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on Accounting and Auditing |
| By: | Pope, Peter; Young, Steven |
| Abstract: | We consider regulations that shape directors’ reporting responsibilities and reflect on the association between disorderly corporate failures and low quality accounting, reporting and auditing. To this end we summarise work exploring the statutory role of directors; evidence on corporate failures and the co-occurrence of financial reporting misconduct; and research on the link between governance mechanisms and reporting quality. We also highlight lessons from the Sarbanes-Oxley Act of 2002 and review U.K. Government proposals for reform issued in 2021 in light of these lessons. Collectively, these analyses reveal five themes to consider when establishing directors’ responsibilities to uphold financial reporting quality: accounting misconduct is often a symptom rather than a cause of failure;the dangers of making accounting a scapegoat for broader governance failings; how proportionality is normally framed by the costs of regulation but not the expected benefits;the virtue of a humble approach to regulation that normalises learning, correction, and revision; and the regulatory implications of the increasing use of technology in the reporting process |
| JEL: | M40 |
| Date: | 2026–10–20 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:141476 |
| By: | Fei, Chang Chee; Yee, Ng May |
| Abstract: | This article examines the comprehensive legal framework governing company auditors in Malaysia under the Companies Act 2016. It analyses the approval and qualification requirements for auditors, the distinct appointment rules applicable to private and public companies, and the mechanisms for determining auditor remuneration and disclosing nonaudit services. The article further explores the statutory reporting duties of auditors, including the obligation to provide qualified audit reports where financial statements deviate from approved accounting standards. It considers the privileges and rights conferred upon auditors to facilitate the diligent discharge of their duties, including qualified privilege against defamation claims and rights of access to company records. Additionally, the article addresses auditors' obligations to debenture holders and their mandatory attendance at annual general meetings. Finally, it examines the statutory procedures governing resignation and removal of auditors before the expiration of their term, highlighting the safeguards designed to protect auditor independence and ensure corporate accountability. |
| Date: | 2026–10–15 |
| URL: | https://d.repec.org/n?u=RePEc:osf:lawarc:fxyuc_v1 |
| By: | Soraya Hajar El Maaroufi (Université Ibn Zohr = Ibn Zohr University [Agadir]); Si Mohamed Bouaziz (Université Ibn Zohr = Ibn Zohr University [Agadir]); Zouhair Eddekkar (ENSAK - Ecole Nationale des Sciences Appliquées de Kénitra = National School of Applied Sciences [Kénitra] - UIT - Université Ibn Tofaïl); Fatima EL GAREH (Université Ibn Zohr = Ibn Zohr University [Agadir]) |
| Abstract: | Internal audit effectiveness is a major governance mechanism for strengthening financial risk management. However, the literature remains fragmented, as prior studies often examine internal control, governance, fraud, financial reporting quality, or audit technologies separately, without providing an integrated synthesis of their interactions. This study addresses this gap through a systematic literature review based on the PRISMA protocol. Searches conducted in Scopus and Web of Science for the 2015-2026 period resulted in a final corpus of 45 articles, including 25 from Scopus and 20 from Web of Science. The descriptive analysis reveals a strong predominance of quantitative empirical research, accounting for 42 articles, or 93.3% of the corpus, compared with two qualitative theoretical studies (4.4%) and one methodological modeling study (2.2%). The thematic coding identifies four dominant areas: governance, audit committees, and risk committees (16 articles; 35.6%); internal audit, internal control, risk management, and fraud (13; 28.9%); reporting quality and audit outcomes (11; 24.4%); and technology, cybersecurity, innovation, and sustainability (5; 11.1%). The findings confirm an overall positive contribution of internal audit to financial risk management, while showing that its effectiveness depends on governance quality, auditors' competencies, organizational maturity, and institutional context. This review therefore provides a structured overview of the field and identifies several avenues for future research. |
