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We investigate whether IFRS adoption and the extent of disclosure in a country play any role in reducing perceived corruption, after controlling for the effects of political institutions and economic development. The sample covers 104 countries over the period 2009-2011. We find strong evidence that the length of IFRS experience and the extent of disclosure are negatively related to perceived corruption in a country. We also find that, relative to developed countries, developing countries benefit more from IFRS experience in lowering perceived corruption. Our results are robust to several sensitivity tests, including alternative models, alternative measures of perceived corruption, controlling for endogeneity, and correcting for two-way cluster-robust standard errors. Our findings are important because critics have questioned the merit of IFRS adoption by (developing) countries with weak institutional settings.

This study examines the effect of audit quality on earnings management and cost of equity capital of listed companies in India. Our results show that companies employing a high-quality auditor have a lower degree of earnings management and lower cost of equity capital. The results also show that companies belonging to business groups have a lower degree of earnings management and lower cost of equity capital than do stand-alone companies but that they benefit less from employing a high-quality auditor. Our results are based on a large sample of 7,303 firm-year observations on listed companies in India and are robust to alternative measures for our main variablesaudit quality, earnings management, and cost of capitaland to tests for endogeneity and the impact of the global financial crisis (GFC). Given the distinctive and unique institutional features of the Indian market such as the dominant role of family business groups in the national economy, large market share of domestic audit firms, less litigious environment, and less effective professional accounting bodies in checking audit failure, our findings make a significant contribution to the literature on the role of audit quality as a corporate governance monitoring mechanism as reflected in the impact on earnings management and cost of equity capital.

This study examines the joint effect of carbon disclosure and greenhouse gas (GHG) emissions on firms’ implied cost of equity capital (COC). Based on 4655 firm‐year observations across 34 countries, we find firms’ GHG emission intensity to be positively associated with COC. However, we find also that the penalty linked with higher COC is moderated by extensive carbon disclosure. We provide evidence that the extent of carbon disclosure helps reduce the premium required by investors to compensate for poor carbon performance. Our study provides insights to policymakers, investors and managers on the combined effect of carbon disclosure, and emission intensity.

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The purpose of this paper is to investigate the effect of IFRS adoption on the cost of equity capital in New Zealand listed companies. It is hypothesized that the cost of equity has decreased for New Zealand companies around IFRS adoption due to reduced information asymmetry and improved financial reporting quality. Design/methodology/approach-We analyze a sample of 354 firm-year observations on New Zealand listed companies over the period 1998-2009. First, we estimate the cost of equity capital by utilizing the modified price-earnings-growth (modified-PEG) ratio model. Then we regress this estimated cost of equity on a set of firm-specific variables known to be correlated with a firm"s cost of equity. We also control for year-effects for variation in the underlying risk-free rate (including inflation) across time. The effect of IFRS adoption on cost of equity is captured by a dummy variable. Findings-We find that there is a significant negative association between IFRS adoption and cost of equity capital. We also find that the cost of capital declines for both the mandatory adopters and the voluntary adopters of IFRS. These results are robust to several variations in sample composition and model specification. Originality/value-This is the first study to provide empirical evidence on the impact of the introduction of IFRS on the cost of capital of New Zealand companies. This study is also motivated by the recent mixed evidence on the adoption of IFRS.

This study explores the quality of carbon reporting (QCR) by New Zealand (NZ) firms and its changes over time. It also explores the impact of QCR on the market reputation of firms. Using a sample of 300 company‐year observations between 2015 and 2020 from top listed firms of NZ, the study develops a 14‐item QCR index. The study finds that the company‐level QCR reporting by NZ firms overall is not praiseworthy, as firms need to improve QCR in many aspects (both in‐house efforts as well as external reporting). Although QCR has increased over time, firms' QCR efforts cannot be treated completely authentic. Majority of firms in NZ have disclosed unaudited carbon information to investors and other stakeholders. Additionally, our study finds that QCR positively affects the market reputations of firms, and the market behaves accordingly. Specifically, firms' organic carbon efforts are paid‐off (through increased market reputation) by the market players and cosmetic/decoupled behaviour is penalised (through decreased market reputation). This study is the first on QCR reporting using a sample of NZ firms and an account of their initiatives towards the carbon emission reduction initiative and related disclosures. The study's findings have policy implications.