Integrated reporting and earnings quality : The moderating effect of agency costs
Journal article
Obeng, Victoria A., Ahmed, Kamran and Miglani, Seema. (2020). Integrated reporting and earnings quality : The moderating effect of agency costs. Pacific-Basin Finance Journal. 60, p. Article 101285. https://doi.org/10.1016/j.pacfin.2020.101285
Authors | Obeng, Victoria A., Ahmed, Kamran and Miglani, Seema |
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Abstract | Prior studies have suggested a link between disclosure mechanisms and accounting information quality. They also report better quality information in the presence of higher transparency and clarity in disclosure mechanisms. We contend that voluntary integrated reporting (IR) as a disclosure mechanism has an incremental positive effect on accounting information and particularly the quality of reported earnings. Consistent with this argument, we find a positive relationship between voluntary adoption of IR practice and earnings quality. Furthermore, while voluntary adoption of IR is positively associated with earnings quality for firms experiencing high agency costs, the moderating effect of firm level agency costs have an insignificant effect on the relationship between voluntary IR practice and the level of integration. We find no evidence consistent with the proposition that managerial opportunism is relevant in shaping the effectiveness of IR practice for quality disclosure when a higher level of integration is achieved. Moreover, we find no evidence that firm complexity affects the relationship between IR practice and earnings quality. Overall, our findings are consistent with the view that IR wields an incremental positive effect on the quality of accounting information. |
Keywords | integrated reporting; earnings quality; agency costs; firm complexity |
Year | 2020 |
Journal | Pacific-Basin Finance Journal |
Journal citation | 60, p. Article 101285 |
Publisher | Elsevier B.V. |
ISSN | 0927-538X |
Digital Object Identifier (DOI) | https://doi.org/10.1016/j.pacfin.2020.101285 |
Scopus EID | 2-s2.0-85079121040 |
Page range | 1-21 |
Publisher's version | License All rights reserved File Access Level Controlled |
Output status | Published |
Publication dates | |
Online | 04 Feb 2020 |
Publication process dates | |
Accepted | 03 Feb 2020 |
Deposited | 16 Jun 2023 |
https://acuresearchbank.acu.edu.au/item/8z243/integrated-reporting-and-earnings-quality-the-moderating-effect-of-agency-costs
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