditing standards, and (3) the introduction of management assessments of financial controls absent concurrent ICFR audits, to examine how changes in external scrutiny affect Food and Drug Administration (FDA) inspection findings, an important form of regulatory noncompliance with direct public health implications. Our results show that the introduction of ICFR audits is associated with a reduction in FDA inspection findings; however, these benefits reverse when ICFR audit scrutiny declines. Mechanism analyses suggest that remediation of control deficiencies, investments in information systems, and expanded internal audit functions facilitate spillovers to compliance controls. Importantly, we find limited evidence that management assessments alone, without concurrent ICFR audits, generate similar spillover effects. Overall, our findings suggest that internal control systems operate as integrated organizational processes rather than isolated financial reporting mechanisms and that external scrutiny plays a critical role in enabling spillovers across control domains. These insights have implications for audit committees, auditors, regulators, and other stakeholders.

This study examines how a reduction in analysts’ visibility, resulting from brokerages’ switch to anonymous forecasts on Eikon, affects earnings forecast quality. Using a difference-in-differences design, we find that treatment analysts respond by issuing more accurate forecasts in the post-anonymization period. Treatment analysts who improve forecast quality the most can sustain visibility, as reflected in their coverage by the financial media, enhance their likelihood of being voted as star analysts, and induce greater client trading. These results are consistent with analysts’ incentives to offset the reduced visibility so as to advance their careers and increase trading commissions for their brokerages. We further show that treatment analysts use a set of visibility-enhancing strategies, including issuing broader and more frequent forecasts and setting bolder target prices. Our findings suggest that reduced visibility can prompt analysts to respond strategically in ways that can improve information quality.

Purpose This paper explores how healthcare workers' emotional experiences, moral deliberations and relational encounters with others influence the way personal accountability is perceived, negotiated and enacted in emotionally demanding organisational settings. Design/methodology/approach The interpretive case study of a large Italian nursing home draws on organisational documents, direct field observations and semi-structured interviews. Interviewees were also invited to describe their emotional experiences through images, which were interpreted as metaphors capable of revealing subtle, tacit and difficult-to-verbalise emotional reflections. Findings Emotional labour transforms personal accountability into an emotionally and socially performative practice. Healthcare workers continuously negotiate tensions that emerge from conflicting personal values, professional ideals, organisational display rules, patient expectations and their families' emotional demands. They mobilise emotional management strategies, especially surface acting and expressive or corporal techniques, to reconcile the emotions they feel with morally and professionally appropriate conduct. Empathy emerges as a fragile but crucial resource that enables healthcare workers to preserve their emotional integrity while responding to the needs of others. Research limitations/implications Organisations can support personal accountability by acknowledging emotional complexity, encouraging positive emotional display, protecting emotional authenticity and providing safe spaces for emotional reflection. Emotional monitoring, however, may constrain workers' agency and intensify emotional dissonance. Originality/value The paper theorises the emotional dimension of personal accountability. It demonstrates how personal accountability becomes performative as it turns into a social, relational and emotional practice.

Purpose This study is motivated by the progressive loss of biodiversity, the impact of coal mining on it, and the need for companies to report transparently on biodiversity. The study aims to investigate how the largest coal mining companies across major coal-producing regions (Australia, China, India, Indonesia, the EU, and the USA) account for biodiversity in their corporate reports and examines the institutional pressures associated with these reporting practices. Design/methodology/approach We adopt an exploratory qualitative design and perform a cross-regional analysis of 28 major coal mining companies from six regions. We apply content analysis to examine biodiversity reporting and employ institutional theory to evaluate the coercive, mimetic, and normative pressures associated with these practices. Findings Our findings indicate weak and fragmented biodiversity reporting, with a notable trend towards more comprehensive reporting in Indonesia and India. We identify a pattern of fragmented isomorphism, in which common reporting responses coexist with substantial regional variations associated with differences in institutional pressures across regional contexts. Practical implications We recommend mandatory reporting obligations aligned with recognised voluntary standards, including species- and context-specific indicators to support more substantive biodiversity impact disclosure. We further emphasise the importance of biodiversity expertise in reporting processes and strengthening biodiversity-related competencies in business education. For companies, industry-specific frameworks can support them in identifying context-specific biodiversity impacts and developing science-based, time-bound biodiversity targets. Originality/value The study contributes to biodiversity reporting and institutional theory by identifying fragmented isomorphism within a single high-impact industry, where differences in institutional pressures across regional contexts are associated with non-uniform reporting patterns.

Purpose To analyse poverty-related literature within the field of accounting and outline a future research agenda. Design/methodology/approach We identify and collect poverty-related research within accounting before drawing on the writings of Brighenti (2007, 2010), in particular the notion of “field of visibility”, to analyse the literature. Findings Drawing on Brighenti (2007, 2010), we identify what exists in the literature as fields of visibility about poverty-related accounting academic knowledge. By analysing these fields of visibility, we also begin to interrogate the invisible – that is, what may be, but is not (yet), an object of attention and consideration. It is through this process of analysing the visible and interrogating the invisible that we discuss knowledge within the field, its implications and propose possible future research avenues. Originality/value Analysing the literature through Brighenti (2007, 2010) enables us to contribute to the poverty-related accounting literature by considering both visibilities and invisibilities. In addition, we contribute to methodological approaches to literature reviews within accounting through outlining an approach that departs from structured literature reviews and their variants, which are becoming increasingly popular in accounting yet are often limited in their potential to provide sufficient relevant insights into some topics.

Purpose This study focuses on the voice of small shareholders in annual general meetings (AGMs) to explore how their marginalization unfolds. We investigate how managerial discourse constitutes small shareholders as marginal subjects and why they participate despite this marginalization. Design/methodology/approach We adopt a discourse analysis approach informed by the Foucauldian lens of power and governmentality to interpret the minutes of the four key AGMs of one of the world's oldest banks, which trace the bank's passage from growth to crisis. Findings The analysis shows that managers organize AGMs through the control of timing, sequencing, and procedural structures, limiting substantive dialogue with small shareholders while preserving procedural legitimacy. We interpret the AGM as a disciplinary dispositif operating through technologies of power that marginalize small shareholders. Shareholders raise concerns extending beyond investment interests to employees, consumers, the local community, and personal recognition. They continue to participate because they misrecognize the AGM as a democratic arena. Misrecognition sustains the illusion that voice may influence governance, while loyalty sustains continued engagement despite marginalization. Originality/value We explain how marginalization is reproduced over time and conceptualize shareholder marginalization as a recursive process by bringing Foucault's analytics of power and governmentality into dialogue with Habermas's concept of ideal speech. Findings highlight how seemingly participatory mechanisms can produce exclusion. This process may occur in settings where communicative events are structured to maintain authority while enacting procedural legitimacy. The risk that AGMs fall short as platforms for accountability warrants attention given the global adoption of purely virtual formats.

Because audit firms’ client portfolios increasingly include multinational companies, firms promote international experience among their personnel. We interview audit partners to understand their perspectives on why auditors obtain this experience, its benefits and challenges, and how it influences their ensuing audit work. We then conduct empirical analyses to examine how international experience affects subsequent client assignments, audit outcomes, and partners’ career opportunities. We find that international experience is associated with assignments to clients with more foreign operations, higher audit efficiency for global clients, and promotion to audit firm leadership roles. However, we find little evidence that international experience affects audit quality. Our study provides important implications for audit personnel and firms as they weigh the costs and benefits of international rotations and training. Data Availability: All data used in this study are available from public databases or profiles of individual auditors. JEL Classifications: M42.

This paper synthesizes academic studies published between 2015 and 2025 examining the relation between auditor independence and audit quality. We review evidence from the literature related to regulatory and professional factors (e.g., nonaudit services, auditor tenure, auditor switching), organizational factors (e.g., client importance, client dismissal of the auditor, social bonding), and individual auditor attributes (e.g., professional skepticism, expertise, and ethical orientation). Contemporary auditor independence research reports mixed and context-specific findings. For example, nonaudit services can either impair or enhance audit quality depending on service type, regulatory safeguards, and knowledge spillovers. Mandatory partner rotation tends to enhance audit quality, although mandatory firm rotation yields limited benefits and higher costs. We highlight the need for more research on independence and auditors’ duty to the public interest, proposing future directions to inform policy, practice, and standard setting. JEL Classifications: M40; M42; M48.

The issuance of PCAOB Rule 3211, which requires, among others, audit partner disclosures in PCAOB Form AP, has led to a substantial increase in research examining individual audit partners and their influence within the U.S. audit environment. We conduct a systematic review of 52 academic studies that identify U.S. audit partners using PCAOB Form AP data. We find that, although this literature has advanced our understanding of the role of audit partners and the consequences of public disclosure, it remains at an early stage. Findings are sensitive to research design choices and difficult to synthesize into broad conclusions. Accordingly, the evidence presently supports context-dependent inferences. We discuss the implications of these patterns for interpreting existing findings and offer recommendations to guide future research using Form AP data. Data Availability: Data are available from the public sources cited in the text. JEL Classifications: M41; M42.

We examine whether managers’ prior exposure to corporate bankruptcy shapes corporate risk‐management policies. Using detailed executive employment histories and hand‐collected derivative disclosures for a large sample of US public firms, we find that firms led by bankruptcy‐experienced (BE) CEOs are more likely to use cash‐flow hedges and hedge more intensively. Consistent with the “hot stove” hypothesis, exposure to an extreme left‐tail event appears to heighten managers’ sensitivity to downside risk. Several findings support an experience‐based interpretation over managerial sorting or fixed traits: The relation is stronger when the bankruptcy is more recent, when the manager served as CEO of the failed firm, when the failure occurred during a recession, and when career consequences were more severe. Hedging operates as a flexible risk‐management margin; the effect is stronger when managers do not reduce leverage or build cash reserves, suggesting substitution with balance‐sheet conservatism, but complements reductions in investment. The relation weakens under stronger board monitoring, and boards respond to BE CEO appointments by increasing risk‐taking incentives. Above‐predicted hedging is generally associated with higher firm value, but these benefits are significantly weaker when undertaken by BE CEOs; the incremental hedging also attenuates after anti‐recharacterization laws strengthen hedging incentives economy‐wide. At the same time, experience‐driven hedging predicts lower future distress risk and fewer credit downgrades, indicating a trade‐off between downside‐risk reduction and value maximization. The results are robust to firm fixed effects, CEO turnover analyses, matched samples, and controls for managerial characteristics.

This study examines whether and how climate threats (droughts) affect the innovation activities of firms in food industries worldwide. We find that firms in countries with a less positive Palmer drought severity index (PDSI), that is, with more drought‐like conditions, file more drought‐related patents and that such patents receive more citations in the future. Such innovation activities are not found in industries unlikely to be affected by drought. The association between drought‐like conditions and innovation is stronger in countries with more human capital, better capital market development, and a national culture with a long‐term orientation. Finally, we provide suggestive evidence that corporate innovation activities can reduce the exposure of corporate profits to climate threats.

The circular economy (CE) is featuring more prominently in emerging regulations, codes of best practice, and corporate policies. Yet, accounting research offers limited insight into how circularity is currently conceptualized and communicated in corporate reports. Consequently, this paper contributes to emergent CE accounting debates by developing and applying a framework assessing the content, mode, and integration of CE disclosures. The framework is applied to a longitudinal thematic content analysis of sustainability reports issued by 31 multinationals independently identified as CE champions. Doing so reveals substantial variation in CE reporting practices ranging from the provision of policy‐focused and generic detail to more performative and substantive reporting. Along this continuum are four CE reporting strategies: substantive implementation, targeted implementation, policy‐focused disclosure, and curtailed application. These findings add to the limited prior work on how CE is reported to investors and other stakeholders. They offer empirical insight into how new sustainability concepts are translated into corporate reporting practice with implications for standard‐setters and policymakers. The proposed framework will be a useful tool for investors, non‐government organizations and other stakeholders interested in evaluating the reporting on CE. It can also be readily modified to deal with other emerging forms of sustainability‐related reporting.

This study investigates how firms manage earnings through accounting discretion when industry peers produce more comparable accounting information. Utilizing data from Chinese A‐share listed firms, we find that peer accounting comparability inhibits focal firms’ accruals‐based earnings management. We identify two possible mechanisms underlying this phenomenon. First, peer accounting comparability helps to establish generally accepted accounting practices that induce focal firms to align. Second, peer accounting comparability contributes to mitigating outsiders’ information asymmetry, thus improving external monitoring. Cross‐sectional analysis indicates that the effect of peer accounting comparability holds across varying levels of focal firms’ internal and external governance mechanisms. Furthermore, we find that manipulating accruals when peer accounting comparability is high causes lower cumulative abnormal returns during the earnings announcement window and a higher cost of equity. Finally, we show that when focal firms cannot manage earnings through accounting discretion because of high peer accounting comparability, they turn to real earnings management.

This study examines the relationship between retail investor attention and firms’ voluntary environmental, social, and governance (ESG) disclosure, drawing on a comprehensive dataset from investor interactive platforms (IIPs) in China. We document a positive association between retail investor attention and firms’ voluntary ESG disclosure, which holds across a wide range of robustness checks. Cross‐sectional evidence indicates that this association is stronger for firms with better ESG performance, larger size, stronger governance, and for those receiving more negatively toned ESG inquiries on the IIPs. The association is also more pronounced under external conditions such as policy initiatives and analyst coverage. Further analyses show that it is primarily linked to information‐seeking as opposed to gambling‐oriented attention, and to inquiries regarding financially material ESG issues. Firms issuing ESG reports during periods of heightened retail investor attention tend to experience favourable capital market outcomes. Overall, the evidence underscores the role of retail investors as a visible demand‐side force associated with voluntary ESG disclosure.

This paper examines the relationship between blue accounting and blue finance and its implications for sustainable ocean‐based development. Using a conceptual review of the United Nations Sustainable Blue Economy Finance Principles, major financial instruments, and selected cases, the paper shows that blue finance creates demand for standardized and comparable information, while credible blue accounting supports activity eligibility, environmental risk assessment, performance monitoring, and the prevention of bluewashing. It conceptualizes blue accounting as a connected architecture spanning corporate or entity‐level reporting, project‐ and financial‐instrument‐level accounting, and national or subnational ocean accounts. These levels serve distinct but complementary purposes across financial decision‐making, corporate management, public policy, and environmental governance. The analysis finds that existing accounting methods, including SEEA‐consistent ocean accounts, provide an important but incomplete foundation. Persistent difficulties in valuation, reporting boundaries, recognition, measurement, materiality, attribution, data availability, and institutional capacity limit their effectiveness. Addressing these limitations requires combining established approaches with marine‐specific definitions, ecological indicators, valuation methods, and stronger connectivity across accounting levels. Blue finance should therefore be understood as part of a broader institutional transition aligning accounting, governance, and capital allocation with ecosystem resilience.

Using 1,470 cash and stock‐for‐stock mergers and acquisitions from 2004–2020, we document that stock‐for‐stock bidders strategically manage the narrative content of earnings press releases in the year preceding the announcement to lower acquisition costs. Beyond inflating tone, we find that they also reshape tone dispersion, with positive language distributed more broadly across earnings press releases and negative language increasingly concentrated. Abnormal tone inflation leads to substantial short‐run gains ($22 million for the average bidder), with smaller but reinforcing effects from dispersion. These patterns are most pronounced in larger deals and weaker‐monitoring environments but reverse in the long run, as markets discount narrative manipulation.

Utilizing unique data on organizational structure from the prospectuses of Chinese listed firms, this study examines how the status of internal audit shapes corporate budget management. We find that internal audit functions reporting directly to the board (i.e., higher status) are associated with lower budget execution deviations but greater budgetary slack during the budget preparation stage, relative to those reporting to senior management (i.e., lower status). These relationships are more pronounced in firms with higher agency costs and elevated operational uncertainty. We further document that higher internal audit status intensifies the budget ratchet effect, resulting in strategic target achievement without substantial overperformance. Ultimately, while reducing budget execution deviations enhances operational efficiency, the induced budgetary slack also poses a threat to the firm's financial performance. Our findings highlight a critical trade‐off in the design of organizational structure regarding internal audit and offer nuanced implications for budget management.

