Papers by Khaled Hussainey
Technological Forecasting and Social Change, 2022
Despite the importance of corporate transformation toward Industry 4.0 (CTTI4.0), almost no resea... more Despite the importance of corporate transformation toward Industry 4.0 (CTTI4.0), almost no research exists on how companies communicate CTTI4.0 information in their annual reports and how this affects financial performance. To fill this gap, this paper uses computer-aided textual analysis to explore the current practices of CTTI4.0 in the UK context. It also uses quantitative analysis to examine the impact of CTTI4.0 information on financial performance. The analysis shows that strategic investment decision-making (SIDM) practices for CTTI4.0 have accelerated over the period, and these practices vary in industry sectors. Furthermore, it finds that CTTI4.0 disclosure has a positive impact on financial performance. In addition, it finds that environmental, social, and governance (ESG) practices moderate the relationship between CTTI4.0 disclosure and financial performance. This indicates that firms with better ESG performance tend to be more engaged in CTTI4.0 disclosure and better financial performance simultaneously. Our findings offer insights to decision-makers and regulatory bodies regarding the current practices of CTTI4.0 and its potential economic impact.
Journal of International Accounting, Auditing and Taxation, 2019
In this study, we investigate the relationship between accounting conservatism and the cost of eq... more In this study, we investigate the relationship between accounting conservatism and the cost of equity capital. Previous empirical studies examining this association use linear models that collectively resulted in a variety of contradictory outcomes. By combining existing theories in a new non-linear setting, we investigate the presence of a non-monotonic relationship between conservatism and the cost of equity capital for an international sample of public firms in 37 emerging countries during the period 2003-2012. Our findings present robust evidence suggesting a U-shaped, nonlinear relationship between accounting conservatism and the cost of equity capital. The same result holds for disaggregate measures of conservatism and other estimations techniques. The findings of this paper are in line with the theoretical framework of a "too-little-of-a-good-thing" effect, which indicates that the type of the association (negative or positive) depends on the level of conservatism. That is, the relationship is negative to an optimal point after which increasing the level of conservatism will increase the cost of equity capital. This paper sheds more light on the conservatism-cost of equity capital nexus and provides managers, investors, and policymakers with evidence to what extent conservatism is considered as beneficial or harmful.
Corporate Governance and Its Implications on Accounting and Finance
International Journal of Auditing
This study investigates the effect of positive states, perceived supervisor support and independe... more This study investigates the effect of positive states, perceived supervisor support and independence of internal audit function on internal auditors' moral courage. Although extensive research has suggested that risk of feared consequences is the major cause that inhibits internal auditors from reporting managerial fraud, there has been little empirical investigation into the way of fostering internal auditors' moral courage to speak up. This study used a survey of 146 internal auditors in Tunisia. The partial least squares-structural equation model was used to test our hypotheses. The results indicate that self-efficacy, resilience, perceived supervisor support and the independence of internal audit function have a positive effect on the internal auditors' moral courage; however, state hope does not show a significant link. Additionally, we find that women experience higher levels of moral courage than men do.
The Impact of Corporate Governance on Risk Disclosure: Jordanian Evidence
Academy of Accounting and Financial Studies Journal, 2019
This study explores the impact of Corporate Governance (CG) attributes on risk disclosure for a s... more This study explores the impact of Corporate Governance (CG) attributes on risk disclosure for a sample of Jordanian listed firms. The study employs two types of disclosure (voluntary and mandatory) and analyzed the firms’ annual reports for the period of 2008-2015 to extract risk-related disclosure information and CG variables. The study utilizes the Ordinary Least Squares (OLS) regression to carry out the current investigation. The findings indicate that CG attributes (including board size and independent board (non-executive directors), the separation of duties and audit committee meetings) have a statistically positive impact on Voluntary Risk Disclosure (VRD), while this was not the case with the managerial ownership attribute. Further, the results reveal that independent directors have had a significantly positive influence on Mandatory Risk Disclosure (MRD), and audit committee size has had a positive significant, effect on MRD. Finally, the findings show that leverage and pro...
Journal of Financial Reporting and Accounting, 2021
Purpose This paper aims to examine the drivers of corporate donations in Jordan. In particular, t... more Purpose This paper aims to examine the drivers of corporate donations in Jordan. In particular, to examine whether firm-specific characteristics and ownership types affect corporate donations. Design/methodology/approach The analysis is based on a sample of 94 Jordanian listed companies, drawn from the manufacturing and service sectors, over the period 2010–2016. This paper uses ordinary least square regression with a year and industry fixed effects to test the research hypotheses. Findings This paper finds that corporate philanthropic contributions are positively associated with company size, age, profitability, media exposure and governmental ownership. This paper also finds that corporate philanthropic contributions are negatively associated with financial leverage and family ownership. Originality/value The paper provides new evidence on the determinants of corporate philanthropic contributions in a developing country.
