Accounting - Research Publications
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ItemUpgrading the genome of an elite japonica rice variety Kongyu 131 for lodging resistance improvement(WILEY, 2022-12-29)Developing a new rice variety requires tremendous efforts and years of input. To improve the defect traits of the excellent varieties becomes more cost and time efficient than breeding a completely new variety. Kongyu 131 is a high-performing japonica variety with early maturity, high yield, wide adaptability and cold resistance, but the poor-lodging resistance hinders the industrial production of Kongyu 131 in the Northeastern China. In this study, we attempted to improve the lodging resistance of Kongyu 131 from perspectives of both gene and trait. On the one hand, by QTL analysis and fine mapping we discovered the candidate gene loci. The following CRISPR/Cas9 and transgenic complementation study confirmed that Sd1 dominated the lodging resistance and favourable allele was mined for precise introduction and improvement. On the other hand, the Sd1 allelic variant was identified in Kongyu 131 by sequence alignment, then introduced another excellent allelic variation by backcrossing. Then, the two new resulting Kongyu 131 went through the field evaluation under different environments, planting densities and nitrogen fertilizer conditions. The results showed that the plant height of upgraded Kongyu 131 was 17%-26% lower than Kongyu 131 without penalty in yield. This study demonstrated a precise and targeted way to update the rice genome and upgrade the elite rice varieties by improving only a few gene defects from the perspective of breeding.
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ItemNo Preview AvailableProfessional financial statement users' perceived value of carbon accounting disclosures and decision context(EMERALD GROUP PUBLISHING LTD, 2023-07-10)Purpose This study aims to investigate how professional financial statement users use carbon accounting information in their decisions and whether this use is sensitive to changing the decision context from an investment to a donation. Design/methodology/approach Using a sample of 173 US professional financial statement users, the authors conduct an experiment that manipulates an investment or donation choice to evaluate how differing levels of carbon sequestration affect decision-making across contexts. Findings Carbon sequestration information affects users’ donation decisions but does not affect investment decisions. Variation in the reliability of the information and whether the information is linked to strategy do not affect users’ decision-making. Research limitations/implications This study is performed by an experiment and informs our understanding of the relevance to users of carbon sequestration disclosure. Results indicate that carbon sequestration disclosure has value for donation but not investment decisions. The authors interpret this as evidence of some value of this type of disclosure in professional financial statement users’ decision-making but not for a financially focused evaluation. Originality/value This paper provides unique insights into the effect of reporting carbon sequestration on decision-making. There has been significant research on the broader topic of corporate sustainability, and capital markets research indicates that the market values increased sustainability disclosure. This study extends the research by examining a specific component of carbon disclosure that is not currently widely reported and by the use of information for different types of evaluations. The results find evidence that the value of this type of carbon disclosure does not stem from a purely financial perspective but instead, from other nonpecuniary factors.
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ItemDoes a Liability of Foreignness in Liquidity Apply to US IPOs?(Taylor & Francis, 2022-11-30)We provide evidence regarding two unanswered and consequential questions regarding share trading liquidity, a primary motive for US listings, for the prominent listing cohort of foreign-firm US initial public offerings (FIPOs). First, we test whether FIPOs exhibit a ‘liability of foreignness (Bell et al. 2012) in liquidity’ (LFL) compared with matched domestic-firm IPOs (DIPOs), despite listing requirements that are more stringent than for the mature cross-listed foreign firms studied previously. Second, we test whether US IPO LFL is moderated by FIPO home country institutional attributes that promote liquidity. Our findings for 327 FIPOs from 36 countries between 1990 and 2012 reveal that US IPO LFL is moderated, but not eliminated, by FIPO home country attributes, thus indicating incomplete bonding with US institutions. These findings extend prior research and serve to inform foreign firms considering US IPOs, exchanges competing for them, listing facilitators, regulators, and investors regarding a salient listing consideration.
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ItemVoluntary versus mandatory disclosure of liability insurance coverage limit(Elsevier BV, 2022-11)This article analyzes the disclosure of the liability insurance coverage limit and the impact of mandating disclosure of the coverage limit in a setting where voluntary disclosure of a firm’s cash flow information is subject to litigation risk and the firm has directors’ and officers’ (D&O) liability insurance. Disclosure of cash flow information is costly, but disclosure of the insurance coverage limit features no direct disclosure friction. We find that, when the litigation environment is weak, the usual unraveling argument applies, and the manager always voluntarily discloses the coverage limit in equilibrium. However, when the litigation environment is strong, either no coverage limit is disclosed or only sufficiently high coverage limits are disclosed in equilibrium. Further analysis shows that mandatory disclosure of the coverage limit increases the voluntary disclosure of cash flow information.