This study develops a novel measure of sell‐side analyst financial modelling mistakes, based on whether an analyst's simultaneous forecasts of earnings, book value of equity, and dividends are internally consistent with the accounting clean surplus relation. I find that the discrepancy of an analyst's forecasts from clean surplus (a proxy for financial modelling mistakes) is positively associated with the analyst's contemporaneous forecast errors and price target errors. This is consistent with financial modelling playing an important role in analysts’ forecasting and valuation process. More experienced analysts, analysts who work for larger brokerage firms, and analysts who are less busy produce forecasts that are less discrepant from clean surplus. This is consistent with analysts learning to avoid modelling mistakes over time and making fewer mistakes when they have better access to resources and sufficient time to prepare a careful analysis. The market reaction to earnings forecast revisions is significantly weaker when the contemporaneous analyst forecasts are discrepant from clean surplus, consistent with the market viewing these forecasts as lower quality. In sum, the results reveal the importance of financial modelling to analyst information processing.

An extensive body of accounting research documents the difficulty of measuring the value of intangibles and the issues surrounding recording them in company financial statements. Early studies examined advertising and research and development (R&D) expenditures when companies began reporting them in their financials in 1972. A lot has changed in the years subsequent to the early studies: investments have shifted from tangible to intangible, more data are available, and statistical techniques have improved. This study replicates and extends the findings in Bublitz and Ettredge (1989) using data from 1984 to 2018, finding similar relationships between returns and advertising and R&D expenditures in the later time period. The paper also extends their study by investigating the relationship between intangible expenditures and future payoffs, finding mixed results.

In this paper, we empirically examine the effects of one specific characteristic that could facilitate earnings forecasting for sell‐side financial analysts: the stability (consistency) over time of industry peers. We develop an accounting‐based proxy for this, which we call industry peers’ accounting consistency (IPAC). First, we argue that a set of industry peers that is stable over time—with stability being linked to their accounting choices relative to the target firm—improves the accuracy of sell‐side analysts’ earnings forecasts, because previously developed heuristics for identifying industry peers and forecasting earnings of target firms against their peers can continue to be used. Second, we conjecture that higher peer stability over time decreases the dispersion of sell‐side analysts’ earnings forecasts because more obvious peer choices are available. Consistent with our expectations, we find that IPAC is significantly associated with higher accuracy and lower dispersion in analysts’ earnings forecasts.

SYNOPSIS We examine whether and how CEO neuroticism and its subtypes are associated with firms’ credit risk. We find that overall CEO neuroticism is significantly and positively associated with credit risk, as measured by bond yield spreads. The results suggest that firms led by more neurotic CEOs exhibit greater asset value volatility and higher financial leverage, both of which are associated with higher credit risk. These patterns may reflect the emotional instability associated with neurotic CEOs. Deconstructing neuroticism, we document opposing associations across subtypes. Anxiety, vulnerability, and depression are associated with lower credit risk, whereas impulsiveness and angry hostility are associated with higher credit risk. Moreover, the risk-reducing associations of the anxiety, vulnerability, and depression subtypes are more pronounced under adverse economic conditions. Our results remain consistent across several supplementary analyses designed to mitigate specific endogeneity concerns, as well as alternative model and variable specifications. Data Availability: The data are available upon request. JEL Classifications: G32; M12; G12.

SYNOPSIS The National Pipeline Advisory Group encouraged accounting firms to offer comprehensive benefits that promote work-life balance and support family well-being. Accordingly, we pursue this study to examine whether firms’ comprehensive benefits packages support families with non-heteronormative caregiving responsibilities. To highlight differences in heteronormative and non-heteronormative caregiving responsibilities, we analyze autoethnographic vignettes from an author’s lived experience as a single parent providing foster care. We collect data on the type and breadth of family-supportive benefits offered by top accounting firms. We find that firms offer a broad range of family-supportive benefits, including parental and caregiver leave, dependent care resources, and employee mental health supports. However, caregiver leave was often inferior to parental leave benefits, dependent care resources were not always designed for the spontaneity required of foster and elder care, and mental health resources may not be sufficient for the challenges of modern caregiving. Our recommendations address noted deficiencies. Data Availability: Data were collected from publicly available sources as named in the manuscript.

SYNOPSIS We examine whether having a Corporate-Interlocked Director (CID) on a nonprofit board is associated with the use of executive pay practices common in the corporate sector, despite nonprofits’ mission-driven objectives, multidimensional performance metrics, and distinct governance dynamics. We find that nonprofits with a CID are more likely to use incentive pay but not high salary, noncontingent bonus, or executive perks, suggesting that CIDs support pay-for-performance principles without fully importing corporate pay norms. Among nonprofits using incentive pay, 91 percent link pay to criteria beyond revenues or earnings, suggesting that nonprofits are not biased toward linking pay solely to financial metrics. Furthermore, the CID-pay practice association is prominent in charities and education nonprofits. Explanatory analyses also indicate some variation in these associations in the presence of other governance actors. In practice, nonprofits may benefit from CID expertise in designing executive pay systems that balance incentives with fairness and reasonableness. Data Availability: The data are not publicly available due to ethical, legal, or other concerns. JEL Classifications: G34; M12; L30.

SYNOPSIS Prior research documents widespread concern among accounting faculty about the publication process. In this third installment of a decade-long study of faculty perceptions (2015–2025), we examine whether those concerns have changed and explore the emerging role of generative AI in accounting research. Based on more than 1,100 responses, we find that perceptions remain highly negative and, in some areas, have worsened. Many faculty support stronger action by sponsoring organizations, including higher acceptance rates and broader recognition of journals in tenure and promotion decisions. At the same time, this study identifies a potential catalyst for change: the rapid adoption of generative AI. Nearly two-thirds of faculty already use these tools, another 17 percent plan to adopt them, and most believe their use will become unavoidable within five years. These findings point to persistent dissatisfaction with publishing norms and a technological shift that may reshape research production and evaluation.

SYNOPSIS AI systems are increasingly used to support consequential organizational decisions, heightening concerns about fairness, reliability, and accountability. Regulators have begun to respond through audit and disclosure mandates, yet credible assurance over AI systems remains underdeveloped and it is unclear who should provide it. This commentary argues that algorithmic assurance is a natural extension of the assurance function and that accounting professionals are well positioned to deliver it because they bring independence, evidence discipline, professional judgment, and structured reporting. Using New York City’s Local Law 144 as an illustrative case, this study analyzes 13 publicly available bias-audit reports. The analysis shows that audit concepts such as scope, criteria, evidence, and independence are already being applied to algorithms, largely outside the accounting profession, but with wide variation in rigor and transparency. The commentary identifies the core design problems behind this variation and discusses implications for audit firms, regulators, and standard setters. Data Availability: Data are available from the public sources cited in the text. JEL Classifications: M42; M48; O33.

SYNOPSIS This study examines how coverage by environmental, social, and governance (ESG) rating agencies influences executive pay structures. We find that when a firm begins to be rated by ESG agencies, its executive compensation becomes more sensitive to ESG performance and less sensitive to traditional financial performance. Our analysis identifies three key mechanisms driving this change: ESG raters (1) mitigate information asymmetries, (2) substitute for weak internal ESG governance, and (3) amplify external stakeholder pressure. The effect is stronger for firms in industries with poor ESG performance and for firms operating under heightened external scrutiny. Additional evidence shows that ESG rating coverage is positively associated with the adoption of explicit ESG-linked compensation provisions. Taken together, the results demonstrate that ESG rating coverage serves as a potent external governance mechanism that increases the importance of ESG outcomes in executive compensation. Data Availability: The data used in this study are available from the public sources identified in the article. JEL Classifications: G18; G38; K33; L21; M12; M41; M48.

SYNOPSIS Using interviews with 37 partners, we study how mid-tier public accounting firms define “who they are,” as expressed through their stakeholder relationships and strategic positioning in the field. We find that these firms prioritize cultivating close, lasting relationships with employees and clients. This is reflected in intentional practices of interpersonal mentoring; hands-on talent development; empowering leadership, entrepreneurialism, and autonomy; career flexibility; and tailored client service. Beyond their strong relationship-focused identity, partners describe collectivistic decision-making and coordination toward firm-wide goals. However, the “melting pot” of homegrown professionals and hires from other firms can create organizational identity disorientation, particularly as firms grow. Maintaining “who they are” amid structural changes (e.g., mergers, growth, and private equity investment) is an especially timely concern. We show how mid-tier firms blend relational and collectivistic practices to engage with internal and external stakeholders, and our findings can help these firms identify stakeholder-oriented strengths worth preserving versus adapting. JEL Classifications: L2; M14; M41; M42.

SYNOPSIS Accounting firms are navigating evolving audit environments driven by flexible work arrangements and increased digitalization, while at the same time, younger professionals bring different career expectations than previous generations, and the workforce is becoming more diverse. These shifts in the profession have disrupted the traditional socialization necessary to support early-career auditors. Drawing on socialization resources theory (SRT), this study explores the socialization resource gaps experienced by early-career auditors in contemporary work environments. Using survey and interview data, we identify gaps across relational/social and work-related resources. Results suggest that evolving work environments may create new barriers to resource access during socialization and that such barriers are not uniformly experienced among early-career auditors. We offer recommendations for firms to help support newcomer adjustment and retention and provide avenues for future research.

SYNOPSIS This paper describes how the International Accounting Standards Board (IASB) uses evidence from academic research when carrying out standard-setting activities. We provide four case studies to show when and how evidence is used in various stages of the IASB’s work. Calls for academics to demonstrate the practical impact of their work have been increasing. We describe how academics can improve the relevance of their work for standard-setters and how they and the IASB can increase their interactions. More relevant studies and greater interactions between academics and standard-setters should help to bridge the academia-practice gap in the standard-setting arena and assist academics to increase the impact of their research on practice. JEL Classifications: A20; I23; M10; M40; M41.

SYNOPSIS Generative artificial intelligence (GenAI) has become one of the latest technological tools adopted in auditing. As a result, new auditors are entering the profession with GenAI as part of their socialization environment. Using a contemporary articulation of the organizational socialization framework emphasizing Confidence, Connection, and Clarity, we examine the intersection of technology and socialization by exploring how early-career auditors’ use of GenAI shapes their socialization experiences. We find that GenAI reshapes the frequency and nature of team and peer interactions, supports independent learning, and strengthens auditors’ confidence/self-efficacy. As a real-time learning resource, GenAI provides immediate access to technical knowledge and enhances preparedness for client interactions, but it may not contribute to true skill acquisition. Additionally, GenAI introduces ambiguities that challenge role clarity, particularly regarding appropriate use, validation of outputs, and job boundaries, highlighting the need for more clearly defined firm expectations regarding AI use and professional responsibilities.

SYNOPSIS Using hand-collected data from statements of shareholders’ equity, we document significant diversity in practice across firms in how they charge stock repurchase costs to shareholders’ equity accounts. Some firms charge repurchase costs entirely to the treasury stock, paid-in capital, or retained earnings accounts, whereas others split repurchase costs in various combinations across multiple accounts. This raises two concerns. First, reported shareholders’ equity accounts may lack comparability across firms because standards permit economically similar repurchases to be reported differently. Second, reported retained earnings and paid-in capital may not faithfully represent a firm’s undistributed income and amounts received from shareholders for issuing shares of stock, respectively, but rather arbitrary repurchase accounting choices. We propose that standard setters rethink financial reporting standards for stock repurchases by either simplifying shareholders’ equity presentation or reducing discretion in accounting for repurchases. Data Availability: All data are available from the public sources cited in the text. JEL Classification: M41.

SYNOPSIS Accounting information needs verification because people cheat and err—enduring traits that AI magnifies. Scams and bank fraud alone exceed $570 billion globally. AI also multiplies confident, subtly flawed work inside organizations. Yet much commentary predicts that AI will displace CPAs by automating routine and judgment-based work. I argue the opposite: those forecasts count today’s tasks but miss new, AI-enabled verification work once too costly to perform. Drawing on the Jevons Paradox and the spreadsheet’s failed threat to accountants, I develop a verification-based theory for assurance, advisory and forensics, tax, and managerial accounting. U.S. employment of accountants and auditors rose nearly 75 percent from 1980 to 2025, outpacing the workforce with a widening wage premium, even as bookkeeping jobs fell by one-third. I identify conditions under which the theory could fail and propose four pillars of CPA preparation: accounting fundamentals, AI fluency, project management, and interpersonal communication and judgment. Data Availability: All public data cited in this perspective article are available from the referenced sources. The informal professional observations described in the article were not collected under a research protocol and are not available as research data. JEL Classifications: M42; M41; M40; O33; J23; K42; I23.

Our study examines how two aspects of employees’ workplace environment, the effort they expend and the recognition they receive for doing so, influence income tax compliance intentions. We predict and find that when high workplace effort is met (not met) with high recognition from supervisors and customers, employees are significantly more (less) compliant with the cash income derived from their workplace. Given the growing prominence of narcissism and its intuitive links to both workplace dynamics and unethical behavior, we also explore the implications of antagonistic narcissism and agentic narcissism in this setting. Our results show that reactions to effort-recognition dynamics differ across narcissism dimensions, providing new insights into the intersection of workplace experiences, narcissism, and individual tax compliance. Data Availability: Data available upon request from the authors. JEL Classifications: G4; H20; H24; H26.

We investigate how the ability to manipulate statistics affects advisors’ willingness to provide self-serving recommendations to advisees. We build on theories in deception and persuasion stating that people have preferences to both be honest and appear honest, which can sometimes conflict with their financial self-interest. We present several findings using an abstract experiment. First, when given the opportunity, advisors actively manipulate statistics to support recommendations that benefit themselves. Second, more favorable statistics are associated with more self-serving recommendations (i.e., advisors rely on favorable statistics to justify their recommendations), and this association holds regardless of whether or not the statistics are shown to advisees. Furthermore, we find that statistics manipulation is associated with advisors’ tendency to deceive themselves, which may facilitate their ability to internally rationalize providing a self-serving recommendation. Overall, the findings from our study have theoretical and practical implications for various behavioral accounting contexts. Data Availability: The data used in this study are available upon request. JEL Classifications: D8; M4.

This study examines how academic managers operating under managerialist control translate performance measurement systems (PMSs) into local gaming practices within business schools. These systems, implemented under neoliberal and managerialist reforms, shape institutional governance by prioritizing research outputs, student satisfaction, and financial sustainability. Employing a managerialist perspective, this UK‐based qualitative study investigates gaming practices in a sample of research and teaching‐focused university business schools. It draws on semi‐structured interviews with academic managers involved in such practices and with non‐managerial academics who observed and experienced these managerial practices. The findings relevant to university business schools internationally reveal that managers strategically manipulate PMS frameworks through ambiguous evaluation criteria, selective contract allocations, and targeted recruitment practices to maximize institutional performance metrics. Additionally, teaching and research standards are increasingly shaped by consumer‐driven metrics, leading to grade inflation and a transactional student–teacher dynamic. By shifting the analytical focus from individual academics to institutional decision‐makers, the study reveals the unintended consequences of PMS‐driven business school governance and calls for higher education policy reforms that enhance transparency and mitigate distortive performance incentives.

The study examines how hard and soft power influence the organizational effectiveness of State corporations (SCs) in Kenya, a public‐sector context characterized by complex political dynamics and competing interests. Using a mixed‐methods approach, the study surveyed 366 employees across 33 SCs and interviewed eight Chief Executive Officers (CEOs). The theoretical framework drew on French and Bertram's bases of social power and the Competing Values Framework. Quantitative analysis using SmartPLS showed that social power significantly and positively influenced organizational effectiveness. Hard power (legitimate, coercive, and reward bases) had a significantly larger effect ( β = 0.540), whereas soft power (referent and expert bases) had a smaller, but significant effect ( β = 0.149). Qualitative findings indicate that SC leaders frequently use hard power tactics, including coercion and rewards, to ensure compliance and meet political expectations, reflecting the influence of the political landscape. Soft power, based on influence and expertise, is important for navigating organizational complexities and securing stakeholder support, although entrenched political interests may constrain its effectiveness.

Digital technologies influence social and organizational structures, materializing visions of desirable futures that both authorize and constrain how societies and organizations are organized, and how control is exercised. Drawing on Science and Technology Studies (STS), this paper examines how sociotechnical imaginaries of “modern and integrated healthcare” are articulated in national policy, materialized in Electronic Health Record (EHR) systems, and enacted within municipal management control. We investigate how these imaginaries become embedded within the evaluative grammar of new public management (NPM), shaping which forms of control appear visible, comparable, and legitimate while rendering others peripheral. The study employs an interpretive single‐case design of a regional public EHR pilot in Central Norway, based on an analysis of policy documents, observations, and interviews. Empirically, we explore how management control is sustained under conditions of partial vertical fit and the conditions for comparability in decentralized, capacity‐constrained settings. We show how technological imaginaries interact with resource constraints, requiring ongoing managerial mediation and legitimation. The study extends inscription‐based accounts of control by showing how sociotechnical imaginaries operate as upstream legitimizing frameworks that define which forms of control become legitimate and visible. It further describes how control depends on ongoing managerial mediation and legitimation when technical fit is partial. Together, these insights illuminate how digital infrastructures embed normative visions of control, making certain forms of control thinkable and actionable.

