Purpose: By analyzing the relationship between discretionary accruals and information asymmetry throughout the latest global financial crisis, this paper deepens our understanding of the effect of managerial discretion on the informativeness of earnings in the case of a negative exogenous shock in business fundamentals.Design/methodology/approach: This paper examines the relationship between discretionary accruals and the bid–ask spread within the Italian Stock Exchange over the period of 2007–2012. The authors focus on one country in order to avoid systematic cross-country performance variation in discretionary accruals models, and they use the bid–ask spread as a proxy for information asymmetry.Findings: This paper shows the role played by discretionary accruals in unblocking private information in the case of a negative exogenous shock in business fundamentals and finds a significant negative relationship between discretionary accruals and the bid–ask spread during the global financial crisis, although only limited to firms with strong corporate governance.Research limitations/implications: Since the paper focuses on one country, the findings might not be necessarily generalizable. Moreover, the relatively small sample size could be another limitation.Practical implications: This paper offers useful evidence to identify settings in which discretionary accruals increase the informativeness of earnings. Further, it suggests controlling for macroeconomic variables to mitigate the risk of an erroneous interpretation of discretionary accruals models.Originality/value: This paper extends knowledge and collects new evidence on the information content of discretionary accruals by investigating the relationship between discretionary accruals and information asymmetry during a systemic crisis.

In response to growing stakeholder interest in social and environmental policies, recent European regulatory developments have made non‐financial disclosure mandatory for large companies with more than 500 employees. Drawing on institutional theories, this study investigates the impact of the regulatory process on environmental corporate disclosure. To explore this phenomenon, a multi‐case content analysis was conducted, supported by the application of Latent Semantic Analysis (LSA). Specifically, the impact of ongoing normative changes on the quantity and quality of environmental information is assessed by exploring the annual reports of four pivotal Oil & Gas companies. In addition, the study aims to determine whether a process of homogenisation exists in the release of environmental disclosure, either within a panel or across different entities. The results revealed an increase in the quantity of information released and a slight increase in disclosure quality. Moreover, no evidence of any disclosure homogenisation process was found as the disclosure provided preserved both time‐ and firm‐specific information. Although at an early stage, this research reveals an overall positive effect of the regulatory process on environmental corporate disclosure.

By analysing the case of the International Accounting Standards Board (IASB), this paper aims at assessing the role that political marketing strategies might play to increase the sustainability of private transnational organisations. This paper proposes an integrated conceptual model that draws together political branding theory and political relationship marketing. The proposed model shows how political marketing strategies may help a global standard setter, as well as other private transnational organisations, in achieving higher legitimacy and sustainability in the long-term. By relying upon such a model, an explanatory case study of the IASB is then conducted, providing anecdotal evidence about the IASB’s current political marketing behaviour. By adopting an interdisciplinary interpretative lens, this paper contributes to literature in addressing a theme almost neglected—namely, the role of political marketing strategies in increasing legitimacy and sustainability of transnational organisations, such as global standard setters—notwithstanding the emerging effort made in this direction by private global organisations operating in complex environments, including the IASB. Implications for political marketing theory are also discussed. As to the practical implications, this paper suggests the political marketing strategies and tools that private transnational organisations should adopt to foster their sustainability in the long-term.

In contexts characterized by high ownership concentration, institutional investors may lose their monitoring role and might not be effective in constraining earnings management. So, this study investigates whether directors appointed by institutional shareholders are more effective in inhibiting earnings management for companies with a high ownership concentration, rather than the mere presence of institutional investors. Based on a sample of Italian listed companies, findings suggest a negative relationship between minority directors appointed by institutional shareholders and abnormal accruals, while no relationship is found between the latter and the mere presence of institutional investors. Moreover, results also highlight that the difference between strategic and no strategic institutional investors does not count in a context characterized by high ownership concentration. Overall, this study suggests that institutional investors, regardless of their characteristics, are more effective in constraining earnings management when they can count on an agent on the board of directors.

Purpose: Recent accounting literature claims that private firms’ heterogeneity influences the quality of earnings. Along with certain drivers of heterogeneity, private firms get involved in specific programs aimed at fostering their access to capital, competencies and networks (CCN programs). Such programs can enhance private firms’ exposure to stakeholders that demand higher reporting quality, affecting their financial reporting choices. Therefore, this study investigated whether membership in CCN programs affects private firms’ earnings quality. Design/methodology/approach: Focusing on the ELITE program, an international platform that since 2012 aims to support the growth of the most promising SMEs, and employing different econometric specifications facing endogeneity concerns, this paper carries out a quantitative empirical analysis to test the effect of CCN programs on private firms’ earnings quality. Findings: Employing different earnings quality measures, empirical evidence reveals that firms belonging to CCN programs experienced an improvement in their earnings quality. Research limitations/implications: Even though endogeneity concerns have been addressed, we are nevertheless aware that they might, at least partially, have affected our results. Practical implications: Although the contributions of the study are mostly academic, the empirical evidence obtained also carries practical implications. CCN programs not only act, as one might assume, as catalysts for economic and dimensional growth but also contribute to better earnings quality, mitigating the information asymmetries between firms and their stakeholders. Originality/value: By adding new evidence to the literature concerning the impact of private firms’ heterogeneity on earnings quality, this is the first study to analyze the impact of specific programs aimed at supporting the affiliated SMEs to foster their access to capital, competencies and networks.

The banking system has undergone substantial changes that boosted the relevance of transaction-lending technologies and the role of financial reporting in the bank-firm relationship. Due to the growing emphasis on accounting data, this study investigates the impact of earnings quality on the cost of debt for a sample of SMEs during the global financial crisis. Relying on a sample of Italian non-financial SMEs, empirical findings show a positive relationship between discretionary accruals and the cost of loans, highlighting the negative consequences of low-quality earnings. Further analysis reveals the different impacts that negative and positive abnormal accruals can have on the cost of debt: low values of the former can convey private information and positively affect the response variable, which shows a positive and quadratic relationship with the latter. These findings confirm the increasing importance of hard information in credit markets and point out the significant impact of the quality of the borrowers’ earnings on the cost of debts. However, the distinctiveness of the study from the previous literature relies on evidence that, even during a credit crunch period, financial institutions weigh up the expected return from lending transactions, relying on both the sign and the magnitude of discretionary abnormal accruals as a vehicle to get firms’ private information.