If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. AbstractPurpose -This study aims to examine auditor reporting behaviour in the presence of aggressive earnings management (EM) in the context of the Asian Economic Crisis as it affected Malaysia. In the vein of Bartov, Gul and Tsui, the interaction between discretionary or abnormal accruals and audit quality (AQ), as indicated by auditor size and auditor industry specialisation, is examined. Design/methodology/approach -A logistic regression model adapted from various prior studies is utilised to test the hypotheses. Findings -As per earlier findings using Western data, Big 5 auditors in Malaysia appear to qualify more frequently than their non-Big 5 counterparts when high levels of abnormal accruals are present. However, the interaction between auditor industry specialisation and abnormal accruals is not significant in predicting the incidence of qualification. Originality/value -This study extends the current literature on AQ differentiation and specifically it attempts to address the gaps in the literature with respect to auditor reporting behaviour in the presence of aggressive EM. In addition, this study provides additional evidence on Big 5/industry specialist quality differentiation in an emerging market (an under-researched area), Malaysia, arguably with less transparent and weaker governance structures than the developed economies such as the USA, UK, and Australia.

Purpose This study aims to examine the relationship among corporate risk disclosure, cost of equity capital and performance within banking institutions in a developing country setting. The authors argue that corporate risk disclosure reduces the cost of capital as investors attain better information and have confidence in the business and that less risk disclosure may generate ambiguity for potential stakeholders. Design/methodology/approach This study uses the population of all 30 listed banks on the Dhaka Stock Exchange, Bangladesh, for the years 2006 to 2012 and uses three-stage least-squares simultaneous equations to deal with endogeneity issues. Findings There is evidence that Bangladesh has voluntarily adopted the International Financial Reporting Standard 7 – Financial Instruments: Disclosures (IFRS 7) and Basel II: Market Discipline and that these standards enhance risk disclosure even where compliance is not compulsory. The cost of capital is found to be negatively associated with risk disclosure, which has an inverse relationship with bank performance. Originality/value This study provides a link between risk disclosure, cost of capital and performance. It fills a gap in the literature by providing a longitudinal study of risk disclosure in the banking sector of Bangladesh. This research also highlights the importance of appropriate risk disclosure for banks and suggests its importance in the process of fulfilling stakeholders’ demands.

Purpose The purpose of this paper is to investigate the extent of risk disclosure and the factors determining this for all listed banks in Bangladesh. Design/methodology/approach Relying on a theoretical framework based on agency theory and the creation of a risk disclosure index (RDI) based on International Financial Reporting Standard (IFRS) 7, Basel II: market discipline, and prior literature, hand-collected data from the annual reports of all 30 banks traded on the Dhaka Stock Exchange over 2007-2012, creating 180 bank-year observations, are analysed. Findings The study suggests that implementation of IFRS 7 and Basel II: market discipline standards in a non-mandated environment raised the extent of risk disclosure in every category of financial institution risk (market, credit, liquidity, operational and equities). The effect can be attributed to regulatory concerns and voluntary adoption of international disclosure standards in the banking industry in Bangladesh. Specifically, whilst the determinants of disclosure vary across types of risk, the number of risk committees, leverage, company size, the existence of a risk management unit, board size and a Big4 affiliate auditor are significant determinants of at least one category of risk disclosure. Research limitations/implications The source of risk disclosures is limited to listed banks’ annual reports. Practical implications The RDI, developed in this paper, contributes to the literature by: first, quantifying the extent of each of five types of risk disclosure; and second, identifying the factors determining them. Stakeholders, particularly depositors and investors, can use this index to select or monitor their bank of interest. Originality/value The RDI was developed according to the most relevant standards – IFRS 7 and Basel II: market discipline, plus prior scholarly literature. This type of benchmarking has not been conducted to date in previous studies. Inferences about risk disclosure are based on archival data derived from all listed banks in a virtually unregulated environment. Further, the study complements the literature by providing support for the applicability of agency theory in investigating the level of risk disclosure by banks.

Purpose -This paper seeks to focus on the issue of materiality judgements and the need for public disclosure of materiality levels. Insights about the concept of materiality are drawn from the words of users of audited financial reports, auditee managements, suppliers to the market for audit services and auditing standard setters and regulators. Design/methodology/approach -This paper reports findings arising from face-to-face office interviews with individuals representing identified groups of stakeholders in the market for audit services about the issue of "materiality" as this concept is applied in auditing. The interviews canvassed many issues related to audit as part of a larger project entitled "The future of audit". Findings -In general, stakeholders perceive that the concepts involved in audit materiality are not well understood and they point to the difficulty in providing educative materiality about it, especially in relation to qualitative materiality, to retail investors in particular. There are mixed views as to whether the actual level of tolerable error, as per one of the meanings of materiality in the audit space, should be disclosed, with some feeling that it might be detrimental or dangerous. Practical implications -If incremental information about materiality is to be disclosed, the issue of where, what to whom, by whom and when arise. Various suggestions are made by stakeholders in respect of these questions. Originality/value -The paper concludes by drawing from the insights gained by the authors through the comments of participant stakeholders to make recommendations that deal with the issue of audit materiality.

This study examines the issue of greenwashing among corporate high emitters subject to government scrutiny. To do so, we investigate the relationship between the actual environmental performance, measured as carbon emissions, of companies subject to the Australian National Greenhouse Energy Reporting Act 2007 (NGER) and their climate-related voluntary disclosures. To measure climate-related disclosure, we construct a climate-related disclosure index based on four prominent frameworks and score corporate report content against that Index. Using a sample of 150 companies with NGER emissions data for Years 2016 and 2017, a period that precedes the issuance of recommendations for disclosure by the Task Force on Climate-Related Financial Disclosure (TCFD), our regression results show a disappointingly low level of climate-related disclosure by most companies. We also find a negative relationship between climate-related disclosure and 1-year lagged environmental performance among companies exhibiting a year-on-year rise in carbon emissions. That is, our findings provide evidence of potential greenwashing by poor environmental performers, presumably to change negative perceptions by stakeholders, as predicted by socio-political theories. In contrast, we find no evidence of greenwashing among companies experiencing a year-on-year decrease in emissions.