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So far Financial Reporting has created 115 blog entries.

Investigation of risk management and risk disclosure practices of Italian listed local utilities

By | 2017-12-29T17:44:18+01:00 December 27th, 2017|

Aureli Serena, Salvatori Federica/ Financial Reporting, Riviste / Fascicolo: 1-2013

Local utility services deeply affect the overall quality of life of a country’s population. For this reason service providers should pay strong attention to risk management practices, but also to the external communication of both the risk exposure and the risk responses. Following a qualitative methodology, this paper aims at exploring the risk management and risk disclosure practices of five Italian listed local utility companies combining two research methods: questionnaire and document analysis. Results show that these Italian listed local utilities are characterized by different maturity levels of risk management practices, which are not extensively disclosed in public reports and documents. Interestingly, the link between the level of disclosure and maturity of risk management practices is confirmed just for those companies that seem to be the most mature in terms of risk management.

Keywords: Risk disclosure, public utilities, risk management

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An exploratory study of intangibles risk disclosure in annual reports of banking companies from the UK, US, Germany and Italy – Some descriptive insights

By | 2017-12-29T17:44:43+01:00 December 27th, 2017|

Durst Susanne/ Financial Reporting, Riviste / Fascicolo: 1-2013

Intangibles are viewed as the key drivers in most industries, and current research shows that firms voluntarily disclose information about their investments in intangibles and their potential benefits. Yet little is known of the risks relating to such resources and the disclosures firms make about such risks. In order to obtain a more balanced and complete picture of firms’ activities, information about the risky side of their intangibles is also needed. This exploratory study provides some descriptive insights into intangibles-related risk disclosure in a sample of 16 large banks from the United States (US), United Kingdom (UK), Germany and Italy. Annual report data is analyzed using the three Intellectual Capital dimensions. Study findings illustrate the variety of intangibles-related risk disclosure as demonstrated by the banks involved.

Keywords: Intangibles, risks related to intangibles, risk reporting, disclosure, banking sector, content analysis

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Risk profile disclosure requirements for Italian insurance companies: Differences in the financial statement preparation

By | 2017-12-29T17:45:12+01:00 December 27th, 2017|

Buzzichelli Francesca, Di Pietra Roberto/ Financial Reporting, Riviste / Fascicolo: 1-2013

The content of the annual report of insurance undertakings is regulated by art. 2428 of Italian Civil Code, as well as by the Insurance Code and specific Italian Insurance Supervisor’s regulations. The paper compare the existing legislations, providing an overview of the different requirements, with particular attention to the risk profile disclosure. Moreover, the paper analyzes a significant sample of Italian insurance groups annual reports (from 2007 to 2009 financial year), using content analysis, in order to highlight the level of compliance with the existing rules and the level of preparedness for the upcoming Directive 2009/138/EC requirements (Solvency II Directive), which will come into force starting from 2012 financial year.

Keywords: Annual report, disclosure, financial statements, insurance risk profile, Solvency II, Solvency and Financial Condition Report (SFCR)

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Assessing value relevance of comprehensive income in European banks and other financial institutions

By | 2017-12-29T17:45:43+01:00 December 27th, 2017|

Mechelli Alessandro, Cimini Riccardo/ Financial Reporting, Riviste / Fascicolo: 1-2013

The IAS/IFRS compliant groups have been disclosing comprehensive income since 2009, when the IAS 1-revised became effective. This paper aims to investigate the value relevance of comprehensive income and its components in European banks and other financial institutions. The research has been developed by having a sample of 166 European listed groups whose data have been collected in the 2009, 2010 and 2011 (498 firm-year observations) consolidated financial statements. In contrast to previous findings, related to all the sectors, our research highlights a higher value relevance of comprehensive income in respect to net income. Moving to the single OCI components, our results suggest that gains and losses on remeasuring available-for-sale financial assets (AFSit) are value relevant in European banks and other financial institutions.

