The bidirectional relationship between corporate social responsibility and financial reporting quality: Does gender diversity matter? Evidence from US companies

Toukabri, Mohamed; Kateb, Inès

doi:10.1002/jcaf.22603

Cited by 15 publications

(13 citation statements)

References 127 publications

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“…However, to address heteroscedasticity issues and account for firm performance, Kothari et al (2005) extended the modified-Jones model to a performance-adjusted Jones (1991) model. In line with previous studies such as Toukabri and Kateb (2023), we utilize the performance-adjusted Jones (1991) model proposed by Kothari et al (2005) to estimate the discretionary accruals (DACC). To start, we calculate the total accruals (TACC) using the approach developed by Becker et al (1998) in Equation ( 1):…”

Section: The Dependent Variable: Earnings Managementmentioning

confidence: 99%

The bridge to quality financial reporting: Audit committees’ mediating role in IFRS implementation for emerging markets

Kateb

2023

J Corp Accounting Finance

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This study aims to examine the impact of International Financial Reporting Standards (IFRS) adoption on financial reporting quality in Saudi Arabia, with a specific focus on the mediating role of effective audit committees (ACs) and the specific characteristics of ACs that have a negative correlation with earnings management (EM) practices. The research collected financial data from 92 listed firms spanning the period from 2012 to 2020 encompassing both the years before and after the IFRS adoption in 2017. . The study used regression and rigorous mediation analysis based on the Baron and Kenny (1986) approach to investigate the relationship between IFRS adoption, ACs, and EM. The findings indicate that IFRS adoption has a negative and significant impact on EM practices. Additionally, the study found that AC expertise is positively influenced by the IFRS adoption, while the AC size has a positive correlation with EM levels. The study further revealed that AC expertise has a negative correlation with EM levels and fully mediates the relationship between IFRS adoption and EM. The research's findings carry significant practical implications for a range of stakeholders. Regulators and policymakers in Saudi Arabia should consider the positive impact of IFRS adoption on financial reporting transparency and accountability when evaluating their regulatory framework. Firms can strengthen their corporate governance practices by focusing on the recruitment and training of AC members with robust financial and accounting backgrounds. This emphasis on AC quality, rather than size, is crucial to mitigating EM practices and enhancing the effectiveness of IFRS implementation. Lastly, investors and analysts can utilize these findings to assess the reliability of financial statements and identify firms with robust governance structures. Furthermore, the study contributes to the discourse on financial reporting and governance dynamics in emerging markets, offering insights for future research and policy discussions.

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Section: The Dependent Variable: Earnings Managementmentioning

confidence: 99%

The bridge to quality financial reporting: Audit committees’ mediating role in IFRS implementation for emerging markets

Kateb

2023

J Corp Accounting Finance

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“…Thus, the engagement in social responsibility activities is a result of the various characteristics of the board of directors which conceive synergies with the organizational result of the company. In the same line of ideas, Toukabri and Kateb (2022) show that board diversity and cognitive conflicts of ideas improve the quality of decision-making in organizations. With respect to resource-based theory, administrators would themselves be viewed as resources for the organization.…”

Section: Literature Review and Hypothesesmentioning

confidence: 95%

“…Post et al (2015) finds a positive relationship between the presence of female directors and sustainable development practices, which positively contribute to environmental performance. Toukabri and Kateb (2022) examine a sample of American companies and find SBR 18,4 a positive relationship between the presence of women directors on the board and sustainability actions. Indeed, these findings are confirmed by the research of Li et al (2018), whose results show a positive effect of gender diversity in advice and CP.…”

Section: Corporate Carbon Performancementioning

confidence: 99%

“…Post et al (2011), Hafsi and Turgut (2013) show that board diversity affects the social and environmental aspects of the company. The study of Toukabri and Kateb (2022 (tests the board composition of socially responsible and non-responsible companies. This study finds that the boards of directors of socially responsible companies are dominated by outsiders and independents compared to non-socially responsible companies.…”