Funders and regulators are challenging public benefit entities (PBEs), including charities, to improve their reporting about the difference they make for accountability and decision‐making purposes. Yet, PBEs contend that this non‐financial performance reporting is challenging to scope, measure, and report. Although mandating the reporting is seen as a solution, little is known about how such mandates are implemented in practice. We focus on the tangible elements, artifacts, and technologies (materiality) that standard‐setters and regulators use to shape the potential and effects of regulatory changes. Drawing on institutional work (IW) theory, this study examines how materiality shapes IW in the implementation of mandatory performance reporting by accounting standard‐setters and charity regulators in New Zealand, the only jurisdiction that introduced mandatory performance reporting. On the basis of extensive documentary analysis and in‐depth interviews, our findings reveal that implementation is achieved through situated, evolving material arrangements that make the regulatory changes both legitimate to and implementable for charities. Materiality, manifest through physical places and spaces as well as material artifacts, and later through digital platforms and technologies, plays a central role in shaping IW. These materials act both as scaffolds, providing situated support for standard‐setters and regulators to educate, engage, and sustain performance reporting practices, and as complicators, introducing challenges and constraints that reshape how such work unfolds over time.

This research examines how sensemaking and sensegiving processes shape the ways in which the Sustainable Development Goals (SDGs) become meaningful and actionable in local governments. Drawing on a multiple case study of three Italian cities, it explores how politicians and managers engage with the SDGs. That engagement runs through four interconnected processes: interpretive anchoring, the reconfiguration of organizational identity, communicative practices, and the organizational routines of planning, coordination, and accountability. Rather than treating SDG‐related planning documents, reporting tools and formal administrative instruments as textual artifacts, the analysis foregrounds the interpretive processes through which political and managerial actors construct, communicate, and enact sustainability meanings in everyday administrative practice. The findings contribute to sensemaking scholarship in public sector and sustainability research on two fronts. They illuminate the interpretive dynamics through which global sustainability agendas are translated into local organizational contexts, and they identify the processes by which sustainability‐oriented forms of public governance are gradually stabilized.

Public officials and elected politicians are held accountable by various audiences, beyond generally recognized and authorized stakeholders, such as courts and auditors. However, previous studies on felt accountability—that is, individuals’ perception that their actions will be evaluated by salient audiences who may reward or sanction them—do not yet focus on such multiplicity of audiences in digitally mediated public accountability settings. This study investigates how anticipated digital scrutiny shapes individuals’ justificatory orientation, particularly when deliberating on controversial policy debates. We draw on a mixed‐methods study of Brazilian local legislators and find that digital traces, enabled by live‐streaming and recording technologies, are associated with a stronger orientation toward interest‐group‐based justifications, particularly when policy issues are morally and epistemically contested. We argue that heightened digital visibility is embedded in architectures that enable interactivity, create persistent traces, and facilitate the circulation and public evaluation of political speech under polarized and contested conditions. As a result, legislators’ justificatory practices become more attuned to anticipated reactions from salient audiences whose evaluative power can be strengthened by digital traces, even when these audiences lack formal sanctioning authority. We conclude by highlighting theoretical and managerial implications.

In this study, we examine the role of interorganizational network ties (being board interlocks and auditor ties in particular) in explaining external financial transparency certification among Belgian nonprofit organizations (NPOs). As a voluntary quality signal, external certification is particularly relevant in the nonprofit context, where donors face information asymmetry. Previous studies have shown that certification positively influences donations, yet the antecedents of certification remain underexplored, especially those related to social network ties. We rely on a sample of 5058 NPO‐year observations and find that NPOs with board interlocks or sharing audit partners with certified NPOs are more likely to be certified themselves. These findings are relevant for regulators, nonprofit managers, and other stakeholders because they shed light on how certification practices spread within the nonprofit sector.

We examine the motivations and outcomes of firms’ strategic actions in response to external professional attention. Using stock index reconstitutions in China as sudden and exogenous shocks, we find that firms receiving more attention from analysts and institutional investors are more likely to disclose environmental policies. China provides a particularly useful setting because environmental disclosures by listed firms are highly standardized, allowing us to compare disclosure responses across firms. These disclosures are associated with short-term stock price gains, higher environmental ratings, and more positive media coverage. However, they do not result in improved environmental performance. Our findings reveal that the primary motivation is short-term enhancement of the corporate environmental image, with limited effects on driving meaningful environmental improvements.

Purpose This study investigates the effect of real-time disclosed regulatory comment letters on corporate stock liquidity and explores the underlying driving factors, using a unique sample from the Chinese stock market. Leveraging the timely nature of comment letter issuance and the subsequent reply mechanism in China, the paper aims to unambiguously identify the market consequences of comment letters and the associated mechanisms. Specifically, we focus on the role of different investor groups' trading behaviors, particularly retail net-sells and investor sentiment, in mediating the liquidity changes. Ultimately, this research provides new insights into the market monitoring effect of comment letters and regulatory enforcement in emerging markets. Design/methodology/approach We manually collected a sample of comment letters and their real-time replies issued by the Shenzhen Stock Exchange (SZSE) from 2014 to 2018. We employ event study methodology and Difference-in-Differences (DiD) models to analyze the changes in inquired firms' stock liquidity, measured by the Quoted Spread (QS) and Effective Spread (ES), following the comment letter disclosure. We proxy retail investor trading behavior using net sell volumes of small transactions and examine the driving role of retail net-sells and negative retail sentiment in the observed liquidity decline. This design leverages the unique institutional setting of real-time disclosure in the Chinese market. Findings The findings demonstrate that the stock liquidity of inquired firms significantly declines immediately after the comment letter disclosure. However, this decline does not significantly recover after the firms issue their subsequent replies. The short-term deterioration in liquidity is mainly driven by intense retail net-selling activities and heightened negative retail sentiment. Furthermore, the liquidity exhibits only a partial recovery over a longer period, extending up to 60 days post-disclosure. Finally, the negative effect of comment letters on stock liquidity is more pronounced for firms characterized by higher information uncertainty and greater corporate governance deficiencies. Originality/value This study uses the real-time disclosure mechanism of comment letters in the Chinese market to examine their impact on the trading behavior of different investor groups, particularly retail investors, thus mitigating concerns about insider trading. It confirms a significant regulatory effect of comment letters as a non-punitive regulatory tool in the capital market, filling a gap in the literature regarding their efficacy. By focusing on the unique emerging market context of China, this research enriches the global understanding of comment letters' impact and offers important practical implications for improving regulatory instruments worldwide.

Purpose Drawing on upper echelons and imprinting theories, we examine whether chief executive officers’ (CEOs') political organizational experience is associated with firms' subsequent total factor productivity (TFP). Design/methodology/approach We conduct panel data analyses to examine the relationship between CEOs' military and political backgrounds and subsequent firm-level TFP. Using a sample of Chinese listed firms from 2004 to 2021, we distinguish Communist Party of China (CPC) or Communist Youth League of China (CYLC) committee experience from military experience and CPC school training. Findings CEOs with substantive CPC/CYLC committee experience are associated with higher subsequent TFP in SOEs, whereas military experience and CPC school training are not significantly associated with TFP. The association is also evident among firms with internal CPC organizations across ownership types. Reductions in agency costs and inefficient investment are potential mechanisms through which CPC/CYLC committee experience is associated with higher productivity in state-owned enterprises (SOEs). These findings underscore the importance of distinguishing substantive CPC/CYLC organizational experience from broader forms of political or military exposure, highlighting how political embeddedness within institutions and governance structures is associated with executive behavior and firm productivity. Originality/value This study contributes to the literature by showing the importance of distinguishing substantive CPC/CYLC organizational experience from broader forms of political or military exposure. It highlights how political embeddedness within institutions and governance structures is associated with executive behavior and firm productivity.

Purpose This study analyzes the association between capital structure and the environmental, social, and governance (ESG) performance among companies in emerging markets. Design/methodology/approach Using data from the London Stock Exchange Group covering 24 emerging markets and 2,665 firms from 2016 to 2023 (12,738 company-year observations), we applied panel data regression analyses with year, industry, and country fixed effects. Robustness tests used alternative samples separately accounting for the institutional environment and the E, S, and G. Findings The results show a predominant reliance on equity financing and a high concentration of onerous short-term debt associated with higher ESG performance, suggesting expanded managerial discretion, which allows managers to prioritize financial visibility over sustainability commitments. By contrast, onerous debt can discipline and restrict discretionary spending and ESG-related activities under specific conditions, mainly in countries with principled legal systems and higher levels of transparency. Practical implications The findings offer guidance to lenders, financiers, managers, and policymakers. Lenders and financiers can align debt maturity with investment horizons of ESG projects, incorporate contractual clauses to monitor key indicators, and mandate reporting. Managers should align their financial flexibility decisions with their sustainability goals. Policymakers can also link ESG disclosure requirements to public credit or tax incentives to reduce information asymmetry and encourage responsible corporate conduct. Originality/value This study advances the literature on Agency Theory by showing that financing decisions must balance investor and creditor ESG expectations with firms’ strategic financial goals and managerial discretion.

The Financial Accounting Standards Board (FASB) staff encourages academics to research hedge accounting and share their findings with the staff via the Academic Paper Submission Portal. The staff is interested in both published and in-process papers. Relevant findings will be presented to the Board or used in staff research. To facilitate research on hedge accounting, this article summarizes U.S. GAAP accounting guidance on hedging, provides an overview of possible paths forward in the current hedge accounting research agenda project, and lists several unexplored research directions that would provide helpful insight to the staff. Finally, links to helpful resources are included as an appendix. JEL Classifications: M41.

I examine how firms respond to SEC and FASB requirements to disclose related information about future revenue: order backlog (OB) and remaining performance obligations (RPO). I find that OB and RPO partially overlap but are not redundant disclosures; they have both common and distinct determinants and provide incrementally useful information about future revenues. Leveraging novel aspects of the setting, including staggered regulatory changes, I show that firms use discretion in the disclosure requirements to reduce the scope of their disclosures. Approximately 45 percent of firms elect a practical expedient that permits nondisclosure of eligible RPO information, and some firms change how they measure OB to align OB with RPO. Overall, my results indicate that the OB and RPO requirements expand the availability of useful information while also providing firms with discretion to respond to the perceived costs of related disclosure requirements. Data Availability: Data are available from sources described in the paper. JEL Classifications: M40; M41.

As stakeholder pressure to integrate sustainability into core business activities increases, the role of the finance function in embedding ESG into decision-making processes becomes increasingly important yet remains underdeveloped in practice. We conceptualize ESG embeddedness as the extent to which ESG performance measures are incorporated into the finance function’s core tasks of generating and communicating decision-relevant information, distinguishing between embeddedness in internal management accounting processes and in external ESG disclosures. We examine whether two organizational design choices aimed at more centrally integrating ESG into firms’ strategies—ESG contracting for the CFO and the establishment of a dedicated ESG department—are associated with ESG embeddedness in these domains. Using survey data from 242 CFOs from Austrian and Swiss firms, archival data, and manually coded ESG reports, we find that the joint implementation of these design choices is associated with higher ESG embeddedness in management accounting processes and higher ESG disclosure quality.

This article provides an overview of two fundamental shifts in the modern workplace: the rise of hybrid and remote work, and the growing use of artificial intelligence (AI). I describe studies that examine hybrid or remote work and worker behavior and highlight that management accounting scholars are uniquely placed to examine the effects of management controls in this context. Two papers in this special interest forum do just that, while the third on the topic of hybrid/remote work examines how highlighting job characteristics affects job applications. Although AI is not represented in this forum, I highlight it as a fruitful area for management accounting research. Lastly, I emphasize that management accounting scholars should continue to advance more traditional research areas of labor-oriented management controls by leveraging new opportunities (e.g., regulation changes). The fourth paper in this forum is illustrative of such research. JEL Classifications: J33; J81; M12; M41; M50; M52; M54; M55; O33.

I examine undergraduate student acceptance of the Bloomberg Terminal in two investment courses at an Australian university ( N = 53). Drawing on Self‐Determination Theory and technology acceptance models, I validate the measures through confirmatory factor analysis and test six hypotheses using path analysis with bootstrapped standard errors. Students reported high perceived usefulness and behavioural intention despite moderate perceived ease of use, a pattern of utility and complexity decoupling. Autonomy was associated with cognitive engagement and usefulness, whereas engagement alone was not. Usefulness related to intention directly and through professional development perception. The findings inform curriculum design and professional technology investment in accounting and finance education.

Finance has long been part of Australian and New Zealand tertiary education, although its long‐term presence has been offset by significant changes within the business education landscape. Employing an online content analysis approach, we provide an in‐depth analysis of the various forms of undergraduate finance education currently delivered by Antipodean public universities, including the finance units offered and degrees encompassing them, the discipline areas providing this education and associated value propositions. Overall, our analysis reveals the continued ubiquity of finance‐related undergraduate education but also identifies potential limitations regarding the future‐readiness of graduates and mitigating reputational challenges faced by the sector.

We explore how corporates working towards valid Science‐based Targets engage with their suppliers to collect Scope 3 emissions data. This is important to enable such corporates to reduce greenhouse gas emissions and achieve net‐zero by 2050. Utilising agency theory, we analyse 1402 responses from the 2021 CDP climate change survey. Our findings show that corporates most commonly adopt strategies that increase information symmetry, such as screening and monitoring, as these directly address adverse selection and moral hazard. Incentive alignment and collaborative engagement require greater resources and commitment and are used less often. Overall, this study enhances understanding of principal‐agent dynamics in sustainable supply chains and extends agency theory in this context by emphasising information symmetry and goal alignment to reduce environmental harm.

Auditing standards and academic literature highlight the importance of effective communication between auditors and those charged with governance. However, empirical evidence on its determinants and consequences remains limited. To address this gap, we use data from Korea, where auditor–audit committee communication is publicly disclosed, and provide new evidence on both the determinants of such communication and its association with audit effort. We find that communication frequency is positively related to client risk characteristics and governance strength, and this association is asymmetric. We further document that greater communication is associated with higher audit fees and increased audit hours. This association is more pronounced for face‐to‐face meetings, meetings conducted during the fiscal year, and engagements involving Big 4 and industry‐specialist auditors. Overall, our findings provide insights for regulators developing guidance on audit communication and contribute to the growing literature on auditor–audit committee coordination.

This study examines the impact of Australia's multinational anti‐avoidance legislation and diverted profits tax on restricting corporate tax avoidance (CTA) among foreign significant global entities (SGEs) operating in Australia, in light of the Price Waterhouse Coopers (PwC) tax scandal. Of particular concern is the persistence of the impact of these legislative strategies to significantly restrict CTA behaviour of foreign SGEs in Australia. Our findings suggest that Australia's unilateral strategies to restrict CTA appear to be relatively short‐lived. The findings indicate that such legislative tax policies function more as restrictions rather than as deterrents, potentially serving only to increase the costs associated with CTA. Consequently, the incentives associated with CTA in Australia are likely to remain in place.

This paper investigates how corporate social responsibility (CSR) ratings affect stock liquidity, emphasizing the role of market attention. Using Chinese A‐share listed firms' (2010–2020) data, we find that higher CSR ratings can improve stock liquidity. This result remains robust after addressing potential endogeneity issues including PSM, instrumental variable regression, DiD model and alternative measures of CSR and stock liquidity. Attention from capital‐market professionals, the media and the public helps explain this relationship. The incentive effect is more pronounced in firms with lower leverage, higher ROA, lower book‐to‐market ratios, and higher Tobin's Q, especially in East China. Positive investor sentiment further strengthens this link. CSR helps reduce information asymmetry and builds reputation capital, offering fresh insights into liquidity determinants through the lens of market attention.

