About Laura Bini

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So far Laura Bini has created 36 blog entries.

Dialogue with standard setters. The use of video in corporate reporting

By | 2020-12-23T15:10:17+01:00 December 23rd, 2020|

Thomas Toomse-Smith  / Financial Reporting / 2-2020


Companies have many tools and media available to them to communicate with investors and other stakeholders. While PDF remains the most popular medium for listed companies in the UK, video is also identified by both companies and investors as an area where future development is expected. This article looks at how companies currently use video in corporate reporting, considers how it might be used in the future and explores some interesting examples.

 


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Integrated reporting and the epistemic authority of Big Data: An exploratory study from the banking industry

By | 2020-12-22T19:18:03+01:00 December 22nd, 2020|

Alice Francesca Sproviero  / Financial Reporting / 2-2020


This paper aims at exploring how corporate members involved in integrated re-port (IR) preparation assess the reliability of Big Data as a new source of information. It investigates IR preparation within a company operating in the Italian banking industry that has adopted Big Data since 2015. Using the epistemic authority lens (Kruglanski et al., 2005), this study reveals how corporate members draw mainly on their professional background and the Big Data-related initiatives to define the extent to which Big Data contributes to IR preparation, with educational background and corporate circumstances playing a less incisive part. Constructing performance indicators, identifying prospective information to contrast criminal phenomena and lending support to relational sustainability all act as in-formational and motivational factors that lead members to rely on Big Data while preparing the IR. The paper contributes to the infant literature on Big Data in corporate reporting by offering early practical insights into how Big Data informs IR preparation. It also provides evidence of a necessary intertwining between ac-counting-based knowledge and training initiatives on advanced analytics to fully exploit Big Data in IR preparation.

Insolvency, crisis, financial indicators, early warnings.


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Are tax incentives determinant and relevant for capitalizing R&D expenditures? Evidence from Europe

By | 2020-12-22T19:15:20+01:00 December 22nd, 2020|

Giuseppe Di Martino, Grazia Dicuonzo, Arcangelo Vitelli, Vittorio Dell’Atti / Financial Reporting / 2-2020


Using a sample of European listed companies between 2014 and 2017, we ex-a¬mine accounting factors that lead management to capitalize R&D costs, with a specific focus on the tax incentives in the form of government grants. In our analysis, we distinguish between companies which capitalize R&D costs (“capitalizers”) and companies which expense R&D costs (“expensers”). The evidence shows that the choice to capitalize R&D costs is positively related to the recognition of grants as revenue. We also investigate the value relevance of tax incentives related to R&D expenditures. Our empirical findings show that investors draw a distinction between government grants associated with research costs (EXP) and those associated with development costs (CAP). This paper presents both theoretical and practical implications. It contributes to the current debate on expensing or capitalizing R&D costs through a study of tax incentives received by companies for their research activity. Moreover, it offers empirical evidence on the use of R&D cost capitalization for purposes of tax incentives, which can be utilized by standard setters to assess opportunistic behaviors adopted by companies.

Accounting choices, government grants, R&D expenditures, tax incentives, value relevance.


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Can a quantitative approach be mitigated? Proposals for the application of the “early warnings” required by the new Italian Insolvency Code

By | 2020-12-22T19:09:32+01:00 December 22nd, 2020|

Fabrizio Bava, Massimo Cane, Melchior Gromis di Trana  / Financial Reporting / 2-2020


In compliance with European regulations, the new Italian “Insolvency Code” introduced new tools to prevent future financial crises in businesses (“early warnings”). Their aim is to highlight future insolvency issues, to enable timely action in order to avert the potential crisis for as long as possible.V This mechanism will come into force on 15 August 2020. Based on a previous investigation that identified the most sensitive financial ratios for evaluating a go-ing concern, this study proposes and tests a possible approach which combines generic quantitative indicators with a case-by-case solution. A discriminant analysis was made on a pairwise sample of Italian non-listed small and medium-sized companies (SMEs). The proposed model overcomes the problem that arose from a combined interpretation of the indicators, and also it acts as a tool that can deter-mine the level of risk within each situation. This approach aims to limit the rigidity produced by common quantitative thresholds, thereby reducing false positives and negatives, ensuring an automatic reporting process that can preserve the efficiency of the early warning mechanism. Furthermore, our proposal is better suited to SMEs, since it is based on financial statements rather than forecasts.

Insolvency, crisis, financial indicators, early warnings.


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Does the Integrated Reporting’s definition of human capital fit with the HR manager’s perspective?

By | 2020-12-22T19:05:30+01:00 December 22nd, 2020|

Maurizio Cisi, Francesca Alice Centrone, Laura Corazza  / Financial Reporting / 2-2020


The assessment of the organisation’s ability to create value over time through its human capital (HC) is crucial for every business. Several definitions of HC exist, quite ambiguous and not unique. This fuzziness is impacting, in turn, the business practice. This study is grounded on the concept of HC, as defined by the Integrated Reporting (IR) and it is focused on testing the self-identification of HR managers with the IR definition. With this work, authors want to question the inclusivity of the definition of HC, as well as, its practical suitability, recurring to a theoretical framework called dialogic-polylogic accounting. A first exploration of the HC definition from the IR framework has been con-ducted, representing the cause-effect links and some reflections on its semantics. Furthermore, the opinion of a purposive sample of key informants HR managers is explored through a qualitative content analysis on 19 semi-structured interviews. Such key informants have a first-hand knowledge about the community of Italian HR managers, and they have no experience in IR representing the voice of excluded, but potential users. Despite an initial sympathetic reaction, the HC practitioners stressed an excessive technical rigidity in IR definition, quite distant from their field experience on HC.