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ItemGoing Concern Uncertainty: What Do Firms Disclose?(WILEY, 2022-09)Abstract We examine disclosure of going concern uncertainties by Australian companies. We begin by outlining the extant reporting framework applicable from accounting and auditing standards, and compare the approach to this issue taken across several different countries – Australia, New Zealand, the United Kingdom and the United States. We then examine reporting of going concern uncertainties for a selection of 127 Australian companies reporting at 30 June 2020 that also receive modified audit reports highlighting going concern issues. Our results indicate substantial variation in the specific requirements of audit and accounting standards impacting going concern disclosure across jurisdictions, with relevant disclosure guidance for Australian entities primarily contained in auditing, rather than accounting, standards. Not surprisingly then, we also observe significant variation in management reporting practices. These results inform our understanding of existing disclosure requirements and highlight how regulatory reliance on auditor discussion of going concern issues likely results in relatively limited management disclosure. We suggest that additional guidance may be required from accounting standard setters and also regulators with respect to management discussion of going concern uncertainty.
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ItemAltruism, social norms, and incentive contract design(SPRINGER, 2023-06)Abstract We study theoretically and empirically the relation between altruism and incentive contract design. Theoretically, we extend Fischer and Huddart (2008) to investigate how social norms reinforce managers’ altruistic preferences, thus affecting the optimal contract design related to incentive strength and performance measurement. Empirically, we draw on the notion of an organization’s work climate to capture managers’ altruistic preferences. Using data collected from a sample of 557 managers, we find that in a work climate where managers are mostly out for themselves, firms have lower pay-for-performance sensitivity and place a greater weight on aggregate performance measures. In addition, respondents report that they engage more in undesirable actions that are unproductive and costly to firm owners. In contrast, in a work climate where managers care about others (including peers in their organizational unit), firms place lower weights on aggregate performance measures. At the same time, respondents report that they supply more effort and engage less in undesirable actions.
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ItemShareholder Short-Termism, Corporate Control and Voluntary Disclosure(INFORMS, 2022-03-31)This paper examines how a manager uses voluntary disclosure to influence corporate control by a short-term shareholder. Because a short-term shareholder intervenes excessively, the manager’s disclosure strategy is determined by the trade-off between excessive and insufficient intervention. In equilibrium, when shareholder short-termism is not too high, the manager discloses both good and bad news and withholds intermediate news. Alternatively, when shareholder short-termism is high, the manager only discloses good news and withholds bad news. In both equilibria, withholding information is value-enhancing for the nondisclosing firms. We also show that the likelihood of disclosure weakly decreases as the shareholder is more short-term-oriented. Moreover, nondisclosing firms are more likely to face shareholder intervention than disclosing firms. This paper was accepted by Brian Bushee, accounting. Supplemental Material: The online appendix is available at https://doi.org/10.1287/mnsc.2022.4357 .
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ItemCEO talent: A dime a dozen, or worth its weight in gold?(Wiley, 2018-06-01)Very little sophisticated research exists on the size, quality, and efficiency of the labor market for CEO talent. This paper sheds light on this labor market by considering the perspectives of directors directly responsible for hiring and firing the CEOs of the largest publicly traded corporations in the United States. We find that directors overwhelmingly believe that the CEO job is exceptionally challenging and only a handful of executives are qualified to run their company and others in their industry. This suggests that the labor market for outstanding CEO talent is significantly tighter and more competitive than governance experts might realize.
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ItemThe effect of inspections, rotations and client preferences on staffing decisions(Wiley, 2019-12-01)With increased regulatory focus on audits and concerns about whether audit regulation is achieving its stated aims, it is timely to investigate how regulator inspection of audit files and partner rotations may be affecting staffing decisions. This is an important issue, which affects all audits, as the calibre of staff allocated across engagements impacts the quality of audit work delivered. This study reports the results of an experiment where auditor participants allocate staff across two audits, where regulation anticipated (none, inspection, rotation) and a client request for the best staff (absent, present) are manipulated between-subjects. We find that auditors allocate lower calibre staff when neither an inspection nor rotation is anticipated than when either is anticipated. When an inspection is anticipated, auditors allocate staff with more knowledge and compliance skills. When a rotation is anticipated, auditors allocate staff with more people skills. A client request for the best staff only has an effect when a partner is due to be rotated, where auditors allocate staff with more people skills in response to the client request. Our findings provide greater understanding of staffing decisions, which may affect audit quality if concerns around audit inspections and partner rotations are perceived by auditors as more important than the underlying risk or complexity of an engagement when allocating staff.
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ItemLinguistic Complexity in Firm Disclosures: Obfuscation or Information?(WILEY, 2018-03-01)