Corporate sustainable growth is intrinsically linked to governmental support. From a green development perspective, we investigate how local government environmental governance influences trade credit financing among heavily polluting firms. Our findings reveal a significant positive relationship, which is primarily related to improvements in environmental information disclosure and increased investment in green transition. Cross‐sectional analyses further show that this positive relationship is more pronounced among firms with lower information transparency and restricted financing access. Moreover, we find that greater trade credit financing is associated with lower managerial myopia and higher firm market value. These insights carry important implications for optimising financing structures in heavily polluting sectors and advancing the modernization of local environmental governance systems.

This study examines how investor sentiment affects fundraising in reward‐based crowdfunding markets. Using Spotify‐based music sentiment as a proxy for investor sentiment, we show that positive sentiment increases both pledged amounts and the number of backers. These effects are strongest early in the campaign and are distinct from the influence of prior funding activity and peer participation. We further find that positive sentiment is associated with better eventual fundraising outcomes, with early‐stage funding performance helping to account for this relation. Our findings identify investor sentiment as an important driver of individual backing decisions and aggregate crowdfunding performance.

This special issue highlights the continuing vitality, relevance, and diversity of qualitative accounting research within Accounting and Finance. Building on the foundation established by the journal's 2019 special issue on qualitative accounting research, this special issue explores how qualitative methods can illuminate accounting as it is enacted, interpreted, and experienced within emerging organisational, technological, and societal contexts. The papers examine a diverse range of topics, including digital transformation, artificial intelligence, blockchain, accountability, governance, public interest, organisational decision‐making, professional practice, and accounting education. Collectively, they demonstrate the capacity of qualitative research to generate rich insights into the social, organisational, and institutional processes through which accounting shapes, and is shaped by, contemporary challenges and opportunities. The special issue reinforces Accounting & Finance 's commitment to methodological diversity and highlights the important role of qualitative research in advancing understanding of accounting in an increasingly complex and evolving world.

Several scholars have argued that intuition plays a significant role in auditor judgement and decision‐making (JDM); however, there is limited scientific insight into whether, to what extent and how intuition is perceived in practice. This mixed‐methods field study explores the perceived use of intuition in auditing. Following a survey of 290 auditors and 18 interviews, we found that although auditors often perceived using their intuition, some associated this with risks and challenges. Moreover, the auditors' perceived use of intuition was related to various individual characteristics, such as job level, and organizational characteristics, including bureaucratic organizational culture and firm size. Importantly, the auditors frequently reported integrating intuition into their JDM, emphasizing the need to acknowledge intuition as a non‐negligible element of JDM in both audit practice and research. Based on these insights, we propose recommendations for further study to understand and integrate intuition better within the auditing profession.

In recent years, the emergence and proliferation of startups have contributed to a wide range of technological, economic, and social implications. Startups are organizations born in contexts of uncertainty, and they generally operate under resource constraints and in the absence of business, management, marketing, and financial knowledge. Accordingly, management accounting scholars have focused on understanding the management control (MC) phenomenon in startups. Over the past two decades, literature on MC has employed diverse approaches to investigate MC adoption. Although a few attempts have been made to integrate this literature, we still do not have a clear understanding of the phenomenon. To provide a more consolidated perspective, we conducted a systematic literature review (SLR) of the MC phenomenon in startups. Drawing on 37 articles, we structured our analysis around two complementary approaches, namely, bibliometric analysis to map the development and main trends of the literature and, more importantly, qualitative content analysis to integrate and categorize the MC phenomenon in startups according to its design, attributes of metric content and formality, intentions of use and formalization, and its antecedents and consequences. Therefore, the main contribution of this study is an integrated categorization of MC in startups that connects control design, attributes and intentions with their antecedents and consequences, thereby providing a more structured understanding of this fragmented literature. Building on this integrated perspective, we identify avenues for future research in currently underexplored areas.

This study examines how professionalisation unfolds in family firms by investigating “whether” and “how” the management accounting language game sustains dialogical interactions between family firm and professional communities by activating reciprocal situated learning processes. Grounded in Pragmatic Constructivism, the family firm and professional views of doing business are conceptualised as two distinct topoi that guide how both communities interpret business facts and define courses of action. We argue that management accounting practices function as a language game that structures communication between these communities, enabling them to engage in dialogical interactions and reciprocal situated learning. An interventionist research conducted in a family-owned pharmaceutical firm reveals that empathy and openness to learning, fostering mutual understanding between family firm and professional communities, are crucial for identifying new business possibilities. The findings suggest that management accounting practices can act as a catalyst for communication and learning during the professionalisation journey of family firms. In particular, the paper introduces the concept of the learning bridge topos, which enables the ongoing of professionalisation. By using management accounting practices as a language game, both communities engage in open dialogue that helps bridge their different values and perspectives without compromising their core identities. The study contributes to the literature on family firm professionalisation by showing that management accounting practices act as communicative mechanisms that sustain learning and collaboration in complex organisational contexts. Practical implications refer to the importance of sustained empathic engagement between different communities to enable effective collaboration and organisational growth.

Purpose This study aims to investigate the effects of the latest delisting system reform, implemented in 2020 in China, on avoidance behaviors and audit disclosures among firms facing delisting risk. Design/methodology/approach The study uses the difference-in-differences model to empirically test panel data of China’s A-share-listed companies from 2018 to 2022, comparing observations before and after the reform. As a governance mechanism, changes in audit opinions are also analyzed. Findings The findings indicate that during the post-reform period analyzed, accrual-based earnings management increased while real earnings management remained stable. In addition, the likelihood of companies facing delisting risk receiving nonstandard audit opinions increased significantly, although there was no notable change in key audit matter disclosures. The results suggest that among the changes in the reform, although the cross-application of audit opinions and profit indicators is improving risk disclosure, further regulatory refinements are necessary to curtail delisting avoidance behavior. Originality/value The study provides systematic evidence on the reform’s aggregate impact, investigating its policy effects and focusing on common problems that require urgent solutions. The findings offer generalizable conclusions with significant implications for regulators assessing the policy’s overall effectiveness and for investors evaluating market-wide financial reporting quality to help enhance the capital market system.

Purpose This study aims to investigate the association between positive abnormal audit fees (PAAFs) and financial reporting quality (FRQ). Design/methodology/approach This study uses a multivariate regression analysis to examine a sample consisting of 2,200 bank-year observations from the United States (US) over the 2010–2020 period. Consistent with prior literature, PAAFs are derived using an audit fee estimation model and FRQ is derived using a loan loss provision estimation model. Findings This study provides strong evidence that PAAFs affect FRQ. Findings show an inverted U-shaped association. For lower levels of PAAFs, additional audit fees increase FRQ. By contrast, for higher levels of PAAFs, additional audit fees decrease FRQ. Research limitations/implications The focus on US banks may constrain the generalizability of findings. For this reason, further research exploring other contexts beyond the US setting may be particularly beneficial. Practical implications This study is of interest for regulators, auditors, and investors who are particularly concerned with FRQ determinants. Findings reveal that audit fees are key antecedents of FRQ and, overall, suggest the need for better monitoring and greater caution when interpreting banks’ financial reporting. Originality/value The significance of this study lies in its aim to enhance the understanding about the effects of PAAFs on FRQ by providing a plausible explanation for previous mixed results in the field, as well as novel insights for the banking industry. For banks with lower (higher) PAAFs, additional audit fees are beneficial (detrimental) as the audit effort effect (economic bond effect) prevails over the economic bond effect (audit effort effect).

Purpose This study aims to investigate how tax haven complexity and tax fraud risk jointly affect audit and auditor-provided tax service (APTS) fees. Design/methodology/approach Using a sample of US publicly listed firms from 2003 to 2022, the authors construct text-based measures of active tax haven engagement from 10-K disclosures and proxy for tax fraud risk using established tax shelter likelihood scores. The authors estimate audit and APTS fee models that jointly incorporate tax complexity, tax fraud risk and their interaction effects. Findings The authors find that tax haven complexity and tax fraud risk each have positive incremental effects on audit and APTS fees. Importantly, auditors do not price these risks additively. Instead, they charge additional fees when tax haven engagement coincides with elevated fraud risk. This interaction effect is robust across alternative tax haven measures. Additional analyses reveal asymmetric fee adjustments, with increases in tax haven activity raising fees but subsequent reductions failing to reverse them. When auditors expand their role to include tax services, tax haven engagement is associated with a further shift in the fee mix toward tax-related services. Originality/value The authors provide new evidence on how auditors jointly assess tax complexity and fraud risk when pricing audit and tax services. By distinguishing legitimate tax planning complexity from fraud-related risk, this study offers a more nuanced understanding of audit pricing behavior.

Purpose While prior research has focused on the outcomes of transnationalisation, how standard setters strategically design implementation processes through domestic standard-setting activities in the face of institutional constraints has received less attention. This study aims to investigate Japan’s revenue recognition reform as a case of how global accounting standards are locally negotiated, adapted and institutionalised over time through interactions with national interests, traditions and regulatory politics. Design/methodology/approach The authors conduct a qualitative document analysis of the Accounting Standards Board of Japan (ASBJ) records and 152 public comment letters, focusing on two core policy themes: acceptance of IFRS 15 requirements and inclusion of optional treatments to address domestic implementation issues. Stakeholder positions and rhetorical strategies are examined over time. Findings The ASBJ strategically delayed its adoption timeline until the IASB/FASB project matured, allowing domestic discourse to develop in parallel. The prolonged process mitigated resistance, particularly among traditionalist preparers, and habituated them to conceptual changes. Furthermore, the ASBJ incorporated flexibility through optional treatments that reflected stakeholder concerns, despite adopting IFRS 15 almost verbatim. This layered approach was adopted to preserve elements of the prior system and facilitate smoother implementation. Originality/value Empirically, this case offers a rich process-oriented account of how global standards are domesticated through local negotiations. Moreover, it makes a theoretical contribution to the extant literature on institutional change by way of providing a detailed case of gradual transformation through layering.

This study examines how expanded analyst ownership disclosures affect nonprofessional investors’ confidence in analyst recommendations and on their subsequent capital allocation decisions. In an experimental setting we manipulate information regarding the magnitude and duration of the analyst’s ownership position in a recommended stock. We find that investor confidence in analyst recommendations is significantly lower when analysts provide expanded disclosures, indicating that additional details heighten investor sensitivity to potential conflicts of interest in analysts’ recommendations. Consistent with attribution theory’s discounting principle, nonprofessional investors’ confidence is lowest when analysts disclose a large, short-term ownership position. We also document that investor confidence mediates the relation between analyst ownership disclosures and investors’ capital allocation decisions. Collectively, our findings provide evidence that expanded ownership disclosures influence both investor perceptions and behavior, offering support for regulatory initiatives aimed at enhancing analyst ownership transparency.

Purpose The impact of supply chain digitization on corporate tax avoidance is a critical yet under-explored issue in tax governance within the digital economy. Against this backdrop, this paper aims to conduct an in-depth analysis of the underlying mechanisms and boundary conditions governing the relationship between the two. Design/methodology/approach This paper uses data from Chinese A-share listed companies (2011–2022) and uses a two-way fixed-effects model to test for direct effects, as well as conducting robustness tests, mediation tests, moderation tests and heterogeneity tests. Findings Supply chain digitalization significantly inhibits corporate tax avoidance, and the alleviation of financing constraints exerts a positive mediating effect in this relationship. Public scrutiny reinforces this curbing effect, while management myopia weakens it. Furthermore, this effect exhibits significant heterogeneity across different firms. In terms of economic consequences, the curbing effect of supply chain digitization on tax avoidance further reduces corporates’ risk-taking and enhances their reputation. Originality/value To the best of the authors’ knowledge, this paper provides the first empirical evidence that supply chain digitalization curbs corporate tax avoidance. By examining moderating effects and heterogeneous roles, and by linking the reduction in corporate tax avoidance to subsequent risk-taking and reputational outcomes, this paper further extends the boundaries of the literature in relevant fields. These findings offer several policy implications.

Purpose This study aims to examine whether CEOs with prior military service engage in greater accrual-based income smoothing than their nonmilitary counterparts, and whether such smoothing enhances or diminishes the informativeness of current earnings and stock prices in predicting future firm performance. Design/methodology/approach Using a sample of 34,357 US firm-year observations spanning 1993–2022, the authors identify military CEO status through multiple biographical sources including BoardEx, Capital IQ and Marquis Who’s Who, and measure income smoothing as a composite factor score derived from three established proxies. The results are robust across multiple identification strategies addressing endogeneity concerns, including firm fixed effects, propensity score matching, entropy balancing and instrumental variable analyses. Findings Firms led by ex-military CEOs engage in significantly greater income smoothing. Importantly, this smoothing enhances the informativeness of both current earnings and current stock prices with respect to future performance, suggesting that military-trained CEOs use smoothing strategically as a signaling mechanism rather than opportunistically. Originality/value This study identifies military experience as a novel, psychologically grounded determinant of income smoothing, demonstrating that formative imprinting experiences outside the corporate domain leave enduring marks on executives’ financial reporting practices. The findings contribute to the earnings quality literature by showing that the intent and consequences of smoothing vary systematically with managerial background.

Purpose This paper aims to examine the firm-specific determinants of integrated reporting quality (IRQ) using listed companies in Sri Lanka. Design/methodology/approach This study analyses 282 integrated reports from listed Sri Lankan companies over a six-year period. Multiple regression analysis is used to investigate how firm-specific factors influence IRQ, which is measured using a combination of the integrated reporting (IR) scoreboard and a coding framework. Hypotheses are based on three complementary theories, namely, agency, signalling and legitimacy theories. Findings The results indicate that risk management intensity and firm size have a significant positive impact on IRQ. Furthermore, ownership concentration has a delayed negative effect on IRQ. Profitability, leverage, size and independence of the board and audit committee, chief executive officer (CEO) duality, board gender diversity, institutional ownership and foreign ownership do not show a significant impact. Practical implications The findings suggest that firms to improve internal risk management systems while providing high-quality integrated reports for investors and lenders to make more informed decisions. Standard-setters and regulators can also benefit by recognising what potential regulatory changes could improve IRQ across firms of various sizes, risk levels and ownership structures. Originality/value Beyond traditional corporate governance mechanisms, risk management intensity, ownership concentration, institutional ownership and foreign ownership are novel factors that have received less attention as possible determinants of IRQ. The combined IR scoreboard and coding framework used offers a novel and robust approach to assessing IRQ.

I would like to thank Matthias Thiemann and Yuri Biondi for organizing this symposium on Rating Politics and Jacqueline Best, Quentin Bruneau and Alexandra Ouroussoff for their generous reading and inspiring comments. In my response to them, I elaborate on the strengths and weaknesses of the “financial infrastructures” approach to credit ratings. I argue that this approach allows for better understanding the dependence of both states and markets on credit ratings and the counter-intuitive incentive structure that shapes rating agencies’ behavior. At the same time, this approach yields a structuralist argument that has limitations when exploring the role of ideational factors in credit rating decisions.

Purpose This study examines the relation between stakeholder proximity and firms’ use of earnings measures not prepared in accordance with generally accepted accounting principles (GAAP), commonly referred to as non-GAAP earnings. Design/methodology/approach Stakeholder proximity is measured using both geographic proximity (urban location) and social proximity (social connectedness). Using a sample of US public firms from 2002 to 2020, we estimate regression models and conduct cross-sectional and robustness analyses to address endogeneity concerns. Findings We find that stakeholder proximity is significantly and positively associated with the likelihood of non-GAAP disclosure, with social proximity exhibiting a stronger effect. Cross-sectional analyses indicate that the relation is more pronounced when information demand and financial-reporting scrutiny are higher and also stronger when firms have greater reporting discretion or face greater performance pressure. Additional tests confirm that the results are robust to endogeneity concerns and are not driven by firms’ strategic orientation. We further show that market reactions to non-GAAP disclosures are stronger for firms with greater stakeholder proximity. Originality/value This study introduces stakeholder proximity, particularly social proximity, as an important determinant of non-GAAP disclosure and provides evidence that proximity influences both disclosure decisions and investor responses.