| Abstract: | L'efficacité de l'audit interne constitue un levier majeur de gouvernance et de maîtrise des risques financiers. Toutefois, la littérature demeure fragmentée, les travaux antérieurs examinant souvent séparément le contrôle interne, la gouvernance, la fraude, la qualité de l'information financière ou les technologies d'audit, sans proposer une synthèse intégrée de leurs interactions. Cette étude vise à combler cette lacune au moyen d'une revue systématique de la littérature fondée sur le protocole PRISMA. Les recherches menées dans Scopus et Web of Science sur la période 2015–2026 ont conduit à un corpus final de 45 articles, dont 25 issus de Scopus et 20 de Web of Science. L'analyse descriptive montre une nette prédominance des recherches empiriques quantitatives, qui représentent 42 articles, soit 93, 3 % du corpus, contre deux études théoriques qualitatives (4, 4 %) et une étude méthodologique fondée sur la modélisation (2, 2 %). Le codage thématique met en évidence quatre axes dominants : gouvernance, comités d'audit et de risque (16 articles ; 35, 6 %) ; audit interne, contrôle interne, gestion des risques et fraude (13 ; 28, 9 %) ; qualité du reporting et résultats d'audit (11 ; 24, 4 %) ; technologies, cybersécurité, innovation et durabilité (5 ; 11, 1 %). Les résultats confirment une contribution globalement positive de l'audit interne à la maîtrise des risques financiers, mais montrent que son efficacité dépend de la qualité de la gouvernance, des compétences des auditeurs, de la maturité organisationnelle et du contexte institutionnel. Cette revue propose ainsi une lecture structurée du champ et identifie plusieurs pistes de recherche futures. |
| Keywords: | systematic literature review, Internal audit, internal audit effectiveness, financial risk management, internal control, PRISMA, corporate governance, gouvernance d’entreprise, revue systématique de la littérature, contrôle interne, gestion des risques financiers, efficacité de l’audit interne, Audit interne |
| Date: | 2026–08–25 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05736312 |
| By: | Pettinicchio, Angela; Pope, Peter F.; Scimeca, Alessandra |
| Abstract: | Disclosure rules in many countries require public companies to report fees paid to the principal audit firm and its affiliates, but not to unaffiliated component auditors (UCAs). Reported fees thus depend on component auditor affiliation. We show that UCA involvement is significant in many countries. Using Italian private companies’ public filings, we find that UCA involvement is a statistically and economically significant source of bias in audit fee models. This bias is particularly relevant around principal auditor changes, when some subsidiaries temporarily retain UCAs before switching to auditors affiliated with the new principal auditor. The exclusion of fees paid to temporary UCAs explains the initial-year audit fee discount (lowballing) previously documented, which disappears once these omitted fees are accounted for. Our results suggest that lowballing reflects measurement bias rather than systematic strategic pricing. Because UCAs are common internationally and disclosure rules similarly exclude these fees, this bias extends beyond Italy. |
| Keywords: | auditing;audit fees;audit pricing;initial fee discount;component audits;lowballing;unaffiliated component auditors |
| JEL: | M42 |
| Date: | 2026–10–21 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:141487 |
| By: | Koski, Heli; Kässi, Otto; Markkanen, Jaakko |
| Abstract: | Abstract We use firm-level data from five European countries to examine what a accounting-based measure of intangible capital reveals about its relationship with productivity. Outside France, most firms have zero intangible capital under this measure, and differences across countries may partly reflect accounting practices which dictate when intangibles can be capitalized. We find a modest positive association between intangible capital and productivity across firms, but the association largely disappears when we examine changes within firms over time, except in France. The observed association therefore does not, on its own, show how investing more in intangible capital would affect productivity. Zero stock of intangible capital does not necessarily mean that firms do not invest in intangibles. Firms undertake a substantial share of intangible investment in-house, for example in R&D and in developing software, brands and data. These costs are typically expensed, so intangible assets on balance sheets give only a partial picture of firms’ intangible capital. To support decisions and comparisons concerning intangible investment, financial statement-based measures should be complemented by measures that also capture intangible capital produced in-house. Such measures have already been constructed using administrative register data. |
