Irene M. Gordon

An examination of social and environmental reporting strategies

The purpose of this study is to examine three electric utilities, two publicly owned and one privately owned. The basis of this examination is legitimacy theory employing a small sample case‐type approach. In particular we are interested in social and environmental disclosures found in annual reports and how these disclosures differentiate between publicly owned and privately owned enterprises. In our examination we use some traditional efficiency measures but we also employ effectiveness measures relying on the proprietary costs and information costs views in our analysis. Our major findings are that ownership status and size, which are likely to affect legitimacy, influence the amount of social and environmental disclosure. Finally, while environmental disclosures seem to be related to information costs and benefits, this relationship does not seem to hold for social disclosures.

Further Evidence on the Role of Gender in Financial Performance

Using a sample of 160 sole proprietors and controlling for other determinants of performance, we hypothesize and find support for the view that gender is not a significant direct explanation of financial performance differences among small accounting practices. The control variables we employ are practice characteristics, motivations, and individual owner characteristics. Our results indicate that although financial performance appears to be significantly different for females’ and males’ sole proprietorships, these performance differences are explained by several variables other than gender directly. At the same time we find that gender moderates the effects of other practice and personal characteristics on financial performance. One of the more interesting results is that women with a stronger motivation to establish a public practice to balance work and family experienced more positive financial outcomes, while for men the same motivation reduced financial performance.

The accounting-economics interface: where the market fails

The conclusion of this paper is that market prices fail to reflect the information required to provide meaningful accounting measurements that are used in real‐life decision making. This failure is due to the employment of an “ideal” economic world’s assumptions that do not, and cannot, fit the real world of business. The argument in the paper begins with a discussion of the ideal market as envisioned by the Chicago School and outlined in Tisdell (1995). From this ideal market characterization, it is argued that even Adam Smith recognized the existence of external effects resulting from certain social undertakings. In addition to externalities, two other market failures are discussed: the use of efficiency measures while ignoring effectiveness measures; and the emphasis on the short‐term time horizon at the expense of the longer term.

Corporate ethical lapses: do markets and stakeholders care?

Purpose The purpose of this paper is to assess if a firm’s ethical lapses, which result from unethical behavior or actions, influence its social disclosure (SD) practices as well as how ethical lapses affect both the firm’s legitimacy within society and its standing in financial markets. This study addresses two-related questions: do a firm’s ethical lapses undermine the credibility of its SD in financial markets, either directly or through a firm’s legitimacy? Do ethical lapses affect a firm’s market value and is this effect mediated by SD and legitimacy? Design/methodology/approach Three hypotheses are derived based on two theoretical approaches, information economics and institutional theory. The hypotheses lead ultimately to an examination of a firm’s legitimacy. Ethical lapses are inspired by the Global Reporting Initiative grid and by ISO 26000. Findings The results suggest that a firm’s ethical lapses underlie its SD practices and affect its legitimacy and standing in financial markets, the latter being proxied by financial analysts’ forecasts. Research limitations/implications The limitations of this study include that alternative ways exist to measure the constructs employed, the measurement of SD is subject to discretionary choices, and the North American sample results may not be generalizable to other countries. Originality/value The originality and contributions of this study are based on the use of information economics and institutional theory in a complementary way that recognizes information as serving various purposes and constituencies. Additionally, the paper extends prior research on the SD aspects of CSR by showing it matters to both financial markets and non-financial stakeholders.

Anatomy of a journal: A reflection on the evolution of Contemporary Accounting Research, 1984–2010

Our study outlines the evolution of a highly rated accounting journal, Contemporary Accounting Research (CAR). We examine two tensions (high quality, global journal versus Canadian authorship and homogeneous versus diverse research) that arose during CAR’s history, using Canadian Academic Accounting Association documents (CAAA) and evidence from the main articles published in CAR’s first 27 volumes. We address three research questions relevant to exploring the identified tensions: Where have CAR’s published authors been concentrated in terms of geographical location? What types of research have been published in CAR over the period? How well has CAR succeeded in meeting its original and later editorial objectives? With respect to published main articles, our findings indicate that being a high quality, global journal has won over promoting Canadian authors and that articles published in CAR tend to be more homogeneous than might be expected from the original objectives and later editorial statements. Our findings should be relevant to those interested in the history of accounting research and to those trying to publish in CAR.

Factors That Affect Understanding of Social Responsibility Accounting

Many social responsibility/sustainable development (SR/SD) issues affecting accounting policies and standards will have to be addressed by present and future accountants. This paper investigates qualitative factors that may impede the learning of, and attitudes toward, SR/SD. While Gordon (1998) examined exposure to SR/SD, the present study contributes to the literature in several ways. First, to overcome one of the limitations of Gordons study, noted by her, matched pair responses (n = 198) to pre- and post-study questionnaires are employed in this study. These responses are analyzed using t-statistics, cluster analysis, and multivariate analysis. Second, three factors not previously examined that may affect learning of SR/SD (number of economics courses taken, gender, and grade point average) are explored in this paper. The positive conclusion is that exposure to SR/SD had more influence on learning, understanding, and attitudes than did pre-existing demographic and educational background variables with the exception of grade point average. As a surrogate for intelligence or ability to learn, grade point average was found to be highly significant in a multivariate model. An appreciation that ability to learn affects understanding and attitudes is important for instructors in both continuing professional education and university/college accounting.

Review of SOX in the business ethics literature

This paper aims to examine the impact of the Sarbanes–Oxley Act of 2002 (SOX) on the academic business ethics literature with the intent of making this research more accessible to those researchers and practitioners working in business ethics and other related fields. Specifically, the authors outline the types and scope of SOX-related research, examine the extent of reliance on SOX, identify which theoretical frameworks and research approaches are used and point out under-researched areas.,Using a descriptive approach, the authors examine the theoretical perspectives, classifying these perspectives into four groupings (economics, ethics/moral, psychological and sociological). Using counts, categorization and content analyses, the authors provide an overview of 115 articles with further analysis provided for articles relying heavily (n = 14) or moderately (n = 42) on SOX.,Whistleblowing and codes of ethics are well-researched topics. However, employment of some theories (e.g. signaling theory and stakeholder theory) and qualitative approaches are used less often. Other under-researched issues in the sample include CEO/CFO certifications, cost of compliance, auditor disclosures and empirical investigation of SOX and auditor independence (or corporate culture).,The authors’ decision to use certain databases, search terms and research methods, and to focus on business ethics journals and English language articles are possible limitations.,The authors’ contributions comprise an examination of the scope of SOX topics and detailing how reliant the research is on SOX. The authors identify trends in this literature and provide evidence of the broad theoretical frameworks to better understand the breadth and depth of theories used.

Success Without Upward Mobility: Evidence from Small Accounting Practices

Abstract Small businesses face unique challenges, including how success is defined. Understanding how different small business owners define success provides an alternative lens to help explain entrepreneurship and how to evaluate the efficacy of a small enterprise. Because some traditional measures of success (for example, promotions, salary increases) are unavailable to these business owners, we describe and explore the definitions of and relationship between business and personal success. We examine survey responses from a sample of sole proprietors of accounting practices. Controlling for business and personal characteristics, we find that two factors, Client Satisfaction and Personal Success, are most important in defining business success while personal success is more closely related to the business success factor of Personal Success than to Client Satisfaction.