Purpose Amid intensifying geopolitical frictions and the trend toward de-globalization, supply chain disruptions have emerged as a salient source of risk for firms, yet their implications for managerial disclosure remain unclear. Our study aims to reveal the impact of supply chain disruption risk on managerial tone management during earnings communication conferences. Design/methodology/approach Using data on China A-share-listed firms from 2006 to 2023, we examine how, why, and when supply chain disruption risk affects abnormal managerial tone during earnings communication conferences. Findings Higher disruption risk reduces abnormal managerial positive tone. The effect operates through two channels: first, managers provide more detailed factual explanations in managerial communication, which increases informational density, as evidenced by shorter and more structured sentences, thereby constraining rhetorical and emotional expression; second, higher supply chain disruption risk raises inventory pressure, which suppresses optimism. The effect is more pronounced when investor questioning is intensive, stock prices are overvalued, or supply chain concentration is high. It is more pronounced among firms with greater trade credit supply or lower excess operating profitability. Originality/value Our study contributes to the literature by linking supply chain disruption risk with strategic disclosure practices, and it offers practical implications for enhancing supply chain resilience, improving disclosure quality, and strengthening market competitiveness.

Purpose This study examines how firms respond to Hong Kong's 2017 greenhouse gas (GHG) disclosure requirement, a soft disclosure regime implemented on a comply-or-explain basis. The paper focuses on whether post-rule patterns differ between firms that voluntarily disclosed GHG emissions before the requirement and firms that disclosed GHG information for the first time after its introduction. Design/methodology/approach The study uses a sample of Stock Exchange of Hong Kong-listed firms subject to the 2017 GHG disclosure requirement and distinguishes between prior voluntary disclosers and first-time disclosers. Using a difference-in-differences design combined with propensity score matching, the paper examines three outcome domains: GHG emissions, selected operating and financial outcomes and reporting-related measures based on accrual-based and real-activity-based earnings management proxies. Additional analyses assess covariate balance, sample attrition, imputation validity, placebo tests and alternative emissions specifications. Findings The emissions analysis provides limited exploratory evidence of immediate short-run reductions in reported GHG emissions for either prior voluntary disclosers or first-time disclosers. Because observed pre-rule emissions are unavailable for first-time disclosers and most comparison firms, the emissions results rely partly on model-based estimates and should be interpreted cautiously. First-time disclosers exhibit more pronounced post-rule changes than prior voluntary disclosers in selected operating and financial outcomes, although these results are tentative because identification diagnostics are not uniformly supportive. The clearest evidence of heterogeneity appears in selected real-activity-based reporting measures, particularly abnormal operating cash flows and abnormal gains on asset sales. These patterns are consistent with reporting-related responses to increased ESG visibility and compliance burden, although they may also reflect genuine operating adjustments rather than opportunistic manipulation. Originality/value The paper contributes to the environmental disclosure and accounting literature by providing evidence from Hong Kong's soft GHG disclosure regime, an underexamined Asia-Pacific setting. By distinguishing between prior voluntary disclosers and first-time disclosers, the study highlights the role of disclosure readiness in shaping firm responses to sustainability reporting regulation. The findings suggest that, under a soft disclosure regime, heterogeneous short-run responses may appear more clearly in reporting-related operating measures than in immediate emissions reductions.

On May 19, 2026, the Securities and Exchange Commission (SEC) issued a request for comment on its proposal to simplify filer status for public companies and to adjust the accommodations provided to emerging growth companies (SEC 2026). This comment letter summarizes the views of the participating members of the Auditing Standards Committee of the Auditing Section of the American Accounting Association with respect to the effect of the proposal on the application of the internal control over financial reporting audit requirement and resulting impact on the reliability of financial statements.

On June 9, 2026, the Public Company Accounting Oversight Board (PCAOB) issued a supplemental request for comment regarding proposed amendments to QC 1000 (PCAOB 2026). This comment letter summarizes the views of the participating members of the Auditing Standards Committee of the Auditing Section of the American Accounting Association. Overall, the Committee supports the objectives of the proposal, which are to reduce unnecessary implementation costs and better align QC 1000 with other audit firm quality management standards.

The SEC’s regulatory filing review process can impose significant costs on companies, including the management time required to resolve SEC concerns and the costs that may arise from restating prior filings. Ballestero and Schmidt (2026) examine the circumstances in which companies copy their external auditor on SEC comment letter responses and whether doing so affects how quickly and favorably comment letters are resolved. They find that auditors are more likely to be copied when the SEC’s comments relate to areas within auditors’ expertise. Additionally, copying the auditor is associated with more timely comment letter responses, whereas copying more experienced auditors is associated with expedited overall resolution and improved resolution outcomes, including a lower likelihood of a restatement. Their findings (1) offer practical guidance to companies seeking to draw on auditors’ expertise and credibility during regulatory reviews, and (2) highlight opportunities for auditors to create and demonstrate value to clients. Data Availability: All data used in the study are publicly available from sources cited in the text. JEL Classifications: M41; M42; M48.

Extant accounting research documents that the division of work among human colleagues can unintentionally harm task performance. Recent advances in accounting firms’ technological capabilities, however, have enabled a new form of collaboration between human auditors and sophisticated technological tools. This article summarizes a recent study by Pearson (2025), which examines variation in engagement and performance when auditors complete work initiated by a human colleague, a technological tool, or themselves. Key study findings indicate that dividing work with a human colleague significantly reduces engagement and harms performance compared to dividing work with a technological tool or work completed independently. This article discusses the implications of these findings, highlighting the practical benefits of technology-enabled work division, particularly for objective tasks, while also discussing the potential drawbacks of collaboration among human auditors. Data Availability: Data sharing is not applicable as no quantitative datasets were generated for this article. JEL Classifications: M42.

On June 23, 2026, the Public Company Accounting Oversight Board (PCAOB) issued a request for comment on its standard-setting agenda (PCAOB 2026). This comment letter summarizes the views of the participating members of the Auditing Standards Committee of the Auditing Section of the American Accounting Association. We recommend that the Board assign its highest priority to data, technology, and artificial intelligence; fraud; and going concern. We also recommend that the Board add complex estimates, fair value measurements, and specialist evidence to its research agenda with moderate-to-high priority; use economic analysis to evaluate scalability, competitive effects, and unintended consequences; avoid creating de facto requirements primarily through inspection and remediation processes; and pursue alignment with IAASB and ASB standards unless PCAOB-specific differences are justified by investor-protection benefits that exceed implementation costs.

On July 20, 2026, the Public Company Accounting Oversight Board (PCAOB) issued a request for comment on its 2026–2030 draft strategic plan goals and objectives (PCAOB 2026a). The Auditing Standards Committee (ASC) submitted this comment letter to the PCAOB, expressing our views regarding the goals and objectives. Overall, the ASC supports the goals and objectives and provides suggestions for refining them.

Purpose This study aims to investigate the extent to which information asymmetry affects corporate investor valuation, drawing on the pecking order, agency and signaling theories. Similarly, it examines how corporate leverage and profitability levels affect the relationship between information asymmetry and corporate value. Design/methodology/approach The study’s sample consists of Egyptian firms listed on the Egyptian exchange (EGX) 100 index from 2015 to 2022. A wide (narrow) bid-ask spread indicates high (low) information asymmetry. The corporate value of Egyptian firms is measured using Tobin’s Q ratio. This study also used the market-to-book ratio to assess the firm’s value. Findings The results reveal that Egyptian listed firms with high levels of information asymmetry, particularly those with wide bid-ask spreads, tend to experience a diminished market value. However, both financial leverage and firm profitability mitigate the inverse impact of information asymmetry on corporate value, highlighting their moderating roles in this nexus. Practical implications Egyptian firms should enhance transparency and reporting to improve investor confidence and market valuation. Firms with high information asymmetry can use leverage and profitability metrics strategically to signal stability and mitigate negative impacts on value. Likewise, policymakers should enforce stronger disclosure standards to foster market efficiency in Egypt. Originality/value Our study examines the relationships among corporate value, information asymmetry and the moderating effects of firm leverage and firm profitability. To the best of the authors’ knowledge, this is the first empirical study to investigate this nexus in Egypt, thereby extending the literature to a developing economy characterized by high information asymmetry.

Purpose This study aims to investigate whether and how the other comprehensive income (OCI) amount explains firms’ future orientation toward accounting conservatism behavior. Whereas OCI provides incrementally useful and more transparent accounting information, the authors argue that a higher amount of OCI aggregate may also lead to a lower demand for accounting conservative practices. Design/methodology/approach To test the hypothesis, the authors develop a fixed-effect panel analysis involving a sample of US non-financial listed companies during a seven-year period from 2012 to 2018. Findings Coherently with the authors’ expectations, the results provide evidence that a higher amount of OCI aggregate significantly diminishes the future level of firms’ conditional conservatism. Additionally, further analyses reveal that the lowering of information asymmetry perceived by market participants is a valid channel through which such a relationship functions. Research limitations/implications The main limitations of the study arise whereas the inferences the authors made heavily depend on the chosen proxies’ validity for OCI information. Practical implications Overall, the authors’ study has important implications for both practitioners and investors, as it prompts the idea that they can predict certain accounting policies relying on the usefulness of OCI information, which consequently allows them to make more informed and economically relevant choices. Originality/value To the best of the authors’ knowledge, this would be the first research to document the relationship between OCI information usefulness and subsequent conditional conservatism behavior, under the spectrum of informativeness concerns.

Underrepresentation of women in CEO and board-chair roles persists despite decades of scholarly effort, posing a major societal concern by depriving societies of the positive contributions of women’s leadership. While existing studies have predominantly investigated boards’ monitoring and advisory roles, our study departs from this tradition by examining the mentoring role of board-chairs. We aim to identify why the CEO role remains male dominated and specifically investigate whether the ultimate objective outcomes of mentoring contribute to the women’s scarcity in C-suite roles in Australia. We draw on the social role theory to study whether the gender of the board-chair (man or woman) affects the relationship between a woman CEO and company performance. Using a two-stage least squares regression on Australian Stock Exchange 100 (ASX-100) companies from 2010 to 2020, our findings indicate that the outcomes of diverse mentoring not only fail to close the gender gap but may actually exacerbate it within ASX-100 firms.

Purpose In today’s volatile business environment, organizational agility (OAG) is critical for sustaining competitive advantage. This study aims to examine how dynamic management control systems (DMCS), strategic management accounting practices (SMAP) and knowledge management practices (KMP) contribute to the development of organizational learning capabilities (OLC) that enhance organizational agility. Design/methodology/approach Drawing on the dynamic capabilities theory and knowledge-based view, data were collected via a cross-sectional survey of 161 Saudi medium and large firms from the manufacturing and service sectors. Structural equation modeling was used to analyze the hypothesized pathways. Findings The results reveal that organizational agility arises from the integrated effects of DMCS, SMAP and KMP through OLC. KMP enhances OLC, which fully mediates its impact on agility, whereas SMAP directly strengthens agility by improving decision quality and resource adaptability. DMCS influences agility indirectly by fostering the use of SMAP and enabling OLC, highlighting its role as an enabling infrastructure that strengthens the effectiveness of these systems. Overall, agility emerges through their complementary alignment, which jointly builds adaptive capacity. Practical implications For practitioners, the findings emphasize the need to align control systems, strategic accounting and knowledge processes to cultivate learning and improve agility. This paper offers actionable insights for organizations navigating dynamic markets and advances the theoretical understanding of agility’s antecedents. Originality/value This study contributes to the literature by empirically validating an integrated framework that delineates the microfoundations of agility. It highlights the pivotal role of OLC as a mediator and reveals the complementary yet distinct pathways through which DMCS, SMAP and KMP operate.

Purpose This study aims to examine whether mandatory sustainability/corporate social responsibility (CSR) disclosure generates spillover effects beyond firms directly subject to regulation. While prior research focuses mainly on direct compliance effects, little is known about whether disclosure mandates reshape reporting practices among nonregulated firms, despite the relevance of this question for current debates on the scope of European Union (EU) sustainability regulation. Design/methodology/approach Using Sweden’s implementation of the Non-Financial Reporting Directive (NFRD) as a natural experiment, the study exploits statutory size thresholds that distinguish directly regulated firms from nonregulated listed small and medium-sized enterprises (SMEs) within a common institutional environment. A generalized difference-in-differences design estimates reform effects for directly regulated Swedish firms and nonregulated Swedish SMEs relative to non-EU manufacturing firms, while using variation in SMEs’ distance from the thresholds to identify spillover effects. CSR reporting is measured using hand-collected annual and CSR reports and issue-level coding of substantive disclosures based on a SASB materiality framework. Findings Nonregulated SMEs close to the thresholds increase CSR reporting substantially following the reform, with stronger effects among firms with low pre-reform reporting levels. The findings indicate that mandatory disclosure can generate meaningful spillover effects beyond formally regulated firms and that firms near regulatory thresholds may respond strongly even when legally outside the mandate. Originality/value The study shows that mandatory CSR disclosure can reshape reporting practices among firms legally outside the mandate. It theorizes regulatory thresholds as institutional boundary markers that heighten visibility, stakeholder expectations and uncertainty about future inclusion, linking targeted transparency with spillover coercive and mimetic pressures beyond formal compliance boundaries.

Purpose Fragmentation remains a central challenge in sustainability reporting, especially in the shift from voluntary to mandatory regimes. This study aims to examine whether Integrated Reporting (IIRF) quality aligns with sector-specific Sustainability Accounting Standards Board (SASB) disclosure quality under Chile’s dual mandate (NCG 461). Although both aim to enhance transparency, they reflect distinct logics, holistic value creation versus financially material, industry-specific disclosure. Whether these logics translate into aligned practice under a mandatory setting remains unclear. Design/methodology/approach Using 290 firm-year observations (2022–2023), this study constructs formative, framework-anchored disclosure quality indices for IR and SASB based on item-level coding. This study estimates fixed effects association and interaction models to test complementarity versus operational independence, supported by standard diagnostics and robustness checks. Findings IR and SASB quality are weakly correlated, and the IR × SASB interaction term is statistically insignificant. The evidence supports a pattern of parallel disclosure rather than substantive integration. Firms appear to converge in form under regulatory pressure, yet narrative connectivity and sector material metrics remain loosely coupled. Results are stable across specifications. Research limitations/implications The analysis covers two reporting years under NCG 461, constraining causal identification and precluding dynamic panel models; findings are therefore associational and specific to an emerging-market, early-mandate setting. The SASB quality assessment relies on structured human coding without formal inter-coder reliability statistics. Future research should exploit quasi-experimental variation from regulatory thresholds or staggered International Sustainability Standards Board (ISSB) adoption, develop longer multi-year panels and incorporate replicated double-coding designs to strengthen methodological transparency. Practical implications Institutional consolidation alone does not produce substantive integration. Regulators should introduce standardized IR–SASB reconciliation schedules, mandatory linkage notes and staged assurance on narrative–metric coherence. Preparers need to redesign reporting workflows so each IR content element is explicitly anchored in SASB metrics, supported by clear data ownership and an integrated close process. Investors should not treat IR quality as a proxy for SASB quality but should request explicit reconciliations and linkage-focused assurance statements. Social implications Fragmented sustainability reporting obscures how firms manage material Environmental, Social and Governance (ESG) risks, undermining stakeholder trust and the credibility of transition narratives. By documenting parallel disclosure under a mandatory regime, this study shows that formal convergence of standards does not automatically deliver decision-useful information for society, regulators or capital markets. Strengthening narrative–metric linkage, ESG data governance and assurance on coherence can enhance transparency, reduce greenwashing perceptions and support more informed capital allocation toward firms that genuinely integrate sustainability into strategy and long-term value creation. Originality/value To the best of the authors’ knowledge, this study provides one of the first direct cross-framework tests of IR–SASB alignment under a mandatory dual-adoption regime. It introduces a typology of integration outcomes and offers implementation relevant insights for regulators, firms and investors in the ISSB era.

Purpose This study aims to examine how belief and boundary controls influence managers’ withdrawal cognitions in the governmental sector. Drawing on person-organization fit theory, it investigates the mediating role of organizational citizenship behavior (OCB) and the moderating role of allocentrism. Design/methodology/approach This study develops and tests a moderated mediation model using survey data collected from managers working in governmental organizations in the United Arab Emirates. Structural equation modeling is employed to examine the direct, indirect and conditional relationships among the study variables. Findings The results indicate that belief systems and boundary controls positively influence OCB, which in turn reduces managers’ withdrawal cognitions. OCB fully mediates the relationship between belief systems and withdrawal cognitions and partially mediates the relationship between boundary controls and withdrawal cognitions, highlighting its role as a key behavioral mechanism through which management control systems shape employee attitudes. Furthermore, allocentrism significantly moderates the OCB-withdrawal cognitions relationship, such that the protective effect of OCB is weaker among highly allocentric managers, suggesting that discretionary behaviors may be perceived as social obligations rather than voluntary contributions. Research limitations/implications This study extends management control research by identifying withdrawal cognitions as an important behavioral outcome of belief and boundary controls. It also advances person-organization fit theory by explaining how management controls foster discretionary behaviors that strengthen employee attachment to public organizations. Practical implications The findings suggest that public organizations can reduce withdrawal cognitions by strengthening belief and boundary controls that encourage OCB and reinforce alignment between employees and organizational values. Originality/value This study innovates by examining the behavioral effects of belief and boundary control systems on withdrawal cognitions through OCB in a public sector context, highlighting the contingent role of allocentrism in shaping these relationships.

