How do corporate political connections influence financial reporting? A synthesis of the literature

Preuss, Susanne; Königsgruber, Roland

doi:10.1016/j.jaccpubpol.2020.106802

Cited by 52 publications

(48 citation statements)

References 208 publications

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“…The interaction of these internal and external factors, and accrued benefits or incurred costs make it hard to measure the direct impact of political connections (Habib et al, 2018). Similarly, Preuss and Konigsgruber (2021) report that the existence of both political cost as well as political rents make the financial reporting incentives of politically connected firms hard to conceive. Another approach is to examine indirect indicators, such as the audit fees of politically connected firms (Gul, 2006;Wahab et al, 2011).…”

Section: Literature Review and Hypothesesmentioning

confidence: 99%

Political connections, political uncertainty and audit fees: evidence from Pakistan

Ahmad

Bradbury

Habib

2021

MAJ

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Purpose This paper aims to examine the association between political connections, political uncertainty and audit fees. The authors use various measures of political connections and uncertainty: political connections (civil and military), political events (elections) and a general measure of political stability (i.e. a world bank index). Design/methodology/approach The authors measure the association between political connections, political uncertainty and audit fees. Audit fees reflect auditors’ perceptions of risk. The authors examine auditors’ business risk, clients’ audit and business risk after controlling for the variables used in prior audit fee research. Findings Results indicate that civil-connected firms pay significantly higher audit fees than non-connected firms owing to the instability of civil-political connections. Military-connected firms pay significantly lower audit fees than non-connected firms owing to the stable form of government. Furthermore, considering high leverage as a measure of clients’ high audit risk and high return-on-assets (ROA) as a measure of clients’ lower business risk, the authors interact leverage and ROA with civil and military connections. The results reveal that these risks moderate the relationship between political connection and audit fees. Election risk is independent of risk associated with political connections. General political stability reinforces the theme that a stable government results in lower risks. Originality/value The authors combine cross-sectional measures of political uncertainty (civil or military connections) with time-dependent measures (general measures of political instability and elections).

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Section: Literature Review and Hypothesesmentioning

confidence: 99%

Political connections, political uncertainty and audit fees: evidence from Pakistan

Ahmad

Bradbury

Habib

2021

MAJ

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“…Stable innovation investment is considered a critical way for companies to survive and grow in the fierce business competition [ 4 ]. From the perspective of resources, both corporate charitable donations and innovation investment take up a large number of corporate resources, so whether corporate charitable donations inhibit innovation investments is still the focus of academic debates [ 1 , 5 ]. Scholars who hold the " promotion" view focus on corporate charitable donations’ external resource acquisition function based on theories such as resource dependency theory and stakeholder theory.…”

Section: Introductionmentioning

confidence: 99%

Promoting and inhibiting: Corporate charitable donations and innovation investment under different motivation orientations——Evidence from Chinese listed companies

et al. 2022

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Corporate charitable donations under different motivations will have different effects on innovation investment through different action paths, which provides a new perspective to solve the inconsistency of existing research results. Based on the resource-dependent and principal-agent theories, this paper compares and discusses the relationship between charitable donations and innovation investment under different motivations. Using 2008 ~2019 relevant data of listed companies as research samples, a mixed regression model is established for the hypothesis test, and further examines the state-ownership of its moderating role. The results show that the altruistic motivation-oriented corporate donations have a significant inverted u-shaped effect on innovation investment. The tool motivation-oriented corporate donations have a significant U-shaped effect on innovation investment. Moreover, it is further found that for ST (Special Treatment) corporates with the risk of delisting in the tool motivation-oriented charitable donations type, the corporate charitable donations have a significant negative effect on innovation investment. State-ownership can enhance the inverted U-shaped relationship between altruistic motivation-oriented corporate donations and innovation investment but weaken the U-shaped relationship between tool motivation-oriented corporate donations and innovation investment.

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“…Tranfield et al (2003) advocate conducting a search which encompasses published journal articles, unpublished papers, conference proceedings and other sources. However, consistent with prior reviews in accounting (Goddard 2010;Schmidthuber et al 2020;Preuss and Königsgruber 2021) we confined our search to articles in only peer-reviewed journals. As for our search period, we deliberately set the period range to 1992-2020.…”

Section: Methodsmentioning

confidence: 99%

Accrual Accounting at Different Levels of the Public Sector: A Systematic Literature Review

Azhar

Alfan

Kishan

et al. 2021

Australian Accounting Review

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This paper has two main objectives. Firstly, it reviews relevant literature on the experiences of different levels of governments worldwide in adopting public sector accrual accounting (PSAA). Secondly, it critically analyses these studies and seeks to identify gaps in the extant literature to provide suggestions for future research. We reviewed and analysed 136 peer‐reviewed journal articles on PSAA over a 23‐year period spanning different levels of government worldwide. Our review and analysis suggest that the adoption of PSAA by different levels of government worldwide has been a long and complex process requiring possibly substantial implementation costs that are undisclosed to the public. Owing to the absence of high‐quality research providing empirical evidence of the benefits of PSAA, we conclude that thus far, the benefits of PSAA to government and citizens have yet to be substantiated. A limitation of this paper is that it is confined to the keywords used in the literature search. Nonetheless, the approach of aggregating and analysing these articles collectively allows this paper to not only provide useful insights into understanding the determinants and outcomes of PSAA but also to offer meaningful directions for future research with regards to multi‐level PSAA.

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How do corporate political connections influence financial reporting? A synthesis of the literature

Cited by 52 publications

References 208 publications

Political connections, political uncertainty and audit fees: evidence from Pakistan

Political connections, political uncertainty and audit fees: evidence from Pakistan

Promoting and inhibiting: Corporate charitable donations and innovation investment under different motivation orientations——Evidence from Chinese listed companies

Accrual Accounting at Different Levels of the Public Sector: A Systematic Literature Review

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