This study examines whether socially responsible firms behave differently from other firms in their financial reporting. Specifically, we question whether firms that are better in their corporate social responsibility (CSR) performance also behave in a responsible manner to maintain their financial reporting quality and whether the market rewards such responsible behaviors. Using data from S&P 500 US companies, we find that socially responsible firms are less likely to manage their earnings. However, we fail to find significant relationships between CSR and investors’ perceptions on earnings, measured by stock returns and earnings response coefficient. We interpret the results as investors not fully reflecting the benefits from CSR performance. Our findings are consistent with the notion that CSR activities are motivated by managers’ ethical incentives to serve the interests of stakeholders.

In this study, we investigate the effect of assurance service of corporate social responsibility (CSR) reports on the relationship between CSR performance and firms’ financial performance. Specifically, we question whether firms having their CSR performance assured to benefit from such assurance services. Theory suggests that investors apply a lower discount rate when valuing firms if information from the firms is credible. Using a sample of 5040 large U.S. companies, we find that the CSR performance is positively associated with the firms’ financial performance on average and that there is a significant effect of CSR assurance service on the relationship between CSR performance and firms’ financial performance. This implies that firms having their CSR reports assured by external experts experience much higher financial performance than firms without such assurance service. Our findings are consistent with the prior studies and support our argument with regard to the CSR assurance service. The findings have implications for firms considering CSR assurance and accounting professionals for their opportunities.

Systematic risk is the degree to which a firm is sensitive to changes in the overall economy. It is a core concept in finance theory, and is an important measure of firm performance. While much research has looked at the relationship between IT and direct risk measures such as earnings volatility, research is lacking on this core outcome. Additionally, we know from prior research that impacts from IT can change over time. Therefore, we examine the association between information technology and systematic risk over time. We investigate this association using a sample of 2,417 firm-years from 659 unique firms over the years 2003-2007. We find that increased levels of IT intensity are associated with greater systematic risk contemporaneously but result in significant reductions in systematic risk associated with three- and four- year lagged effects. We propose that this occurs due to intangible capital formation and increased flexibility.

This study examines the impact of COVID-19 on customer satisfaction and the value relevance of customer satisfaction. COVID-19 is an unprecedented pandemic that has changed all areas of business. Customer relations are one of the biggest paradigm shifts of this period. Companies have placed more attention on customer relations than on any other areas, and customer relations are an essential element in corporate sustainability. The value relevance directly represents the sustainability of corporations. It is very important for firms to retain their customers in the market, create a potential demand, and, thus, increase the firm value. We investigate whether companies financially benefit from customer relations. Employing the value relevance model, we regress firm value on the customer satisfaction scores with other control variables. We find that the customer satisfaction score has increased throughout the sample period, and that the value relevance of customer satisfaction has declined after the COVID-19 outbreak. Together, we interpret the results as indicating the impact of COVID-19 on the value relevance of customer satisfaction, especially the decreasing trends in value relevance. The results are robust even after controlling endogeneity and outliers. This study has several implications for practitioners and academia regarding the impact of COVID-19 on the value relevance of customer satisfaction.

In this study, I examine whether the product innovation affect the value of cash holdings. A dollar held in a corporation may differ across corporations. The results indicate that the value of dollar increases as the product innovation increases. This is the first study to test if corporate characteristics (i.e., product innovation) affect the value of cash held in a corporation. Therefore, the findings in this study imply that firms with poor product innovation may waste cash quickly and that firms result in reduction of the overall value of organization. This study contributes to the prior study as follows. First, the study extends the stream of product innovation and its effects on firm values by providing new evidence with the precise measure of product innovation. Second, this is the first study to examine the direct relationship between the product innovation and the value of a dollar owned by corporations.

This study examines if the structure of board of directors affects the quality of Management Discussion and Analysis (MD&A). Prior studies suggest that the board structure should have a positive impact on the quality of voluntary disclosure. We test this research question usinga unique set of data from Korea. We collect the sample firms listed in the Korean Stock Exchange from 2010 to 2014. Our two variables of board structure are CEO separation and independence of board of directors. We regress the quality of MD&A on CEO separation and independence of boardof directors with other control variables. We find evidence that the separation between CEO and board chairman is associated with high quality of MD&A disclosure. We also find that the independence of board of directors has a positive impact on the quality of MD&A disclosure. Thisis consistent with our prediction that the board of directors has a monitoring role in corporate disclosures. The findings in this study contribute to the literature by extending our understanding of the effect of board of directors on financial reporting. However, we limit our scope of thestudy in the roles of board of directors. Further study should explore other factors affecting the corporate disclosures.