Purpose This study aims to use a supply chain management (SCM) approach to develop a disclosure index for business model (BM) reporting. Design/methodology/approach BM reporting focuses on how organizations create, deliver and capture value over time. To construct the index, this study draws on previous literature, recent examples of supply chain disruptions and interviews with managers from manufacturing and retail companies. Guided by the resource-based view (RBV), this study identifies the structure and resources of supply chains. The interviews further clarified supply chain structures and dynamics, as well as the impact of the pandemic. The resulting index was then tested using a sample of 67 UK manufacturing and retail companies for the years 2018 and 2021. Findings The operationalization of the index revealed that BM disclosures increased during COVID-19, suggesting that greater transparency was needed amid the uncertainties in global supply chains during times of crisis. Practical implications The index proposed in this study is expected to raise awareness among shareholders of the importance of value-creation activities in BM reporting from a supply chain perspective. Originality/value The comprehensive disclosure index developed in this study provides a novel approach to the operationalization of BM reporting via a SCM lens. This underscores the practical implications of BM disclosures amid the uncertainties of a global supply chain disruption, such as that caused by COVID-19.

Purpose This study aims to examine how physical activity, as an agentic self-care practice, is associated with thriving at work and task performance among accountants, auditors and finance professionals. Drawing on the socially embedded model of thriving at work and the challenge–hindrance stressor framework, this study explores the associations between physical activity, job stressors, workplace thriving and task performance. Design/methodology/approach An explanatory sequential mixed-method design was applied. Quantitative survey data were analyzed using structural equation modeling and complemented with semistructured interviews to contextualize and deepen the quantitative findings. Findings The findings indicate differential associations across physical activity intensities. Vigorous activity is more strongly associated with vitality, whereas light activity is more strongly associated with learning. Thriving, in turn, is positively associated with task performance, suggesting that it may represent an important psychological pathway linking physical activity and task performance. Hindrance stressors are negatively associated with thriving, whereas challenge stressors are positively associated with learning. Originality/value This study extends behavioral accounting research by conceptualizing physical activity as an agentic self-care and energy-management strategy within accounting, auditing and finance settings. By integrating quantitative and qualitative evidence, it highlights thriving as a key psychological pathway linking physical activity and contextual work demands with sustained functioning in cognitively demanding professional environments. The findings also provide practical insight for organizations seeking to create movement-supportive work environments that encourage employee self-care and workplace thriving.

Purpose This study aims to critically examine the evolution of local government performance evaluation by analysing its theoretical perspectives, research contexts, evaluation characteristics and methodological approaches. It aims to identify structural imbalances that generate a structural lock-in and constrain the normative transformation of performance evaluation. Based on these findings, the study proposes a normative reorientation that repositions performance evaluation as a governance instrument for public value creation. Design/methodology/approach A critical systematic literature review (SLR) of 131 journal articles was conducted. Bibliometric analysis mapped the development of the literature (RQ1), content analysis classified studies using the Theory–Context–Characteristics–Method (TCCM) framework (RQ2) and the findings were synthesised to derive conceptual implications and future research directions (RQ3). Findings The literature has evolved from a focus on financial performance and efficiency towards a multidimensional perspective encompassing governance, public value, sustainability and organisational capacity. However, the TCCM synthesis reveals persistent structural imbalances that reinforce a structural lock-in. Performance management and new public management remain dominant; studies are concentrated in developed-country contexts and quantitative approaches continue to prevail. Although public value and sustainability receive increasing attention, they remain weakly integrated into evaluation design. Practical implications It provides a conceptual foundation for developing more adaptive, context-sensitive and public-value-oriented evaluation frameworks. Originality/value Unlike previous reviews that primarily catalogue tools and indicators, this study integrates a critical SLR and a TCCM-based synthesis to explain how structural imbalances interact to sustain technocratic evaluation practices. It provides a conceptual foundation for developing more adaptive, context-sensitive and public-value-oriented evaluation frameworks.

Purpose Without imposing an ex ante functional form, the study re-examines the established decreasing trend in accounting value relevance to determine whether it reflects a genuine decline or a methodological bias. It compares the data-driven relationship between earnings and market value with the theoretical predictions of the dynamic real option model. Further, we hypothesize various consequences of this model for the value-relevance trend. Design/methodology/approach We employ random forest models on 7,884 firm-year observations from 657 companies traded on the Bombay Stock Exchange over 2012 and 2023. This nonparametric method lets the data determine the functional form and eliminates overfitting through out-of-bag predictions. Findings Random forest outperforms linear models. Aggregate value relevance has not declined; it exhibits an upward trend, mainly due to the rising relevance of book equity. The previously documented decline stems from shifts in sample composition and restrictive linear specification. The empirical earnings–price relationship is consistent with the dynamic real option model for positive earnings, and the hypotheses are consistent with this valuation framework. Originality/value We apply machine learning to address the limitations of linear models and integrate dynamic real option theory to explain changes in value relevance over time in an emerging market.

Purpose This study examines the heterogeneous effects of environmental taxes and carbon dioxide (CO2) emissions on economic growth and investigates whether institutional quality conditions these relationships across developing economies. Design/methodology/approach Using an unbalanced panel dataset of 55 developing countries during 2010–2022, this study applies panel quantile regression and conducts robustness analyses using alternative estimation approaches. Findings First, environmental taxes negatively affect economic growth, with stronger adverse effects at higher growth quantiles. Second, CO2 emissions exhibit a positive and relatively stable association with economic growth, suggesting continued dependence on carbon-intensive production structures. Third, institutional quality strengthens the negative effect of environmental taxes at lower growth levels but mitigates this effect at higher growth levels. Finally, institutional quality weakens the positive relationship between CO2 emissions and economic growth across growth distributions. Research limitations/implications This study provides theoretical insights into how institutional quality shapes the growth effects of environmental taxation and environmental pressure across different growth conditions. Practical implications The findings suggest that improving institutional quality may help reduce the economic costs associated with environmental taxation while supporting more balanced economic and environmental policy implementation in developing economies. Originality/value This study extends the literature by demonstrating that the economic effects of environmental taxation and environmental pressure are not uniform across growth conditions but depend on institutional quality, thereby providing new evidence on the institutional conditions under which environmental policies influence economic growth.

Purpose This study investigates how board diversity interacts with family control to influence corporate financial performance (CFP), relying on agency theory, resource dependence theory, and socio-emotional wealth theory. Design/methodology/approach Using panel data from 72 Malaysian family firms between 2018 and 2022, this study employs the system generalized method of moments to examine the effects of board independence, gender diversity, education level, educational background, and foreign representation on CFP, while testing the moderating role of family control. Findings Gender diversity consistently enhances CFP, but business-related educational backgrounds show a negative association. These effects intensify under stronger family influence. Research limitations/implications This study is based on five years of data from 72 Malaysian family firms, which narrows the range of observable governance patterns and may not be directly generalizable to other jurisdictions. Practical implications This study provides actionable insights for family firms, suggesting that gender-diverse boards enhance profitability, while overreliance on specialized educational expertise may be counterproductive. Family business owners should align board composition with family values and long-term objectives. Social implications By highlighting the benefits of gender diversity and inclusive governance, this study contributes to broader efforts promoting equity and sustainability in corporate leadership. It also supports policy development aimed at improving governance standards in family-owned businesses, particularly within emerging economies. Originality/value This study offers a comprehensive view of governance in emerging-market family firms by adopting a multidimensional measure of family control and demonstrating that the impact of board diversity depends on the socio-emotional priorities that shape decision structures in family-controlled environments.

Purpose In response to calls for more critical paradigms in Social and Environmental Accounting and Accountability (SEAA), this study challenges the treatment of corporate sustainability as a “black box.” We investigate the internal mechanisms that drive authentic Environmental, Social, and Governance (ESG) performance by developing and testing an integrated model of financial capacity, governance architecture, and ownership structure. Design/methodology/approach We integrate Slack Resources Theory with principles from Agency and Stewardship theories to hypothesize a non-linear relationship between financial slack and ESG outcomes, moderated by corporate governance and ownership. The framework is tested on a panel of 383 European listed firms from 2015 to 2023 using a dynamic panel System GMM estimator to address endogeneity and persistence. Findings Our results challenge the conventional inverted U-shaped paradigm. We find robust evidence of a traditional U-shaped (convex) relationship between financial slack and ESG performance, supporting a “too-little-of-a-good-thing” (TLGT) effect where substantive ESG investment requires a critical threshold of resources. We further find that board independence and dedicated sustainability committees are positively associated with ESG performance. Notably, long-term institutional ownership moderates this relationship, disciplining slack allocation and fostering value-enhancing sustainability initiatives. Research limitations/implications The findings should be interpreted in light of some main limitations. First, the analysis focuses on large listed European firms, which may limit the generalizability of the results to SMEs, unlisted firms, or non-European institutional settings. Second, although our composite measure of financial slack captures multiple financial dimensions, it does not distinguish among alternative forms of slack that may affect ESG performance differently. Finally, an additional path for future research could be to delve into the sectoral heterogeneity that emerged in our study, investigating why the “materiality” and effectiveness of specific governance mechanisms differ across industries. Practical implications The findings offer a toolkit for investors and auditors to critically assess sustainability disclosures beyond surface-level scores. By analyzing the interplay of slack, governance, and ownership, stakeholders can better identify authentic commitment. Originality/value The study advances theory by synthesizing Slack Resources, Agency, and Stewardship perspectives to explain ESG performance. The paper's primary contribution is the empirical validation of a new paradigm for the slack-ESG relationship. By demonstrating the systemic interplay between financial means, governance oversight, and ownership structure, we provide a nuanced framework for distinguishing genuine sustainability from “greenwashing”, offering a valuable toolkit for investors, boards, and regulators.

This study evaluates the effects of CFO gender and risk-level on external auditor’s risk assessment. Although females continue to be under-represented in leadership positions, their increasing presence serves as a catalyst for exploring gender issues in accounting. Although auditors train to make neutral assessments of fraud risk, humans inherently make assessments through the lens of biases and social stereotypes. Utilizing SRT, we hypothesized that auditors will assess high-risk male CFOs as higher fraud risk. In a 2 × 2 study of external auditors, we found that CFO risk is significant (expected as a replication of prior studies). CFO gender is not significant and auditors fail to respond to risk of female CFOs. Participants rated male CFOs with higher competence, remaining impartial toward female CFOs. This study extends the research on accounting gender studies and provides research opportunities to understand the impact of client gender on audit efficiency and effectiveness. Data Availability: Data are available from the public sources cited in the text. JEL Classifications: M40; M41; M42.

This research examines institutional failure among private equity-owned healthcare organizations using a configurational forensic research design. Drawing on the fraud diamond framework, we analyzed 15 legal cases involving hospitals, skilled nursing facilities, behavioral health providers, physician-staffing firms, and ancillary service organizations. Data are derived from bankruptcy proceedings, False Claims Act settlements, and federal litigation. Employing fuzzy-set Qualitative Comparative Analysis (fsQCA), we identify multiple pathways through which financial pressure, structural opportunity, managerial capability, and rationalization combine to produce institutional breakdown. Results reveal three dominant failure configurations reflecting debt-driven governance collapse, revenue and financial manipulation, and compliance and oversight failures. Across pathways, managerial capability and rationalization narratives emerge as highly prevalent conditions associated with failure. By integrating configurational analysis with detailed legal evidence, the study extends fraud-based theories of misconduct and provides practical guidance for forensic accountants, auditors, and regulators seeking to identify early warning signals in private equity-backed healthcare organizations. JEL Classifications: M41; M48; G34.

Purpose This study examines small and medium-sized enterprise (SME) participation in European public procurement, aiming to understand disparities across member states despite harmonised EU Directives. Design/methodology/approach Using a novel dataset of 839,778 tenders with information about SME participation from the Tenders Electronic Daily (TED) platform covering 29 countries from 2018 to 2023, we analyse SME participation rates, contract award shares, and geographic competition patterns. Findings Significant variation is observed: Eastern European countries exceed 80% SME participation, while several Western European countries remain below 40%. SMEs participate in about 80% of tenders but secure only 40–60% of contract values. Geographic proximity enhances SME competitiveness in local markets, especially for contracts under €500,000. Institutional and administrative factors appear more decisive than regulatory frameworks alone. Research limitations/implications Limitations include potential data quality issues. However, these were mitigated where possible, and the database remains the only available offering comparable data across Europe. Future research should explore institutional and cultural factors in greater depth through country-level studies. Practical implications Policymakers should adopt tailored approaches addressing administrative complexity and regional market conditions, simplifying procedures and improving data transparency to boost SME inclusion. Social implications Identifying ways to promote SME participation can support corrective actions that foster economic inclusion and strengthen local entrepreneurship across the EU. Originality/value This study provides new empirical evidence on the “implementation paradox” in EU public procurement, highlighting the need for context-specific strategies to enhance SME inclusion.

Purpose While nonprofit organizations play a critical role in advancing social equity and serving disadvantaged populations, their capacity to fulfill this mission depends fundamentally on their ability to sustain operations amid fiscal and operational pressures. This study examines the factors that characterize nonprofit organizational resilience and response strategies during periods of uncertainty. Design/methodology/approach Using exploratory and confirmatory factor analysis of survey data, we develop an empirically grounded typology of nonprofit adaptive responses to crisis conditions. Findings We identify four distinct but interrelated strategic response clusters: financial strategy, leadership and management strategy, service reduction strategy and human resource management strategy. These factors represent coherent patterns of organizational behavior that nonprofit leaders deploy when confronting environmental shocks and operational pressures. Practical implications Recent crises, including the COVID-19 pandemic, have underscored the imperative for nonprofit organizations to develop adaptive capabilities that enable continued service delivery under volatile conditions. This study investigates how US nonprofit organizations respond to external pressures via response strategies. Originality/value Our findings contribute to an original but grounded theoretical understanding of organizational resilience in the nonprofit sector while offering practical insights for nonprofit leaders navigating uncertain environments.

Purpose Public-sector accounting is increasingly recognized as a fundamental enabler of sustainable development, particularly through its capacity to support transparent measurement, management, and disclosure of Sustainable Development Goals (SDG) achievements. This study examines the relationship between accrual accounting practices at the government level and progress in the social pillar of the SDGs in EU Member States from 2016 to 2022. Design/methodology/approach The social pillar of the SDGs is based on a composite index drawing on indicators from seven EU SDGs considered by the EU to reflect social sustainability. The analysis employs econometric techniques to estimate the relationship between accrual accounting and social SDG achievements, also controlling for macroeconomic variables and regional disparities. Findings The results suggest a positive association between accrual accounting practices and social sustainability. Furthermore, they reveal that social protection expenditure and pre-existing levels of social sustainability are the primary drivers of social SDG achievement in the EU countries, reflecting a path-dependent and policy-driven pattern. Practical implications Our study expands the implications of public financial management beyond those advocated in New Public Management and provides evidence that advanced accounting practices can also support societal sustainability objectives. The results also provide tangible evidence to encourage European Union countries to invest in advanced accrual accounting systems now that the development of European Public Sector Accounting Standards has been put on pause by Eurostat. Originality/value Our findings offer valuable insights into the role and potential of public financial management tools, such as accrual accounting, in promoting and facilitating social sustainability.

Purpose The purpose is to analyze the performative role of accounting in shaping organizational arrangements around resource scarcity and patient flow in healthcare organizations. Design/methodology/approach A qualitative case study was conducted at an emergency unit (emergency room) in a Swedish hospital. The study draws on interviews, accounting reports, budgets, operating plans and newspaper articles collected between 2020 and 2025 to examine the performative role of accounting in addressing resource scarcity and coordinating financial control and patient flow. Findings The study illustrates how accounting practices make crowding and resource scarcity visible, actionable and negotiable across organizational boundaries. The findings show how accounting contributes to redistributing accountability, reframing crowding as a system-wide organizational problem and enabling temporary organizational arrangements aimed at improving patient flow and managing resource scarcity. Originality/value This study contributes empirically by illustrating how accounting not only creates tensions between financial control and patient flow but also becomes mobilized by managers to make problems visible and to negotiate the redistribution of scarce resources. It therefore shows how accounting has become integrated in healthcare operations and professional work in established New Public Management settings. Conceptually, the study specifies the performative role of accounting through three interrelated dimensions: the constitution of crowding as a system-wide organizational problem, the redistribution of accountability across organizational boundaries and the materialization of temporary organizational arrangements as a response to system-wide problems.

