The impact of socio-economic accounting statements on the investment decision: An empirical study

Belkaoui, Ahmed

doi:10.1016/0361-3682(80)90001-x

Cited by 92 publications

(74 citation statements)

References 13 publications

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“…It would be particularly useful to actively involve financial analysts in controlled experimental studies to assess alternative reactions to investment decision tasks following a manipulation of sustainability assurance engagements (e.g. Belkaoui, 1980;Chan and Milne, 1999;Milne and Chan, 1999;Rikhardsson and Holm, 2008). Such a research method would gain insights in the behavioural implications associated with the use of sustainability-related information by the financial community.…”

Section: Conclusion and Discussionmentioning

confidence: 99%

Determinants of the adoption of sustainability assurance statements: an international investigation

2008

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This paper explores the factors associated with the voluntary decisions to assure social, environmental and sustainability reports. Since the market for assurance services in this area is in its formative stages, there is a limited understanding of the demand for this emergent non-financial auditing practice, which is evolving rapidly across different countries. Drawing from extant literature in international auditing and environmental accounting, we focus on a set of country-level institutional factors to explain the adoption of sustainability assurances statements among an international panel of 212 Fortune Global 250 companies for the years 1999, 2002 and 2005. Consistently with our expectations, our results provide evidence that companies operating in countries that are more stakeholder-oriented and have a weaker governance enforcement regime are more likely to adopt a sustainability assurance statement. Further, the demand for assurance is higher in countries where sustainable corporate practices are better enabled by market and institutional mechanisms. Our exploratory findings also indicate that the likelihood to choose a large accounting firm as assurance provider increases for companies domiciled in countries that are shareholder-oriented and have a lower level of litigation. We conclude the paper suggesting three directions of research in the area of sustainability assurance that have relevant academic and practical implications.

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Section: Conclusion and Discussionmentioning

confidence: 99%

Determinants of the adoption of sustainability assurance statements: an international investigation

2008

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“…Early studies that used experimental research methods for this type of disclosure were performed by Hendricks (1976) and Belkaoui (1980). Hendricks's experiment focused on human-resource accounting and showed that stock investment decisions were affected by the inclusion of this information to conventional accounting information.…”

Section: Studies Of the Effects Of Environmental Disclosuresmentioning

confidence: 98%

The effect of environmental information on investment allocation decisions – an experimental study

Ríkharðsson

Holm

2006

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This paper focuses on the use of environmental information in investment decision making. The research approach employed is based on an experiment where three groups of final year finance students were asked to allocate investment funds between two companies based on financial accounts and information material from these companies in which environmental information was included in varying degrees. The overall conclusion is that the qualitative environmental information affects short term allocation decisions, hence indicating a risk reduction potential of environmental information comparable to the classic interpretation of financial information.The quantitative environmental information included in the experiment seems to mitigate rather than extend the directional effect of more environmental information. The evidence also seems to indicate that decision makers are not always aware which information categories affect their decision making. Hence, this has implications for how the potential value of environmental information is to be assessed. Finally, experimental studies as a methodology seem to be better suited to indicate actual effects of different types of information on decision making than attitude surveys.

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“…Another group of studies has concentrated on cognitive aspects of decision making and behavioural motivations of retail investors faced with 'qualitative information' such as selected environmental and social issues connected with the operations of investments (see Anand and Cowton, 1993;Goyen, 1998a, 1998b;Belkaoui, 1980;Haigh, 2007;Irvine, 1987;Lewis, 2001;Lewis and Cullis, 1990;Lewis and Mackenzie, 2000;Lewis et al, 1998;Mackenzie, unpublished Ph.D. thesis;Mackenzie and Lewis, 1999;Milne and Chan, 1999;Rikhardsson and Holm, 2006;Rivoli, 1995;Webley et al, 2001;Winnett and Lewis, 2000). Generally, this body of work, much of it consisting of experimental studies of actual and hypothetical investors, would lend support to the behavioural strand in institutional fi nance, challenging the mean-variance theorem of neoclassical economics (also see Statman, 1999;Thaler, 1980Thaler, , 1999Thaler, , 2000.…”

Section: Prior Literaturementioning

confidence: 99%

Management practices in Australasian ethical investment products: a role for regulation?

Haigh

Guthrie

2008

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This paper adds to the literatures on socially responsible investment (SRI), investment management, regulation of fi nancial services and social accounting by providing a comprehensive survey of investment methods used in SRI products and regulated social reporting in fi nancial services. Australian and New Zealand regulations require issuers of selfdeclarative SRI products to provide details on methods used in portfolio construction. Regulators' objectives to standardize the reporting of portfolio construction and thus improve its comparability were identifi ed by examination of parliamentary debates and other public reports. Portfolio construction styles of 86 SRI products managed by 63 fi nancial institutions in Australia and New Zealand were chosen for analysis. Statistical analysis was conducted to identify associations between styles, construction methods and assessment techniques over a four-year period: [2004][2005][2006][2007]. These aspects were further examined in 18 case studies. Over the period, diversity and intensity of construction methods had increased both within and between investment managers. The non-standard nature of management consultation used in SRI products, marketing needs to distinguish rather than standardize investment methods and the types of information thought relevant to clients did not reconcile easily with the types of information required by regulation. The more recent products in the sample tended to reference market indexes in portfolio construction, separate social considerations from fi nancial considerations and delegate qualitative assessments of invested companies. Consumer policy implications arise from questions bearing on the integrity of information attached to investment products and the effective monitoring of delegated investment processes.

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The impact of socio-economic accounting statements on the investment decision: An empirical study

Cited by 92 publications

References 13 publications

Determinants of the adoption of sustainability assurance statements: an international investigation

Determinants of the adoption of sustainability assurance statements: an international investigation

The effect of environmental information on investment allocation decisions – an experimental study

Management practices in Australasian ethical investment products: a role for regulation?

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