Keywords: Comprehensive income, net income, value relevance, IAS 1-revised, European listed groups

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Dialogue with standard setters. The EFRAG activities on taxation: A survey of the recent work

By | 2017-12-29T17:46:14+01:00 December 27th, 2017|

Vignini Stefania/ Financial Reporting, Riviste /Fascicolo: 2-2013

The object of this brief note is to analyze the interest of EFRAG in fiscal matters on the basis of its activities through an examination of the different papers it has produced over the years. In its activity, both as advisor to the standard setting and enforcement and as proactive stimulator of debate on relevant issues, the EFRAG has demonstrated a certain interest towards the question of tax. A piece of research carried out has led to a list (starting from the most recent and ending with the oldest) of 10 discussion papers addressing the subject at hand, of which we give here only the titles: 1. 08/02/2013: EFRAG and FRC issues, the feedback Statement on the Discussion Paper “improving the Financial Reporting of income tax”; 2. 04/09/2012: EFRAG reports on consolidated input received in European outreach events on the discussion paper on improving the Accounting of Income taxes; 3. 14/06/2012: EFRAG reports on input received at the European outreach event held on 15th March in Milan on the discussion papers ‘Business Combination under Common Control’ and ‘Improving Financial Reporting of Income tax’; 4. 01/06/2012: EFRAG reports on input received at the European outreach event held on 18th April in Vienna on the discussion papers ‘Business Combination under Common Control’ and ‘Improving Financial Reporting of Income tax’; 5. 30/05/2012: EFRAG reports on input received at the European outreach event held on 15th  May in Warsaw on the discussion papers  ‘Business Combination under Common Control’ and ‘Improving Financial Reporting of Income tax’; 6. 29/05/2012: EFRAG reports on input received at the European outreach event held on 17th April in Amsterdam on the discussion paper ‘Improving Financial Reporting of Income tax’; 7. 10/05/2012: EFRAG reports on input received at the European outreach event held on 16th April in London on the discussion papers  ‘Business Combination under Common Control’ and ‘Improving Financial Reporting of Income tax’; 8. 10/09/2009: EFRAG’s Comment Letter on IASB ED Income tax; 9. 28/07/2009: EFRAG extends its comment deadline on the IASB ED Income taxes; 10. 05/06/2009: EFRAG extends its comment deadline on the IASB ED Income taxes. This list of Discussion Papers is essentially the result of two major projects in our area of interest, as it may be inferred from reading the last Annual Review (2011): Business Combinations under Common Control and Improving the Financial Reporting of Income Tax. […]

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Has accounting quality increased in Europe after IFRS adoption?

By | 2017-12-27T14:49:03+01:00 December 27th, 2017|

Raffournier Bernard/ Financial Reporting, Riviste /Fascicolo: 2-2013

Since 2005, European listed companies must comply with IFRS in the preparation of their consolidated financial statements. The objective of this note is to provide a short synthesis of the effects of IFRS adoption on the quality of financial reporting in Europe. A comprehensive review of available empirical evidence has recently been published (Brüggemann et al., 2013). I will thus only mention a limited number of studies and outline some lessons that can be drawn from their results. […]

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Research needs and opportunities in Context-Based Sustainability