Purpose In this paper, we critically discuss a new framework for the purposes of local authority accounts and its relationship to the core concepts of accountability, transparency and local democracy. Design/methodology/approach This is accomplished via a critical review of the first UK Parliamentary inquiry of local audit and accounting arrangements. Findings With reference to this inquiry, we largely agree with the Committee that accounts are important as a credible record, as providing accountability for spending, for value for money, to provide information necessary to run local authorities, and for public reporting of potential issues. However, we suggest that the framework must be interpreted critically, ensuring public accountability is meaningfully enhanced, rather than detached rhetorically from practical action. We also suggest the proposed purposes need to be understood with reference to what it is local authorities are being held accountable for, to whom authorities are accountable and who it is within the authorities rendering the account. Taken together, we suggest the new framework can contribute to much-needed public accountability but note the need for more explicit emphasis on local democracy and public engagement. Originality/value The paper provides a framework for how audit and accounting arrangements can be mobilised to improve public accountability across Local Government contexts and a reflection on the importance of critical interpretation of policy recommendations.

Purpose This study examines how Supreme Audit Institutions (SAIs) are undergoing digital transformation (DT) and explores the main drivers, organisational dimensions and effects associated with the integration of emerging and cognitive technologies into public sector auditing. Design/methodology/approach The study adopts a qualitative comparative approach based on in-depth semi-structured interviews conducted across the six Napoleonic SAIs of the European Union. The analysis focuses on how DT affects organisational structures, strategies, human capital and audit processes. Findings The findings show that DT in SAIs is primarily an institutional and organisational process rather than a purely technological one. Although technologies such as artificial intelligence and data analytics are widely recognised, their adoption remains uneven and largely incremental. Variations across SAIs are strongly influenced by institutional capacity, strategic alignment, organisational culture and the availability of digital and analytical skills. The study also highlights that DT is enhancing the ability of SAIs to process large volumes of data and support more timely and evidence-based oversight. Research limitations/implications The study focuses on the Napoleonic SAI model within the European Union, limiting the generalisability of findings to other institutional contexts. Nevertheless, the results provide practical insights for policymakers and SAI managers regarding the alignment of digital strategies, organisational capabilities and professional skills in the digital era. Originality/value The paper contributes to the literature on public sector auditing and digital governance by conceptualising DT as a multidimensional organisational transformation shaped by institutional and cultural factors rather than as a solely technology-driven change.

Purpose Along with other Central and Eastern European (CEE) countries that emerged from the socialist system, Slovenia went through a process of transforming its political, economic and welfare systems. The fact that, like in the preceding period, the public sector is today primarily responsible for the provision of social services influences non-governmental organisations (NGOs') development and funding. Noting that just 40% of the 27,000 NGOs in the country have annual total revenues higher than €5,000, the main goal was to evaluate how financially stable and resilient Slovenian NGOs are as well as their potential to develop. Design/methodology/approach The paper presents descriptive analysis of financial data, which is supported by results of a national research project. The financial data were obtained from the agency of the Republic of Slovenia for Public Legal Records and related services along with the Treasury Directorate at the Ministry of Finance. Findings Considerable differences exist in the NGO sector regarding core business and activities, as well as financing models. Institutes are largely service providers and market-oriented and employ more staff, compared to associations that are predominantly expressive organisations with a funding model involving more equally distributed sources. The results for year 2021 show that with an average of 70.0% of their revenue generated in the market and 76.2% of entities having an income concentration index above 0.75, Slovenian institutes are undoubtedly more financially vulnerable than associations. Originality/value Deep insights are provided concerning the financial stability and resilience of the NGO sector in Slovenia, a former socialist country that after three decades, is facing challenges linked to social disparities, environmental pressures and declining trust in institutions. In this context, NGOs represent agents of social coherence and transformation.

Purpose This study aims to investigate how internal collaborative culture within public educational institutions influences the creation of public value, particularly in contexts of social and economic vulnerability. While public value theory has evolved from managerial to co-productive and normative interpretations, its operationalization remains limited-especially in the field of adult education. Drawing on frameworks from public management and organizational theory, this research develops and empirically tests a model in which collaborative culture enables distributed leadership, knowledge-sharing systems, and collaborative governance. These organizational conditions, in turn, support the adoption of student-centered teaching practices that enhance public value outcomes. Design/methodology/approach The empirical analysis focuses on Provincial Centres for Adult Education (CPIAs) in Sicily (Italy), institutions that provide educational services to marginalized populations, including migrants, unemployed adults, and early school leavers. Data were collected through a structured survey administered to CPIA teachers across multiple provinces. The study employs Structural Equation Modeling (SEM) to test direct and mediated relationships between the variables. Findings Results demonstrate that a strong collaborative culture fosters internal organizational capacity and external stakeholder engagement, both of which are critical for implementing inclusive, student-centered teaching strategies. These strategies, in turn, are strongly associated with perceived public value creation. Originality/value The findings contribute to the literature by highlighting the role of internal organizational dynamics in enabling public value co-creation in the education sector, and by offering insights for policy and practice in complex governance environments.

Purpose Pension fund debt remains a controversial issue in public finance, with states often underfunding their pension systems despite guidelines from the Governmental Accounting Standards Board. This study examines whether states with term limit legislation contribute more effectively to pension funds ‘debt ratios, a proxy for prioritizing long-term fiscal health. Design/methodology/approach Using panel data from all 50 states from 2001 to 2022, this study uses panel regression models to assess the link between legislative term restrictions and state pension funding ratio. The analysis takes into account political, economic, governmental and demographic controls, such as legislative makeup, economic performance, tax and spending limits and population characteristics. Findings The findings indicate that states with legislative term limits tend to exhibit significantly higher pension funding ratios than states without term limits. The findings refute assumptions that term limitations inevitably favor short-term budgetary decision-making, implying that institutional turnover may, under some situations, improve long-term pension funding behavior. Research limitations/implications The study does not account for plan-level governance changes, actuarial assumptions or informal political negotiations that may influence contribution decisions. Practical implications The findings emphasize the need to develop pension financing rules that insulate long-term fiscal commitments from short-term budgetary constraints. Strengthening transparency, monitoring contribution methods and clarifying pension funding responsibilities can help states enhance fiscal sustainability and minimize unfunded pension liabilities. Originality/value This analysis adds to the literature on public finance and legislative organizations by connecting term limits to pension debt management, an understudied aspect of fiscal health. By focusing on pension funding ratios as a measure of long-term fiscal responsibility, the study sheds light on how institutional structure influences state financial decision-making and public sector fiscal sustainability.

Purpose Public pension funding levels have declined over the past two decades, yet stakeholders lack clear or comparable indicators of what has driven those changes or what the trend means for fiscal health. Although financial reporting reforms have aimed to improve transparency and visibility, actuarial reporting remains highly technical and embeds discretionary and political choices about assumptions and methods that shape how pension finances are represented. This article examines how actuarial valuation reports capture changes in unfunded liabilities and assesses the extent to which reporting practices clarify or obscure the drivers behind shifts in pension funding levels. Design/methodology/approach Using a comparative case study of Connecticut, Illinois, Kansas and Pennsylvania, we use a forensic analysis approach to decompose yearly changes in unfunded pension liabilities. Drawing on actuarial valuation reports and annual comprehensive financial reports, we adapt the Center for Retirement Research's forensic analysis approach to construct a dataset that tracks year-to-year changes in unfunded liabilities and attributes those changes to specific factors. We also examine how each system reports these changes, documenting variation in reporting categories, level of detail and consistency across years to assess how the financial and actuarial reports provide information to users of those documents. Findings The drivers of changes in unfunded liabilities vary across our case study states, complicating common narratives about the causes of pension underfunding. Assumption and methodology changes dominate in Connecticut, while in Illinois, sustained contribution shortfalls drive declines. In Pennsylvania, major legislative actions explain the erosion of its funding levels. Last, in Kansas, growth in unfunded liabilities was driven by capped contributions and assumption revisions. Across the four cases, reporting practices remain inconsistent and often obscure the factors underlying changes in pension funding levels. Originality/value This article reframes debates on pension underfunding by highlighting how actuarial reporting itself is a central and underrecognized driver of perceptions of fiscal health. We demonstrate that with shared interpretive standards, actuarial reporting constructs rather than clarifies pension system conditions, limiting the usefulness of funded ratios and other common indicators.

Purpose Manufacturing firms increasingly invest in artificial intelligence (AI) to support digital transformation and industrial decarbonization, yet these investments do not consistently generate meaningful environmental improvements. Addressing this sustainable development problem, this study aims to examine how supplier and customer integration shape the relationship between AI capability and environmental performance. Design/methodology/approach Grounded in dynamic capabilities theory (DCT), this study tests a moderated configurational model using survey data from 426 Chinese manufacturing firms. Hierarchical regression and three-way interaction analysis examine the moderating and synergistic roles of supplier and customer integration. Robustness checks address non-response bias, common method bias and endogeneity through 2SLS. Findings AI capability is positively associated with environmental performance, and supplier integration strengthens this relationship. Customer integration has no stable standalone moderating effect, but its joint alignment with supplier integration produces a significant positive three-way interaction. AI therefore generates greater environmental value when embedded in a bidirectionally integrated supply chain. Practical implications The findings suggest that firms should not deploy AI systems in isolation but align them with upstream and downstream integration mechanisms. Strengthening supplier collaboration enhances structured data inputs for AI optimization, while coordinated customer integration helps align environmental innovation with market expectations. Managers should embed AI initiatives within closed-loop supply chain governance structures to maximize sustainability outcomes. Social implications The societal value of AI-enabled manufacturing depends on supply-chain arrangements that support reliable environmental information and coordinated action. Policies integrating digital upgrading with environmental data standards, responsible procurement and cross-organizational accountability can better advance sustainable industrialization, responsible production and climate action, thereby contributing to SDGs 9, 12 and 13. Originality/value This study conceptualizes AI capability as an analytical enabler of dynamic capabilities rather than a standalone technological resource. It refines the application of DCT by introducing a technology–structure synergy perspective, revealing the configurational and threshold conditions under which AI translates into environmental performance. By empirically identifying a three-way interaction effect, this study bridges digital capability research and sustainable operations management within a supply chain embeddedness framework.

Purpose This study aims to explore the salient identity and the perceptions of professional accountants by focusing on the interplay between individual drivers and the self-perceived salient identity in the context of climate change and sustainability accounting in the evolving environment of mandatory sustainability reporting regulations. Design/methodology/approach This study surveys registered professional accountants in two Italian regions: Trentino and Puglia and collects 11 open-ended responses. Based on 212 responses from the survey and open-ended responses, this study frames them through the role-identity salience framework (Callero, 1985). The majority of the responses are highlighted as salient identities of professional accountants. Findings The majority of professional accountants perceive their salient identities within the broader financial and sustainability accounting. However, they view their crucial roles to go beyond existing financial accounting practices and perform sustainability accounting to achieve Sustainability Development Goals. A key contradiction emerges in that their roles are simultaneously constrained by bureaucratic obligations, regulatory unfamiliarity and institutional inertia, indicating an identity variance. Practical implications This study offers insights into professional accountants’ perceptions of sustainability regulations and standards in a European Union member state, which professional bodies and regulators may incorporate in disseminating and streamlining the regulatory guidelines. Other jurisdictional professional bodies and policymakers may also use these findings to develop accountants’ regulatory knowledge. Specifically, the findings of this study highlight the urgent need for professional bodies to move beyond technical standard-setting and actively engage in identity regulation to encompass sustainability accounting. Social implications The salient identity crucially highlights accountants’ evolving social roles in balancing financial and sustainability accounting practices. It highlights accountants’ identities in bringing social practices to shape the future of the accounting profession. In the small and medium-sized enterprise (SME) context specifically, the findings underscore the consequential social role of professional accountants as capability-builders whose engagement with sustainability accounting directly shapes SMEs’ capacity to contribute to the broader sustainability transition. Originality/value This study offers novel insights into professional accountants’ individual identity constructions from the internal perspective in the changing situation of climate change accounting and sustainability reporting regulations. Through the lens of role-identity salience framework and with a focus on SMEs, this study shows unique findings of accountants’ opinions of their internal identities and highlights the most important (salient) ones within their self-definitions of contributing to and achieving Sustainability Development Goals.

Purpose This paper aims to investigate how social media can support both upward and downward accountability in non-governmental organisations (NGOs), with a specific focus on women’s empowerment and literacy in local communities. It examines how digital platforms contribute not only to fundraising and donor engagement but also to knowledge diffusion, behavioural change and community-level accountability. Design/methodology/approach The study adopts a qualitative case study approach, drawing on longitudinal fieldwork conducted between 2019 and 2024 within the NGO Audiopedia. Data were collected through participant observation, semi-structured interviews, document analysis and social media content analysis, focusing on the use of Instagram, Facebook, Google Ads and WhatsApp to enact accountability relationships. Findings The findings show that social media enables the integration of upward and downward accountability within a single digital ecosystem. While visually oriented platforms support upward accountability by enhancing visibility and fundraising, audio-based messaging applications facilitate downward accountability by empowering women beneficiaries through accessible, voice-based learning. This dual use of social media fosters women’s literacy, community engagement and effective fundraising if the NGOs invest in dedicated human resources and adopt appropriate digital strategies. Practical implications The study highlights that NGOs can enhance both fundraising effectiveness and women’s empowerment by strategically aligning social media tools with the capabilities of their beneficiaries. In contexts of low literacy, audio-based platforms such as WhatsApp are particularly effective in supporting learning, mentoring and sustained engagement. Social implications The findings suggest that social media can act as inclusive accountability mechanisms that amplify marginalised voices and support gender equality, in line with the UN Sustainable Development Goals. The increasing women’s literacy contributes to create concrete assets for fighting poverty (SDG 1) and improve quality education (SDG 4). Policymakers and development agencies should recognise digital platforms not only as communication tools but also as enablers of social value creation within local communities. Originality/value This study contributes to the accountability and stakeholder engagement literature by conceptualising social media as an empowerment tool. It offers novel insights into how NGOs can integrate upward and downward accountability to create social value, particularly through initiatives such as women’s literacy and community empowerment in developing contexts.

Purpose This paper aims to propose a conceptual model to guide public decision makers in orienting public expenditure towards sustainable development, aligning public targets with the sustainable development goals (SDGs) established by the United Nations. It addresses the need for decision-support tools that connect fiscal choices to measurable sustainability outcomes. Design/methodology/approach This study develops a conceptual decision-support framework grounded in three perspectives: the positioning strategy of public administrations (PAs) with respect to sustainable development indicators; the maximisation of impact in terms of multidimensional well-being; and the efficiency of public resources through public–private partnership (PPP) schemes. The framework links SDG-related performance indicators, public expenditure dynamics and the design logic of Pay-by-Result (PbR) mechanisms. Illustrative policy contexts from two Italian municipalities are used to motivate the framework rather than to provide empirical validation. Findings The model specifies a structure, key assumptions and an operational workflow that PAs can use to explore SDG prioritisation and spending alignment under alternative parameter choices. It is flexible and can be calibrated across different levels of PA, from central to local and to different sustainability measurement frameworks. Research limitations/implications The framework points to a clear empirical agenda. Future studies can test alternative benchmarking strategies and criticality thresholds; validate and compare budget-to-SDG mapping protocols across jurisdictions; estimate SDG interaction parameters and expenditure elasticities using suitable panel data and identification strategies; and evaluate PbR-type implementations with robust causal designs, explicitly examining equity and accountability outcomes alongside efficiency. Practical implications The framework proposed in this study offers PAs a workflow to prioritise SDGs, allocate expenditure consistently with sustainability targets and design PbR contracts that tie payments to measurable outcomes. Social implications By orienting public spending towards SDG-aligned outcomes, the model supports more accountable and impact-oriented use of public resources, with potential benefits for multidimensional well-being at the community level. Originality/value The paper contributes to the sustainable finance literature by connecting environmental and social public strategies to public spending trends and PbR-based PPP management within a single conceptual framework.

