About Laura Bini

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So far Laura Bini has created 70 blog entries.

Book Review. Othmar M. Lehner and Carina Knoll (Eds), Artificial intelligence in accounting: organisational and ethical implications, Routledge Studies in Accounting (Taylor and Francis), 2022

By | 2024-02-09T01:55:48+01:00 February 9th, 2024|

Riccardo Camilli, Hira Salah ud din Khan / Financial Reporting / 2-2023


 

 


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Dialogue with standard setters. The creation of the International Sustainability Standards Board: Evidence from the steps undertaken by the IFRS Foundation for Sustainability Reporting

By | 2024-02-09T01:50:57+01:00 February 9th, 2024|

Francesca Francioli, Alessandra Lardo, Raffaele Fiume / Financial Reporting / 2-2023


 


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Accrual quality, investor reaction to earnings, and the confirmatory role of sales news

By | 2024-02-09T01:47:30+01:00 February 9th, 2024|

Carlo D’Augusta / Financial Reporting / 2-2023


Purpose: Agency theory predicts that information asymmetry provides agents with an incentive to manipulate performance signals to maximize their utility, which gives principals reasons to distrust such signals. The accounting and finance literature finds empirical support for this prediction by studying how earnings reliability attributes affect investors’ reactions to earnings an-nouncements. However, research pays less empirical attention to whether in-vestors skeptical of earnings reliability look for confirmatory signals in other parts of the income statement. This study aims at filling such this research gap. Design/methodology/approach: This study examines investors’ combined use of earnings and sales news. It adopts an event-study methodology to ana-lyze whether sales news moderates the stock market response to annual earn-ings announcements. Findings: The results show that investors do not fully trust earnings news if earnings beat analyst expectations and the firm has a reputation for low accru-al quality. In this case, positive sales data alleviate investors’ skepticism of earnings news and, thus, make them react more favorably. In contrast, sales data do not affect the market response if the earnings news is negative, or the firm accrual quality is high. These results are robust to different model specifications and explanations. Originality/value: The findings shed new light on how investors use sales data to complement earnings news and our understanding of the consequences of accruals quality on investor information processing.

 


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What drives discretionary loan loss provisions? The role of banks’ business model, listing status and COVID-19 crisis in the European banking sector

By | 2024-02-09T01:44:54+01:00 February 9th, 2024|

Alessandra Allini, Fiorenza Meucci, Flavio Spagnuolo, Annamaria Zampella / Financial Reporting / 2-2023


Purpose: This study examines whether banks’ business models and listing sta-tus drive the discretionary use of loan loss provisions (LLPs) under the Interna-tional Financial Reporting Standard (IFRS) 9 “Financial Instruments”. Design/methodology/approach: Ordinary least squares regression is per-formed on a sample of 5,147 listed and unlisted European banks for the 2018-2021 period. Findings: The main results show that after Expected Credit Loss (ECL) im-plementation, banks are prone to manage their earnings via LLPs. In detail, origi-nate-to-hold and listed banks use LLPs to manage their earnings more strongly than originate-to-distribute and unlisted banks. Further, during the financial crisis due to the COVID-19 pandemic, European banks tended to manage earnings more than during the pre-crisis period. Originality/value: This study contributes to the existing literature by expand-ing research on LLPs and highlighting ex-ante factors that might influence banks’ provisioning behavior, such as their listing status and business model. Practical implications: This study provides useful insights for regulators and accounting setters in making informed decisions regarding provisioning policies, even during periods of turmoil.

 


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Non-Fungible Token valuation: State of the art and future insight

By | 2024-02-09T01:42:07+01:00 February 9th, 2024|

Paola Paoloni, Giuseppe Modaffari, Martina Manzo / Financial Reporting / 2-2023


Purpose: This paper aims to provide an exploratory analysis of Non-Fungible Tokens (NFTs) valuation. NFTs are a new kind of digital asset born out of the dis-ruptive technologies’ introduction (i.e., blockchain). A lot of small and medium en-terprises (SMEs), as innovative start-ups, are involved in this domain. Nowadays, several issues in the evaluation field remain unclear. To fill this gap, this research adopts a holistic approach is crucial to draw a clear picture of the first-time ac-counting treatment of these new digital assets. Design/methodology/approach: Using a structured approach, this research considers some of the state-of-the-art international practices and reviews some major scholars’ opinions on the matter. Particularly, the study analyses the main contributions provided by international entities (e.g., European Financial Reporting Advisory Group – EFRAG, Chartered Business Valuators institute – CBV, PriceWa-terhouseCoopers – PWC), digital operators, and academia. Findings: Based on the two main strands defined for the NFT’s nature, NFTs valuation issues can be resumed in twofold. The first one that considers NFTs as intangible assets suggests following the traditional valuation approaches (cost, in-come, or market) that is already a part of international accounting standards. The second strand that considers NFTs as financial assets proposes a different valuation approach based on quantitative methods coming mainly from finance fundamentals. Originality/value: The originality of this study includes the different NFT valuation approaches, which enrich the literature and can help SMEs in managing and accounting for this new kind of digital asset.