Section: Literature Review and Hypothesesmentioning

confidence: 99%

“…Along the same lines, Lu and Herremans (2019) show that gender diversity on the board of directors of polluting companies is associated with higher environmental performance scores. Toukabri and Kateb (2022) perform a longitudinal analysis on a sample of American companies and find that the representation of women positively affects the environmental awareness of companies. Toukabri and Youssef (2022) suggest that CP is poor when boards are not diverse, so Elmagrhi et al (2019) confirm a positive and significant relationship between the percentage of female directors, the age of female directors and the CP of companies.…”

Section: Literature Review and Hypothesesmentioning

confidence: 99%

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The power of critical mass to make a difference: how gender diversity in board affect US corporate carbon performance

Toukabri

Jilani

2022

SBR

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Purpose This study aims to examine the impact of board gender diversity on company greenhouse gas (GHG) performance, the influence of a critical mass of women on boards on carbon performance (CP) score and its three components separately (Scope 1, Scope 2 and Scope 3). This study examines the presence of institutional investors as a contingent factor that intensifies the effectiveness of the critical mass of female directors on CP. Design/methodology/approach Using a sample of the US companies listed on Securities and Exchange Commission for the period 2011–2018 and making a total of 2416 observations. This study shows that reaching a critical mass of female board members enhances the level of CP. In addition, this study finds that the presence of institutional investors positively moderates this relationship. Findings The main results suggest that there is a nonlinear relationship between a critical mass of women directors and CP, and that institutional investors play a strategic role in shaping this relationship. The effect of institutional investors on the three components of CP is also analyzed. Research limitations/implications This research is characterized by the methodology adopted for a quantitative variable for measuring CP. Indeed, other research the proxies related to carbon measurements are often used as a simple binary variable. This study verifies the harmony of the theory of critical mass measuring diversity within the board of directors, the presence of institutional investors on GHG emissions (Scope 1, Scope 2 and Scope 3), unlike previous studies (Tingbani et al., 2020; Nuber and Velte, 2021) which only focus on the two measures of carbon emissions (Scope 1 and Scope 2). Originality/value This study shows identically that gender diversity on the board must reach a critical mass of three women directors to motivate and influence CP. We fill the gap in previous research regarding the role played by the institutional environment of the firm in improving CP. Third, this study highlights the relevance of having a critical mass of pressure-resistant female directors on boards due to their engagement in climate change issues and CP.

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Are CSR and advertising complements or substitutes in spurring firm visibility? Moderating effect of board diversity, CSR committees, and financial slack

Karmani,

Kuzey,

Uyar

et al. 2023

Corp Soc Responsibility Env

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This paper examines corporate social responsibility (CSR) and advertising as two firm visibility channels and tests their complementarity/substitution. The study extends the investigation with moderating variables, including board gender diversity, CSR committees, and financial slack. Using a sample that includes 53,835 firm‐year observations worldwide associated with 10 business sectors from 2007 to 2019, we find that CSR performance is negatively associated with advertising; this holds for the aggregate CSR score as well as for environmental and social pillars but not for the governance pillar. This implies that two visibility channels—namely CSR and advertising—are substitutes except for the governance dimension. Furthermore, female directors do not advocate for the two visibility channels but instead are proponents of one, in line with the agency cost approach. However, CSR committees fully promote two communication channels supported by the composite and three individual pillars of CSR. Finally, financial slack matters in utilizing two publicity channels concurrently. The findings show that several contingencies must be taken into account to improve companies' visibility while avoiding exacerbating agency costs for better business management.

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The bidirectional relationship between corporate social responsibility and financial reporting quality: Does gender diversity matter? Evidence from US companies

Cited by 15 publications

References 127 publications

The bridge to quality financial reporting: Audit committees’ mediating role in IFRS implementation for emerging markets

The bridge to quality financial reporting: Audit committees’ mediating role in IFRS implementation for emerging markets

The power of critical mass to make a difference: how gender diversity in board affect US corporate carbon performance

Are CSR and advertising complements or substitutes in spurring firm visibility? Moderating effect of board diversity, CSR committees, and financial slack

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