By | 2017-12-27T14:47:44+01:00 December 27th, 2017|

McElroy Mark W., Baue Bill/ Financial Reporting, Riviste/ Fascicolo: 2-2013

In recent years, a new, literalist approach to managing the sustainability performance of organizations has emerged, the makeup of which stands in stark contrast to the prevailing, incrementalist approach. Unlike the incrementalist approach, which is predicated on the view that progress in sustainability occurs when ever marginal improvements in the social and environmental impacts of organizations are made, the literalist approach takes a more rigorous stand. Under the literalist doctrine (also known as context-based sustainability, or CBS), an organization’s sustainability performance is a function of what its social and environmental impacts are relative to specific norms, standards, or thresholds for what such impacts must be in order to be sustainable. Here the literalist doctrine relies on the principle of sustainability context, or the general idea that sustainability performance assessments must be made in light of social and ecological limits, and never without them. Actual implementations of sustainability context in practice, however, are still the exception, not the rule, mainly because generally-accepted guidelines for how to do it do not yet exist. In response, this paper takes up the question of what the research and development needs and opportunities are in the field of CBS, and which must be addressed if moving sustainability context from the realm of theory into practice is to have any chance of succeeding. The authors begin by defining CBS, explaining the logic and epistemology behind it, and then continue by identifying and discussing specific issues of interest for further research and development in the social and environmental accounting domains.

Keywords: Epistemology, incrementalist, literalist, sustainability context

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Socio-environmental reporting trends in the Italian local government: Thrive or wither?

By | 2017-12-27T14:46:28+01:00 December 27th, 2017|

Bracci Enrico, Tallaki Mouhcine/ Financial Reporting, Riviste / Fascicolo: 2-2013

Social and environmental reporting (SER) in the public sector has been widely discussed in the last years (Gray et al., 1996; Mathews, 1997; Parker 2005; Guthrieand Abeysekera, 2006; Guarini, 2002; Hinna 2004; Marcuccio and Steccolini,2005). However, despite the interest in this area of research, there are still a number of calls to deepen the study of SER in the public sector (Lewis, 2008; Grubnikand Ball, 2007). In Italy, the literature shows the risk of adopting SER as a management fashion, more than a conscious process of organizational change (Marcuccio and Steccolini, 2005). This paper investigates about the reasons for the adoption and eventual abandonment of SER by local government in Italy.

Keywords: Social reporting, environmental reporting, local government, adoptionand abandon of SER

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Lessons from the Third Wave: A reflection on the rediscovery of Corporate Social Responsibility by the mainstream accounting research community

By | 2017-12-27T14:45:05+01:00 December 27th, 2017|

Patten Dennis M./ Financial Reporting, Riviste /Fascicolo: 2-2013

In this paper, I reflect on what I, as a long-time member of the social and environmentalaccounting community, see as both the positive and negative aspects ofwhat I refer to as the ‘third wave’ of corporate social responsibility (CSR) researchby more mainstream accounting researchers. I note that CSR-themed articles havebeen published in the primary mainstream journals, in waves (and a ripple), sincethe 1960s, and I review those contributions. More importantly, I attempt to assesswhat the newest wave of research adds to the body of knowledge, and how thatmight have implications for the social and environmental accounting community.

Keywords: Social and environmental accounting, corporate social responsibilityreporting, mainstream accounting

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Special Forum on “Social and Environmental Accounting and Accountability”

By | 2017-12-27T14:43:51+01:00 December 27th, 2017|

Cho Charles, Costa Ericka, Michelon Giovanna/ Financial Reporting, Riviste / Fascicolo: 2-2013

The purpose of this editorial is twofold. First, to present the reasons as to why we asked Financial Reporting to host a Special Forum on Social and Environmental Accounting and Accountability (SEAA) research. Second, to summarize the contributions that are published therein and provide Financial Reporting readers with insights on the hot topic of SEAA research today. The idea of this Special Forum was conceived during a period in which Italian Academia was (and still is) undergoing many changes, including both an active involvement but also, and unfortunately, passive reforms – especially when these changes are brought into the system with a pronounced top-down approach. Undoubtedly, internationalization in Italy has become one of the major challenges and a sensitive topic in academic debates, particularly after the new national procedures on the accreditation to become Associate or Full Professor were put in place. Too often, internationalization is interpreted as the necessity to merely publish in international journals but we believe this outcome is “only” the result of a much more complex process. Infact, internationalization requires being open to new and different methodological approaches, being ready to identify relevant research questions with wide implications and, above all, the ability to work and study in an international environment and collaborate within an international network. […]

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