Journal of Financial Reporting and Accounting, 2020
Acknowledgement: This paper is a slightly revised version of Chapters 3 and 7 of a Ph.D. thesis e... more Acknowledgement: This paper is a slightly revised version of Chapters 3 and 7 of a Ph.D. thesis entitled: “AAOIFI governance disclosure in Islamic banks: Its determinants and impact on performance” by the first author of the paper (Tawida Elgattani) submitted to the Accounting and Financial Management Division, Portsmouth Business School, the University of Portsmouth (December 2018). Tawida would like to thank the supervisory team (Professor Khaled Hussainey and Dr. Antonios Kallias and the examiners (Professor Mehmet Asutay and Dr. Ahmed Aboud) for their valuable comments on earlier versions of her thesis. The authors of the current paper confirm that there is no any copyright issue associated with their work.
International journal of business, 2015
We examine the determinants of Corporate Social Responsibility Disclosure (CSRD) in Islamic Banks... more We examine the determinants of Corporate Social Responsibility Disclosure (CSRD) in Islamic Banks (IBs). We content-analyse annual reports of 138 IBs across 25 countries to identify levels of CSRD. We use a regression analysis to identify the factors affecting CSRD in IBs. We find a very low disclosure level for CSRD (26%). We also find a positive association between CSRD levels and accounting standards; auditor type; bank size and the existence of a Sharia auditing department. We offer an original contribution to Islamic accounting literature by being the first to investigate CSRD in IBs around the world. We are the first to link CSRD based on AAOIFI standards with bank –specific and country-specific characteristics.
Journal of Risk and Financial Management
In this paper, we offer a novel contribution to Islamic accounting literature by examining the de... more In this paper, we offer a novel contribution to Islamic accounting literature by examining the determinants of Investment Account Holder (IAH) disclosure in Islamic banks’ annual reports. Using data from Islamic banks around the world, our regression analysis shows that the level of IAH funds, the return on IAH funds, adoption of AAOIFI standards, liquidity level, bank size and ownership have a positive significant relationship with IAHs’ disclosure level. Our findings can be useful for IAHs, regulatory bodies and information users in general as they help them to understand IAH practices in Islamic banks and the main incentives of managers to disclose IAHs’ information. The present study offers an original contribution to the Islamic accounting literature as it is the first one—to the best of our knowledge—that investigates the relationship between the specificities of Islamic banks and the extent of IAH disclosure.
Gaining momentum: Towards integrated reporting practices in Gulf Cooperation Council countries
BUSINESS STRATEGY & DEVELOPMENT
Risk Governance and Control: Financial Markets and Institutions
The aim of this study is to investigate context, the impact of International Financial Reporting ... more The aim of this study is to investigate context, the impact of International Financial Reporting Standards (IFRS) on the Key Performance Indicators’ (KPIs) disclosure quality in the United Kingdom (UK). We used the UK listed firms FTSE 350 in the stock exchange market during the pre-IFRS period and the post-IFRS period (2003 to 2004, and 2006 to 2013). In particular, we examine special events such as the emergence of the 2006 UK Accounting Standard Body (ASB) Guidelines for KPIs best practice, the 2010 IFRS Management Commentary, and the phenomenon of the 2008 financial crisis. The results of this paper show that the UK’s mandatory adoption of IFRS has had a positive and significant effect on the KPIs’ disclosure quality. The results demonstrate, also, that together with the emergence of the 2006 UK ASB Guidelines, the 2008 financial crisis, and the 2010 IFRS Management Commentary have had a positive and significant influence on the quantity and quality of the KPIs’ disclosure.
Risk Governance & Control: Financial Markets & Institutions, 2021
The aim of this study is to investigate context, the impact of International Financial Reporting ... more The aim of this study is to investigate context, the impact of International Financial Reporting Standards (IFRS) on the Key Performance Indicators' (KPIs) disclosure quality in the United Kingdom (UK). We used the UK listed firms FTSE 350 in the stock exchange market during the pre-IFRS period and the post-IFRS period (2003 to 2004, and 2006 to 2013). In particular, we examine special events such as the emergence of the 2006 UK Accounting Standard Body (ASB) Guidelines for KPIs best practice, the 2010 IFRS Management Commentary, and the phenomenon of the 2008 financial crisis. The results of this paper show that the UK's mandatory adoption of IFRS has had a positive and significant effect on the KPIs' disclosure quality. The results demonstrate, also, that together with the emergence of the 2006 UK ASB Guidelines, the 2008 financial crisis, and the 2010 IFRS Management Commentary have had a positive and significant influence on the quantity and quality of the KPIs' ...