| Keywords: | Intangible capital, Financial statements, Measurement, Productivity, Firm-level data |
| JEL: | D24 E22 M41 O34 |
| Date: | 2026–10–29 |
| URL: | https://d.repec.org/n?u=RePEc:rif:wpaper:152 |
| By: | Brounstein, Jakob; Bachas, Pierre; Bajaña, Alex |
| Abstract: | Tax havens weaken tax enforcement by obscuring firm ownership and facilitating offshore evasion. This paper studies a reform in Ecuador that imposed a corporate tax surcharge on firms with owners in tax havens, using a newly available ownership registry. Comparing haven-owned firms to other foreign-owned firms, the analysis finds that the reform reduced haven ownership by 12 percentage points, largely through disclosure of non-haven individual owners. Exposed firms reduced transactions with tax havens and increased corporate tax payments, with no detectable effects on investment or firm size. The results suggest that ownership transparency can meaningfully improve tax compliance at limited efficiency cost, even through unilateral action. |
| Date: | 2026–10–30 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:11493 |
| By: | Bai, Jinling |
| Abstract: | Mandatory environmental disclosure has become a central regulatory instrument for improving corporate transparency, yet its consequences for the structure rather than the cost of corporate financing remain insufficiently understood. Because debt maturity mismatch is a persistent structural impediment to long-term investment in bank-dominated economies, clarifying how disclosure mandates reshape the term structure of corporate debt matters for firms, creditors, and regulators alike. This study uses the 2010 Guidelines for Environmental Information Disclosure by Listed Companies as a quasi-natural experiment and employs a difference-in-differences approach to identify the causal effect of mandatory environmental disclosure on corporate debt maturity. Based on panel data for A-share listed companies in China from 2007 to 2019, the results show that mandatory disclosure significantly shortens debt maturity through a risk revelation mechanism (H1 supported). Pre-policy voluntary disclosure quality acts as a substantial moderator: high-quality prior disclosure attenuates the maturity-shortening effect by approximately 48% (H2 supported). Subgroup analysis by bank dependence reveals the simultaneous operation of supply-side creditor tightening and demand-side managerial adjustment. Mechanism tests show that mandatory disclosure brings previously unobservable environmental compliance costs and liabilities into the public domain, prompting creditors to reassess and reprice environmental risk, thereby reducing debt maturity. Heterogeneity analyses indicate that the effect is concentrated among non-state-owned enterprises and firms in regions with stronger environmental governance. This study contributes to the literature on the financial consequences of mandatory disclosure by extending its scope beyond financing cost to financing structure. |
| Keywords: | debt maturity structure;difference-in-differences;mandatory environmental disclosure;risk revelation;signaling theory |
| JEL: | F3 G3 L81 |
| Date: | 2026–12–31 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:141434 |
| By: | Pajarinen, Mika; Rouvinen, Petri |
| Abstract: | Abstract This report examines the links between firms’ intangible investments and financing constraints using four complementary surveys: the Finnish SME Barometer (autumn 2018 – spring 2026), the Finnish Industry Investment’s (Tesi’s) Growth Company Pulse (2024–2025), the ECB’s SAFE survey (2015–2025), and the EIB Investment Survey, EIBIS (2016–2025). Analyses across the four surveys yield the same basic result: firms investing in intangibles – especially in R&D and innovative activity – are more likely than other firms to face financing constraints. In the Finnish data, financing constraints have become more common since 2022. International comparisons show that the earlier edge of firms operating in Finland in access to finance relative to other EU countries has narrowed, and relative to Sweden the position has turned unfavourable – most markedly for firms investing in intangibles and engaged in innovative activity. The results are consistent with the finding in literature that intangible capital serves poorly as collateral and is therefore particularly exposed to financial market frictions. From the perspective of economic renewal, the financial system should be developed in a direction that better supports intangibles-based growth. |
| Keywords: | Intangible investment, Financing constraint, Research and development, Innovation, Firm |
| JEL: | D22 E22 G32 O31 |
| Date: | 2026–10–30 |
| URL: | https://d.repec.org/n?u=RePEc:rif:wpaper:153 |