Pedro Carmona

The performance of entrepreneurial small‐ and medium‐sized enterprises

Innovation is an important driver of economic growth for it leads to new products and services, enhanced quality, and lower prices. In an increasingly competitive global market, innovation turns out to be essential to secure a viable competitive position. Although there is no perfect correspondence between accounting intangible assets and innovation activities, the association between these two concepts is close enough to take investment in intangible assets as a proxy for entrepreneurship and innovation. To identify differences between innovative and non‐innovative small and medium enterprises in the service industry, both descriptive and statistical analyses are performed on financial data for the period 2007–2009. The results obtained show that, although with some exceptions, innovative firms generally have better economic and financial performance than non‐innovative companies.

The relationship between non-audit fees and audit quality: dealing with the endogeneity issue

Purpose – The purpose of this paper is to explore whether the provision of non-audit services (NAS) by public accounting firms undermines audit quality. The study addresses this question by testing for an association between the provision of consulting services and auditor independence in listed companies. Design/methodology/approach – The authors study if the magnitude of non-audit fees explains variations in earnings management by looking at the joint determination of non-audit fees, audit fees, and abnormal accruals using the SURE-regression estimation method. Findings – Evidence from tested models suggests that audit services quality is uncompromised by the provision of NAS. In other words, high non-audit fees do not necessarily result in poor quality financial reporting. Research limitations/implications – A different research methodology and a different sample (e.g. non-listed companies) may lead to differing results. As the paper analyses only one country, generalizability of the results might be a...

The effects of the provision of consulting services on audit reporting quality

The growing complexity of the global business environment is leading innovative firms to demand further external counselling to better handle rapid change and increasing uncertainty. Likewise, the implementation of new information systems is usually carried out with the help of external advisors. This paper examines whether the provision of consulting services undermines audit reporting quality by testing for an association between advisory services and audit reporting. A cross-sectional logistic regression is estimated to test the relationship between consulting fees and the audit outcome. The evidence suggests that there is no statistically significant association between non-audit fees and audit outcome. This finding is consistent with the idea that audit reporting quality is not impaired by the provision of consulting services.

RISK DISCLOSURE ANALYSIS IN THE CORPORATE GOVERNANCE ANNUAL REPORT USING FUZZY-SET QUALITATIVE COMPARATIVE ANALYSIS

This paper explores the necessary and sufficient conditions of good Corporate Governance practices for high risk disclosure by firms in their Corporate Governance Annual Report. Additionally, we explore whether those recipes have changed during the financial crisis. With a sample of 271 Spanish listed companies, we applied fuzzy-set qualitative comparative analysis to a database of financial and non-financial data. We report that Board of Directors independence, size, level of activity and gender diversity, CEO duality, Audit Committee independence, being audited by the Big Four auditing firms and the presence of institutional investors are associated with high risk disclosure. The conditions included in almost every combination are the presence of institutional investors and being audited by the Big Four. We found similar combinations for 2006 and 2012, while the analysis for 2009 showed the lowest number of causal configurations.O presente artigo investiga as condicoes necessarias e suficientes das boas praticas de Governanca Corporativa para a divulgacao de alto risco, pelas empresas, no Relatorio Anual de Governanca Corporativa. Alem disso, investigamos se tais formulas se alteraram durante a crise financeira. A partir de uma amostra de 271 empresas espanholas cotadas em bolsa, aplicamos uma analise comparativa qualitativa usando conjuntos Fuzzy a um banco de dados financeiros e nao financeiros. Relatamos que a independencia, tamanho, nivel de atividade e diversidade de genero do Conselho de Administracao, a dualidade do Diretor Executivo, a independencia do Comite de Auditoria, o fato de estar sendo auditado pelas Big Four empresas de auditoria e a presenca de investidores institucionais estao associados a divulgacao de alto risco. As condicoes incluidas em quase todas as combinacoes sao a presenca de investidores institucionais e o fato de estar sendo auditado pelas Big Four. Encontramos combinacoes semelhantes para os anos de 2006 e 2012, enquanto a analise de 2009 apresentou o menor numero de configuracoes causais.