 


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Information asymmetries and debt financing: New evidence from the 2007-2008 financial crisis

By | 2024-02-09T01:38:50+01:00 January 19th, 2024|

Andrea Bafundi, Claudia Imperatore / Financial Reporting / 2-2023


Purpose: Focusing on the 2007-2009 financial crisis, this study investigates how firms’ and debtholders’ information sensitivity jointly shape corporate debt financing. According to the pecking order theory, opaque firms prefer bank loans over more information-sensitive sources like bonds and equity. When external conditions worsen, firms face difficulties accessing bank loans and look for alter-natives. Yet, as bondholders are more information-sensitive than banks, the substi-tution effect may not occur especially for firms with lower financial reporting qual-ity (FRQ). Design/methodology/approach: A matching difference-in-differences ap-proach is used to compare the debt financing of firms with and without access to corporate bond markets before and after the onset of the financial crisis. A sample of quarterly data of US-listed firms is analyzed for the 2006Q3-2009Q2 period. Findings: The reduction in debt financing due to the crisis was greater for firms with access to bond markets. The effect is more pronounced for firms with lower FRQ. These firms also looked more for alternatives such as equity and cash re-sources.

 


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Dialogue with standard setters. Amendments to IAS 1 regarding non-current liabilities with covenants

By | 2023-09-28T10:03:10+02:00 September 28th, 2023|

Stefano Bianchi / Financial Reporting / 1-2023


The International Accounting Standards Board (IASB) in January 2020 issued “Classification of Liabilities as Current or Non-current”, which amended IAS 1 Presentation of Financial Statements. The main purpose of the amend-ments regards the classification of financial liabilities and how to classify them under particular circumstances. The amendments are proposed to be effective for annual reporting periods beginning on or after 1 January 2023, with earlier application permitted. Due to feedback received and enquiries about the classification of financial liabilities with financial covenants, in December 2020 the IFRS Interpretations Committee (IFRIC) published a tentative agenda decision in response to such feedback. Subsequently, in October 2022 the International Accounting Standards Board (IASB) published a document titled “Non-current Liabilities with Covenants (Amendments to IAS 1)”. The purpose of this document is to clarify the conditions with which an entity must comply within twelve months after the reporting period affect the classification of a liability. The amendments are ef-fective for reporting periods beginning on or after 1 January 2024. The classification of financial liabilities as current or non-current is an im-portant consideration for financial reporting purposes, as it can have a significant impact on a company’s financial statements and financial ratios. Current liabilities are those that are expected to be settled within one year, while non-current liabilities are those that are expected to be settled beyond that time frame. The purpose of the following review is to analyse the main impacts of the amendments on the classification of the financial liabilities with covenants and the project’s history and timeline.


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Book Review. Luca Menicacci, Book-Tax Conformity in the IFRS era. Evidence from Italian Listed Companies

By | 2023-09-28T10:01:35+02:00 September 25th, 2023|

Giulio Greco / Financial Reporting / 1-2023


 

 


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Managing cyber risk in the financial sector: Insights from a case study

By | 2023-09-28T09:54:35+02:00 September 25th, 2023|

Chiara Crovini, Pier Luigi Marchini/ Financial Reporting / 1-2023


Purpose: This article focuses on cyber risk as an emerging issue within the risk management process and the internal control system in the financial sector. It in-vestigates whether cyber risk management (CRM) is (dis)integrated into traditional enterprise risk management (ERM) and analyzes the external dynamics affecting the CRM design. Design/methodology/approach: This article draws upon institutional theory and the concept of boundary objects. The research examines a listed Italian bank and gathers the data from semi-structured interviews, direct observations, meet-ings, and archival sources. Findings: The findings underline that cyber risk rationale plays a crucial role in the CRM process. The interplay between institutional complexity and the need to manage cyber risk is critical for a bank to have a stable and flexible infrastructure. The knowledge boundaries related to the cyber risk culture require further cyber risk talk. Originality/value: This research furthers the understanding of cyber risk and CRM as an integral part of the ERM and internal control systems in the financial sector, in which there is a shortage of case studies. The financial sector is highly regulated, and managing cyber risk has become crucial as banks usually deal with enormous amounts of personal and sensitive data stored on networks and in the cloud. Practical implications: This case study emphasizes the crucial role of CRM in the identification and reporting of cyber risk information in annual reports.

 


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Exploring the accounting community perspective on the “Consultation Paper on Sustainability Reporting”

By | 2023-09-28T09:58:18+02:00 September 25th, 2023|

Cristian Carini, Laura Rocca, Monica Veneziani, Claudio Teodori/ Financial Reporting / 1-2023


The International Accounting Standards Board (IASB) in January 2020 is-sued “Classification of Liabilities as Current or Non-current”, which amended IAS 1 Presentation of Financial Statements. The main purpose of the amend-ments regards the classification of financial liabilities and how to classify them under particular circumstances. The amendments are proposed to be effective for annual reporting periods beginning on or after 1 January 2023, with earlier application permitted. Due to feedback received and enquiries about the classification of financial liabilities with financial covenants, in December 2020 the IFRS Interpretations Committee (IFRIC) published a tentative agenda decision in response to such feedback. Subsequently, in October 2022 the International Accounting Stand-ards Board (IASB) published a document titled “Non-current Liabilities with Covenants (Amendments to IAS 1)”. The purpose of this document is to clarify the conditions with which an entity must comply within twelve months after the reporting period affect the classification of a liability. The amendments are ef-fective for reporting periods beginning on or after 1 January 2024. The classification of financial liabilities as current or non-current is an important consideration for financial reporting purposes, as it can have a significant impact on a company’s financial statements and financial ratios. Current liabilities are those that are expected to be settled within one year, while non-current liabilities are those that are expected to be settled beyond that time frame. The purpose of the following review is to analyse the main impacts of the amendments on the classification of the financial liabilities with covenants and the project’s history and timeline.

 


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