We document that the nature of aggregate consumption dynamics changes when the bond‐stock correlation switches sign. We identify three regimes in a real‐time, sequential learning framework: two highly persistent regimes where permanent or transitory consumption shocks are more dominant, and a largely transitory disaster regime. We study the implications for asset prices. The transition from the second to the first regime in the late 1990s makes the correlation between equities and real bonds switch from positive to negative as in the data, providing an explanation from the perspective of real consumption dynamics. The findings extend to the international setting.

Using a novel data set of multi‐country credit registers and an institutional change from national to supranational supervision, we show that supranational banking supervision can increase credit supply while mitigating excessive risk‐taking. Supranational supervision increases credit supply only in financially stressed countries while reducing the credit supply to the riskiest (zombie) firms. These improved lending effects stem from weaker national institutions, differential national supervisory incentives, lower national supervisory abilities, and weaker national insolvency laws. Moreover, improved access to external finance from wholesale and bond markets as well as lower risk‐weighted assets allow supranationally supervised banks to expand the supply of credit. Overall, despite some supranational supervisory arbitrage, supranational supervision decreases firm‐level credit to the riskiest firms while increasing firm‐level credit availability in stressed countries without reducing it in nonstressed countries.

We study whether easier monitoring of personal finances affects consumer spending. We use transaction data from an account aggregation company to study consumers who installed the mobile app after using the same service on a personal computer for several months. We utilize the staggered release of the apps on different devices (iPhone, iPad, and Android) to identify a causal effect conditional on adoption of the mobile app. Consumers decrease their discretionary spending following the installation of the mobile app. The decrease is larger during evening hours and among individuals with lower proxies of self‐control, patterns consistent with a monitoring/self‐regulation channel and with benchmark models of costly self‐control.

Institutional investors are less likely to support shareholder proposals on environmental and social issues for firms headquartered in Republican‐led states. The decline in support has become more pronounced in recent years, aligning with politicians emphasizing companies’ social responsibility efforts, and among firms receiving state‐level subsidies and tax breaks. Investor support also varies with shifts in state leadership, dropping by 12 percentage points in the same state when Republicans are in control instead of Democrats. The findings indicate that institutional investors prioritize maximizing shareholder value and that politicians can influence investor votes by altering the value implications of shareholder proposals.

Person‐to‐person crowdfunding is an increasingly important form of disaster relief, yet its distribution is poorly understood. Linking GoFundMe campaigns from a major wildfire to property and household credit records, we find that higher‐income households are 12 pp more likely to have campaigns and raise over 25% more, holding property losses constant. These disparities reflect unequal access to social capital: broader donor bases, more nonlocal ties, greater advocacy by friends, and more generous donors. Donors appear influenced by social pressure in online crowdfunding. These mechanisms mirror national patterns and underscore crowdfunding's limitations as a tool for equitable disaster relief.

I develop a control function methodology robust to endogenous or mismeasured regressors in hazard models. Applying the estimator to the subprime mortgage crisis, I quantify what caused the foreclosure rate to triple across the 2003 to 2007 subprime cohorts. To identify the elasticity of default to housing prices, I use various home price instruments including historical variation in home price cyclicality. Loose credit played a significant role in the crisis, but much of the increase in defaults across cohorts was caused by price declines unrelated to lending standards, with a 10% price decline increasing subprime mortgage default rates by 50%.

The random assignment of judges promotes fairness and underpins causal identification across the social sciences. Analyzing Chapter 11 bankruptcies, we find sophisticated parties “judge‐shop”: relative to secured hedge fund creditors, cases involving unsecured hedge fund creditors and equity holders are assigned judges with lower past conversion rates and higher unsecured recovery rates. Experienced legal counsel similarly influences assignment. Because judges are not assigned consecutive large cases, knowledgeable parties can judge‐shop by timing the filing date. We develop a method to measure the resulting bias and demonstrate the need for controls and bounded instrumental variable specifications in judge/examiner designs.

We introduce a nonlinear covariance shrinkage method for building optimal portfolios. Our universal portfolio shrinkage approximator (UPSA) is built from closed-form basis portfolios, is cheap to implement, and improves on existing shrinkage methods. Rather than uniformly penalizing all principal components of returns or discarding low-variance ones, UPSA instead reweights components to explicitly optimize expected out-of-sample portfolio performance. In empirical applications using a large cross-section of anomaly factors, it delivers robust improvements over alternative shrinkage methods in the literature.

We highlight the role of duration and exchange rate risks on portfolio flows by using a unique and comprehensive database of U.S. investor flows into emerging market government bonds denominated in local currency. Borrowing long-term mitigates rollover risk but amplifies valuation changes that further interact with currency movements. Our analysis highlights the double-edged nature of long-term borrowing and draws attention to market stress dynamics due to strategic complementarities among mutual fund investors.

This paper shows that high market concentration in the U.S. manufactured home loan market allows lenders to charge markedly higher interest rates than in the mortgage market for site-built homes. Borrowers in counties with higher lender concentration face significantly higher rates, and evidence from bunching at a regulatory rate threshold, an instrumental variable analysis, and a difference-in-differences analysis suggests a causal link. Integrated lenders, which play an outsized role in this market, charge particularly high rates, and we provide evidence suggesting that these lenders exploit their market power over borrowers. We discuss factors that may explain limited lender entry.

In a dynamic setting, high-quality firms may tolerate current adverse selection when raising financing because they expect future opportunities to profitably acquire assets from failed lower-quality firms. But search frictions in asset trading impede efficiency, inviting government intervention. Anticipation of such intervention affects ex ante adverse selection and project investment because it reduces buyers’ ex post trading profits. Depending on parameter values, this anticipation can have either pernicious or salutary effects. The pernicious effect reduces participation by high-quality firms, worsens adverse selection, and depresses project investment, potentially triggering investment-enhancing government assistance (an “intervention trap”). The salutary effect mitigates adverse selection and increases project investment.

Many economic questions require estimating the price effect of demand shifts (multipliers) in the bond market. Corporate bonds have salient characteristics that distinguish between close and distant substitutes. We show that accounting for heterogeneous substitutability between bonds is critical for correctly estimating multipliers. We find that security-level multipliers are very small. In fact, an order of magnitude smaller than the estimate ignoring heterogeneous substitutability. Nonetheless, portfolio multipliers are substantially larger and monotonically increase with the aggregation level. Furthermore, we find that the multiplier is larger for high-yield bonds, longer-maturity bonds, and bonds with greater arbitrage risks.

We study a dynamic trade-off model where shareholders can freely adjust debt but lack commitment to future debt policies. A debt policy is time-consistent if shareholders prefer it to deviating and losing credibility ex post. We characterize the optimal time-consistent policy in a class. It includes a stable regime, where shareholders actively manage liabilities to maintain the target interest coverage ratio, and a distress regime triggered by large negative shocks, where shareholders temporarily abandon the target. This policy has realistic properties and bridges the gap between the static trade-off theory of debt and theory based on the leverage ratchet effect. (JEL G32, C73)

Using the Duke Survey data on firms’ internal plans, we show that over 80% of Chief Financial Officer (CFO) forecasts align closely with simple heuristics taught in MBA textbooks. We introduce forecast coherence—internal consistency across forecasts of jointly determined variables—as a benchmark for evaluating these heuristics. Nearly half of CFOs issue forecasts closely aligned with incoherent heuristics. Such forecasts are associated with predictable reversals in forecast errors, lower firm performance, and underinvestment. We develop a parsimonious model illustrating how reliance on restricted forecasting heuristics can generate incoherence and resource misallocation within firms, consistent with our evidence (JEL D84, D22, L2, M2, G32)

We examine how corporate financial constraints shape firms’ employment responses to minimum wage policies. Exploiting the federal minimum wage increase during the financial crisis and variation in firms’ debt maturity structures at the crisis onset, we find that financially constrained firms significantly reduce employment. To assess external validity, we analyze staggered state-level minimum wage increases over time. Consistent with the crisis evidence, employment declines in establishments of constrained firms, whereas unconstrained firms expand in areas with a larger supply of minimum-wage workers and higher turnover. Our results highlight the central role of financial constraints in mediating labor policy effects.

We examine how domestic product market competition shapes firms’ foreign market expansion. Using a panel of U.S. public firms from 1997 to 2017 and text-based measures of output offshoring, we show that stronger domestic competition increases foreign sales activity. To address endogeneity concerns, we exploit the competitive effects of policy-induced variation from staggered rejections of the Inevitable Disclosure Doctrine. Further tests indicate that these labor mobility shocks that intensify competitive pressure spur foreign expansion primarily among firms with stronger intangible and organizational capabilities and higher profitability. The findings suggest that domestic competition is an important driver of foreign market expansion.

We measure flow diversification in mutual funds using the cross-sectional correlation of daily flows across investor clienteles. Greater flow diversification is associated with lower future flow volatility, smaller subsequent outflows, and lower cash holdings. We decompose flow correlation into predictable and unexpected components. Unexpectedly low flow correlation is associated with higher post-outflow fund returns, mitigating outflow-induced externalities on incumbent shareholders. Flow diversification also dampens the higher flow-performance sensitivity of illiquid funds, partially offsetting strategic complementarities that can generate fragility.

We find that the effect of political connections on tax planning depends on firms’ financial conditions. After increased political connections, financially unconstrained firms increase tax planning and spending on tax services, as documented in prior studies, whereas constrained firms decrease tax planning and spending on tax services. Moreover, decreases in tax planning are only present for constrained firms that obtain new bank loans and public debt and when the connected politicians serve on banking-related committees. Our results suggest that by facilitating access to external financing, political connections reduce financially constrained firms’ use of tax planning as an internal financing tool.

We examine whether and how firms use connected social media outlets to counteract negative coverage in traditional media. Employing a sample of Chinese listed firms with ties to social media outlets, we find that connected outlets portray firms more favorably than unconnected ones. Following unfavorable coverage in traditional media, connected outlets shift attention toward long-term prospects and promote favorable narratives, consistent with an optimism-shifting mechanism. The effect is more pronounced when firms have stronger incentives to stabilize stock prices and when managers face heightened career concerns. Our findings highlight the role of connected social media outlets in shaping corporate narratives.

We examine the effect of private equity buyouts on the environmental performance of U.S. fossil fuel power plants. Output-scaled CO 2 emissions are, on average, 4.2% lower after buyouts, predominantly because of fuel-saving improvements in production efficiency. Emission intensities decline more significantly following buyouts backed by pro-ESG private equity because of not only greater efficiency gains but also enhanced emission control. Our results suggest that while private equity firms are effective at implementing environmentally beneficial operational changes that also increase profitability, they do not have strong incentives to undertake environmentally beneficial changes that are privately costly, except for those with pro-ESG preferences.

We study a large and unanticipated bank cleanup in India after prolonged zombie lending under regulatory forbearance. The cleanup forced widespread zombie exits through bankruptcy. In contrast to a frictionless world where entry automatically follows exit, we show that with financial frictions, local banking conditions shape creation after destruction. New firm entry occurs primarily in regions where banks are present, well-capitalized, competitive, and possess sectoral expertise. We further find a decline in the dispersion of total factor productivity in regions with stronger financial intermediation, consistent with a reduction in misallocation in such areas.

Using novel data from the GSE Credit Risk Transfer (CRT) market and the enactment of the 2020 CARES Act as a natural experiment, we study the ex-ante pricing of mortgage forbearance. We show that private investors demanded higher compensation for bearing mortgage credit risk following the introduction of federal mortgage forbearance. The increase in CRT spreads was larger for securities with greater exposure to judicial foreclosure regimes, lower expected house price growth, higher house price volatility, and riskier borrowers. These patterns suggest that investors priced heightened uncertainty regarding future collateral values and recovery outcomes. We find little evidence that the response was driven by broader financial market conditions, prepayment risk, servicer liquidity concerns, or strategic forbearance take-up. Our findings show how borrower-protection policies are transmitted to mortgage markets through the pricing of mortgage credit risk.

The rise in passively managed corporate debt funds has resulted in an increasingly inelastic demand for corporate debt. In this study, we quantify how passive debt ownership affects firms’ financial policy. Using fund-specific flows to capture firm-level changes in passive debt ownership that are exogenous to firm fundamentals, we find that firms respond to higher levels of passive debt ownership by increasing leverage. The borrower-friendly terms provided by passive debtholders could also theoretically lead to several potential changes in investment or payout policy. We show that passive debt holding does not affect investment policy. Instead, higher passive ownership predicts increased dividend payouts—even for firms far from index thresholds—exacerbating shareholder-debtholder conflicts. Passive debtholders enable these effects by reducing aggregate ex-ante and ex-post monitoring. The presence of a bank monitor moderates the relationship between passive debt ownership and increased payout, reinforcing the importance of this monitoring channel.

This study analyzes the wide dispersion in bid-ask spreads across clients in over-the-counter (OTC) markets. Our data detailed data comprise a dealing bank's complete trading record in a major OTC contract and include client IDs, seven client types, and precise markups. Average spreads are lowest for hedge funds (<1 basis point, bp) and highest for individuals and for small and medium enterprises (>50 bps). Regression results suggest that the primary source of variation is clients’ execution efficiency, meaning their ability to minimize execution costs. Efficient trading, which can require investments in knowledge and technology, has three dimensions: reliance on low-cost platforms; familiarity with market technologies, conventions, and negotiating strategies; and breadth of dealing relationships. Relations between proxies for client execution efficiency and client incentives to invest, such as trade frequency, are consistent with rational inattention.

Rapid growth of stablecoins has raised concerns about issuer default and spillover risks. To assess these risks, we model a stablecoin issuer facing persistent demand shocks. Absent regulation, the issuer holds little capital and favours interest-bearing but illiquid bonds over cash. This exposes coin-holders to default risk and poses spillovers via bond fire-sales. How can regulation mitigate these risks? Capital and liquidity thresholds can help, especially when introduced as usable buffers. The thresholds can be breached, providing flexibility. However, breaches trigger additional redemptions that discipline the issuer. The thresholds operate through asymmetric channels: the liquidity threshold raises only cash, whereas the capital threshold increases both capital and cash. Both thresholds mitigate default and spillover risks, making them substitutes when either risk is targeted separately but complements when both risks are targeted jointly. We provide a two-way mapping that helps derive capital-liquidity threshold combinations implied by chosen risk targets (and vice-versa).

We study the interaction of expansionary rate-based monetary policy and quantitative easing, despite their concurrent implementation, by exploiting heterogeneous banks and the introduction of negative monetary-policy rates in a fragmented euro area. Quantitative easing increases credit supply less when banks’ funding costs do not decrease simultaneously. Using administrative data from Germany, we uncover that among banks selling their securities, central-bank reserves remain disproportionately with high-deposit banks that are constrained due to sticky customer deposits at the zero lower bound. Affected German banks lend relatively less to firms while increasing their interbank exposure in the euro area.

Startups face a trade-off between short-term profitability and long-term growth. Their cash flows are said to follow a so-called J-curve. The shape of the curve depends on investors’ financing capacity: their ability to sustain prolonged periods of negative cash flow. US venture capitalists are often believed to have greater financing capacity. We examine a large Swedish dataset with detailed cash flow information. Swedish startups backed by US venture capitalists experience deeper J-curves, with larger short-term losses and higher long-term sales, relative to those backed by non-US venture capitalists. These results are consistent with US venture capitalists having greater financing capacity: they can provide more funding directly and have better access to later-stage investors.

In credit markets where borrower types are observable, is it welfare-maximizing for a rate-setting institution to offer different rates to different borrower types, or to pool them at a common rate? Moral hazard favours separation; deadweight default costs favour pooling, since compressing rates reduces aggregate defaults through hazard rate heterogeneity. We derive the condition determining which force dominates: the ratio of default cost intensity to moral hazard intensity. We show that there is a single threshold value of this ratio such that separation strictly dominates below it, complete pooling strictly dominates above it, and the two are welfare-equivalent exactly at it, for every possible value of the ratio. The result does not depend on information being scarce: even though borrower types are observable throughout, pooling can still dominate separation when default costs are sufficiently large, provided the maintained compression and effort conditions we state precisely continue to hold; we conjecture, but do not formally establish, that the same logic extends to imperfect information if the threshold, recomputed for that weaker information structure, continues to be exceeded. The welfare criterion is utilitarian surplus; the efficiency claim is surplus maximisation, not Pareto improvement.