Estudio de la divulgación de riesgos en el Informe Anual de Gobierno Corporativo mediante fuzzy-set qualitative comparative analysis

This paper explores the necessary and sufficient conditions of good Corporate Governance practices for high risk disclosure by firms in their Corporate Governance Annual Report. Additionally, we explore whether those recipes have changed during the financial crisis. With a sample of 271 Spanish listed companies, we applied fuzzy-set qualitative comparative analysis to a database of financial and non-financial data. We report that Board of Directors independence, size, level of activity and gender diversity, CEO duality, Audit Committee independence, being audited by the Big Four auditing firms and the presence of institutional investors are associated with high risk disclosure. The conditions included in almost every combination are the presence of institutional investors and being audited by the Big Four. We found similar combinations for 2006 and 2012, while the analysis for 2009 showed the lowest number of causal configurations.O presente artigo investiga as condicoes necessarias e suficientes das boas praticas de Governanca Corporativa para a divulgacao de alto risco, pelas empresas, no Relatorio Anual de Governanca Corporativa. Alem disso, investigamos se tais formulas se alteraram durante a crise financeira. A partir de uma amostra de 271 empresas espanholas cotadas em bolsa, aplicamos uma analise comparativa qualitativa usando conjuntos Fuzzy a um banco de dados financeiros e nao financeiros. Relatamos que a independencia, tamanho, nivel de atividade e diversidade de genero do Conselho de Administracao, a dualidade do Diretor Executivo, a independencia do Comite de Auditoria, o fato de estar sendo auditado pelas Big Four empresas de auditoria e a presenca de investidores institucionais estao associados a divulgacao de alto risco. As condicoes incluidas em quase todas as combinacoes sao a presenca de investidores institucionais e o fato de estar sendo auditado pelas Big Four. Encontramos combinacoes semelhantes para os anos de 2006 e 2012, enquanto a analise de 2009 apresentou o menor numero de configuracoes causais.

Análise de divulgação de risco no Relatório Anual de Governança Corporativa utilizando fuzzy-set qualitative comparative analysis

This paper explores the necessary and sufficient conditions of good Corporate Governance practices for high risk disclosure by firms in their Corporate Governance Annual Report. Additionally, we explore whether those recipes have changed during the financial crisis. With a sample of 271 Spanish listed companies, we applied fuzzy-set qualitative comparative analysis to a database of financial and non-financial data. We report that Board of Directors independence, size, level of activity and gender diversity, CEO duality, Audit Committee independence, being audited by the Big Four auditing firms and the presence of institutional investors are associated with high risk disclosure. The conditions included in almost every combination are the presence of institutional investors and being audited by the Big Four. We found similar combinations for 2006 and 2012, while the analysis for 2009 showed the lowest number of causal configurations.O presente artigo investiga as condicoes necessarias e suficientes das boas praticas de Governanca Corporativa para a divulgacao de alto risco, pelas empresas, no Relatorio Anual de Governanca Corporativa. Alem disso, investigamos se tais formulas se alteraram durante a crise financeira. A partir de uma amostra de 271 empresas espanholas cotadas em bolsa, aplicamos uma analise comparativa qualitativa usando conjuntos Fuzzy a um banco de dados financeiros e nao financeiros. Relatamos que a independencia, tamanho, nivel de atividade e diversidade de genero do Conselho de Administracao, a dualidade do Diretor Executivo, a independencia do Comite de Auditoria, o fato de estar sendo auditado pelas Big Four empresas de auditoria e a presenca de investidores institucionais estao associados a divulgacao de alto risco. As condicoes incluidas em quase todas as combinacoes sao a presenca de investidores institucionais e o fato de estar sendo auditado pelas Big Four. Encontramos combinacoes semelhantes para os anos de 2006 e 2012, enquanto a analise de 2009 apresentou o menor numero de configuracoes causais.