Human capital definition, Integrated Reporting, human resources, dialogic-polylogic accounting, non-financial reporting.


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Is IFRS 9 better than IAS 39 for investors’ decisions? Evidence from the European context at the beginning of the transition year

By | 2020-11-04T17:02:07+01:00 November 4th, 2020|

Mechelli Alessandro, Sforza Vincenzo, Cimini Riccardo / Financial Reporting / 1-2020


The first-time adoption of International Financial Reporting Standards (IFRS) 9 at the beginning of fiscal year 2018 has offered the opportunity to test whether the informationn provided by this new accounting standard on financial instruments is more useful for investors than International Accounting Standard (IAS) 39. This paper assesses and compares the value relevance of book value calculated according to the requirements of the two accounting standards on financial instruments at the beginning of the transition year for a sample of 110 financial entities listed in 20 stock markets that have recorded transition effects between retained earnings. Findings provide evidence that both IAS 39 and IFRS 9 are value relevant and that the second one adds more infromation than that previously supplied by the first one. The paper contributes to the literature by providing the first evidence of the usefulness of the new accounting standard on financial instruments. About its practical implications, the paper provides insights regarding the high quaity of the International Accounting Standards Board (IASB)’s standard setting process.

IFRS 9, IAS 39, value relevance, European Union, financial entities


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European Financial Reporting Enforcement: Analysis of Practices and Indices

By | 2020-11-04T16:50:54+01:00 November 4th, 2020|

Johansen Thomas Riise, Olsen Carsten Allerslev, Plenborg Thomas / Financial Reporting / 1-2020


This paper analyses how financial reporting enforcement varies across 17 European countries and the extent to which the enforcement indices used in the existing accounting literature capture this enforcement. Based on survey responses from European enforcement bodies and regulatory specialists, the study finds extensive variations in financial reporting enforcement across the European countries. Furthermore, enforcement indices used in the accounting literature do not appear to capture financial reporting enforcement. These findings should be of interest to ESMA and other enforcement bodies as well as for the use of enforcement indices in accounting research.

financial reporting, financial reporting enforcement, enforcement, regulation


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A critical approach to BSC studies: State of art, critical issues and future trends

By | 2020-11-04T16:40:08+01:00 November 4th, 2020|

Hristov Ivo, Chirico Antonio / Financial Reporting / 1-2020


The aim of this paper is to identify criticisms of the Balance Scorecard (BSC) and create a new model that is more adequate for business performance, thus providing researchers and practitioners with a way to manage critical issues connected to the BSC. To this end, we devote our attention to two main research questions: (1) What are the main critical dimensions in the existing studies on BSC? (2) How could the structure of the BSC be modified in order to take into account its critical dimensions? Accordingly, we review articles published in 429 journals, in 22 different subject areas of the Chartered Association of Business Schools’ Academic Guide (ABS). We examine a total of 342 papers and obtain 102 relevant papers that focus on criticism of the BSC. Thanks to the information obtained from a survey and interviews conducted with managers of Italian companies, we create and adjusted BSC (ABSC) that allow us to considerate the critical aspects from a new perspective, named the critical perspective. The conceptual model is developd in three dimensions (conceptual, structural and environmental). Research findings suggest that considering the critical perspective makes it possible to build the ABSC, making this management tool more accessible and useful for businesses.

balanced scorecard, performance management, critical perspective, ABSC


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The information content of Fairness Opinion in M&A: Evidence from Italy

By | 2020-11-12T10:08:50+01:00 November 4th, 2020|

Courteau Lucie / Financial Reporting / 1-2020


One of the major sources of inefficiencies in M&A transactions is the asymmetry of information between the bidder and the target. Several disclosure strategies are used by bidders to convince target shareholders to tender their shares but also to convince their own shareholders about the value of the proposed deal. Target managers also try to communicate to their shareholders their appreciation of the offer. To add credibility to this communication, experts are often called on to express an independent opinion on the offer price, in a document called the Fairness Opinion (FO). While FOs have been found to have no effect on deal efficiency in the US, this study re-examines the issue by considering the actual content of the document, in terms of the valuation process that leads to the expert opinion, in the context of Italian M&As where FOs are mostly voluntary and often provide detailed information about target valuation. The results show that even in a setting where weak enforcement of disclosure regulations allows bidders and targets to choose the level and detail of disclosure, the quality of the content of FO has only a weak association with the performance of the deal, both in terms of bidder announcement returns and of post-deal market and operating performance.

mergers and acquisitions, fairness opinion, firm valuation methods


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Dialogue with standard setters. Disclosure initiative and related research projects

By | 2019-09-27T10:36:11+02:00 September 27th, 2019|

Fiume Raffaele, Onesti Tiziano, Bianchi Stefano / Financial Reporting / 1-2019


The disclosure in financial statements is one of the pillars of the framework of the International Financial Statements (IFRS). All the standards include a relevant section with indication about the information and data to be disclosed in the notes, however feedbacks received from the stakeholders and users indicated the existence of concerns about the effectiveness of disclosures in financial statements and about the disclosure overload. In order to respond to the above concerns and feedbacks, the International Accounting Standards Board (IASB) launched the Discosure Initiative in 2013. The Disclosure Initiative is a multi-faced project that involves various IFRSs aiming to limit the disclosure in the financial statements and improving the financial information, it is part of the global project “Better Communication in Financial Reporting” that will be implemented in order to improve the way financial information is prepared by the IFRS entities. The purpose of the following review is to analyse the different stages of the Disclosure Initiative between the four completed phases and the on-going projects and to comment its results.

disclosure initiative, materiality, principles of disclosure, primary financial statements


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