Journal of Applied Accounting Research
PurposeThe purpose of this study is to investigate the value relevance of accounting information ... more PurposeThe purpose of this study is to investigate the value relevance of accounting information for Islamic, conventional and hybrid banks. It also investigates the moderation impact of IFRS adoption and AAOIFI mandatory adoption on value relevance of accounting information.Design/methodology/approachUsing value relevance models, The authors run panel data regressions on 47 Islamic banks, 112 conventional banks and 42 hybrid banks (conventional banks with Islamic windows). The study covers listed banks from 14 countries over the period 2010–2018.Findingspaper offers three empirical evidences. First, the authors find that value relevance of accounting information is higher for Islamic banks, compared to conventional banks. Second, the authors find that IFRS framework strengthens the relevance of accounting information in Islamic banks, but the authors did not find the same for hybrid banks. Third, the authors find that the mandatory adoption of AAOIFI accounting standards has a mode...
Journal of Financial Reporting and Accounting
Purpose The purpose of this paper is to examine the impact of the mandatory adoption of eXtensibl... more Purpose The purpose of this paper is to examine the impact of the mandatory adoption of eXtensible Business Reporting Language (XBRL) on firm’s stock liquidity. Design/methodology/approach Using a random-effects model, this study examines the impact of the mandatory adoption of XBRL (ADOPXBRL) on firm’s stock liquidity of 980 companies pertaining to 13 countries for a period from 2000 to 2016. Findings This paper finds that the mandatory ADOPXBRL affects negatively and significatively Amihud’s (2002) illiquidity ratio. Therefore, mandatory XBRL adoption enhances the firm’s stock liquidity. In addition, this paper finds that the impact of the mandatory ADOPXBRL on firm’s stock liquidity is more pronounced in civil law countries than in common law countries. Originality/value This paper contributes to the literature on the advantage of XBRL especially for the civil law countries by examining the impact of the mandatory ADOPXBRL on firm’s stock liquidity.
Journal of Risk and Financial Management
In light of the growing interest in corporate social responsibility (CSR), there is still controv... more In light of the growing interest in corporate social responsibility (CSR), there is still controversy regarding its impact on firms’ performance. In this paper, we examine the impact of CSR initiatives, as a marketing investment, on firms’ performance. We treat CSR initiatives as investment and, consequently, the returns appear over the long term. We use the stochastic frontier analysis (SFA) approach which is a forward-looking financial market-based metric that captures the firm’s long-term performance. We focus on the banking industry as it confronts a variety compound of risk. We find that CSR implementation is positively reflected in profit efficiency, regardless of the strategic commitment to implementing CSR and bank size, as these variables do not influence the CSR–performance relationship. However, we find that bank age and competitive positioning have a significant impact on the CSR–performance relationship. Our study provides valuable insights to CSR practitioners and rese...
The impact of financial instruments disclosures on the cost of equity capital
International Journal of Accounting & Information Management
Purpose This study aims to investigate the impact of financial instrument disclosures under the I... more Purpose This study aims to investigate the impact of financial instrument disclosures under the International Financial Reporting Standard (IFRS) 7 on the cost of equity capital (COEC). Design/methodology/approach The sample consists of 56 banks listed in the Gulf cooperation council (GCC) stock markets over 7 years from 2011 to 2017. A self-constructed index is used to measure the compliance level in addition to quantitative methods and panel data regression adopted to test the research hypotheses. Findings The authors find that the compliance level with IFRS 7 does not improve from 2011 until 2017 in the GCC banks. The authors also find that compliance with IFRS 7 disclosures reduces the COEC. Originality/value The authors also provide new empirical evidence that the level of mandatory financial instruments disclosures under IFRS 7 reduces the COEC. The findings offer policy implications. It shows that compliance with IFRS 7 disclosure requirements leads to desirable economic cons...
Covid-19 and performance disclosure: does governance matter?
International Journal of Accounting & Information Management
Purpose This paper aims to investigate whether Covid-19 related information is associated with a ... more Purpose This paper aims to investigate whether Covid-19 related information is associated with a higher level of performance disclosure in the annual reports. Furthermore, it examines the moderating effect of corporate governance on the relationship between Covid-19 and the performance disclosure by using three governance mechanisms: board size, board independence and gender diversity. Design/methodology/approach The authors use quantitative content analysis. The authors applied an automated textual analysis technique to measure the level of Covid-19 information and performance disclosure for the UK Financial Times Stock Exchange all-share non-financial firms. Findings The authors found a significant positive relationship between the Covid-19 disclosure and the firm performance disclosure in the annual reports. The authors also find that both board independence and gender diversity moderate the relationship between the Covid-19 related information and the level of performance disclo...
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Papers by Khaled Hussainey