This paper explores how institutional logics influenced the preparedness of 229 Portuguese public sector entities to transition to an IPSAS-based accounting system. Using a novel entity-level proxy capturing the ‘middle-phase’ between adoption and implementation, we find that financial accounting logic significantly enhanced preparedness, especially when combined with market logic. These effects weakened when coercive pressures declined, revealing strategic compliance behavior. Contrary to expectations, IPSAS logic alone did not drive engagement, thereby challenging legitimacy-based adoption explanations. Group logic positively influenced the initiation of preparedness efforts. The academic qualifications of staff leading the transition, and the entity’s subsector, also shaped levels of preparedness, highlighting the importance of organizational context and formal education. Overall, the findings provide new insights into how institutional logics shape reform trajectories. The proxy developed offers a practical diagnostic tool for regulators and policymakers, particularly in jurisdictions initiating IPSAS or similar accounting reforms.

ABSTRACT In this essay, I will discuss whether the conventional wisdom of auditing is well suited to address the most pressing challenges facing the audit profession. I argue that some of the classic foundations of auditing may need to be reconsidered and adapted if the profession is going to retain its role as a trusted third-party assurance provider. The specific issues considered in this essay include the role of university education for entering the profession, the nature of standardization in the audit process, the impact of auditor tenure on audit quality, the underlying difficulties of achieving independence, the nature of the expectation gap, and the appropriate role of audit regulation and enforcement. While not complete, I use these issues to offer some observations about how evolution in our thinking about these core concepts may be needed for business, markets and societies to continue to instill trust in the assurance we provide.

ABSTRACT We celebrated in 2023 twenty years since the launching of Accounting in Europe (AinE). Nerantzidis and Vatis (2024, Twenty years of accounting in Europe: A bibliometric analysis, Accounting in Europe) look back at our history through the lenses of a bibliometric analysis and highlight the most impactful articles and the vivid network of authors of our journal. They also identify the major thematic clusters and the research trends published in AinE. Following Walton and Evans (2013, Accounting in Europe – 10 years on. Accounting in Europe, 10(2), 163–173. https://doi.org/10.1080/17449480.2013.840425) editorial published a decade ago, the past three editors of the journal reflect in this editorial on the evolution of our journal in the last decade. The objective is to complement Nerantzidis and Vatis (2024, Twenty years of accounting in Europe: A bibliometric analysis, Accounting in Europe) with an insiders’ perspective and to tell ‘the story behind the numbers’.

Building upon Role Theory, Agency Theory, and Experiential Learning Theory, this study explores the ethical viewpoints of earnings management (EM) across various professional roles within the accounting and finance profession in Turkey. Employing survey methodology and in-depth interviews, data were collected from educators, students, accountants, and auditors to provide insights into the ethics of EM, enhancing understanding and informing more ethically grounded practices within accounting and finance. This study identifies not only traditional opportunistic and informative forms of EM but also unveils strategic and deceptive dimensions, reflecting diverse ethical interpretations across professional roles. It posits that perceptions of EM's ethicality differ among stakeholder groups, influenced by professional roles and experience. Findings reveal that students have more lenient views due to limited experience, whereas auditors and accountants exhibit stricter stances, shaped by practical exposure. Educators influence these perceptions, highlighting the need for enhanced ethical guidance in education and practice.

This study analyzes whether International Financial Reporting Standards (IFRS) adoption and the presence of Big Four auditors affect the earnings quality of UK private small and medium-sized enterprises (SMEs). Using data covering 2011–2018, we show that IFRS adoption is not significantly associated with earnings quality. This may be because SMEs’ smaller size and simpler business model mean that only a few accounting rules are relevant for them. The high quality of UK domestic accounting standards may also explain this result. Furthermore, we find that the presence of Big Four auditors results in lower earnings quality, in contrast to prior research results. The advisory role played by Big Four auditors for SMEs and UK tax authorities’ less monitoring of financial statements may contribute to this result. Our findings offer new insights into the potential impact of IFRS adoption on private SMEs’ earnings quality and suggest that policymakers aiming to enhance earnings quality should carefully consider the advisory role of auditors in SMEs’ financial reporting.

In this essay, we discuss the factors influencing the likelihood of convergence in corporate sustainability reporting. We identify several factors that negatively influence the probability of convergence in the short term. The first factor is the heterogeneity of concepts and definitions surrounding sustainability (e.g. ESG, CSR). This heterogeneity of definitions is pervasive at three levels: (1) across organizations claiming legitimacy in sustainability reporting standard-setting, (2) within standard-setting organizations over time, and (3) across firms reporting about their activities. A second factor is the large number of organizations claiming legitimacy in sustainability reporting. A third factor is related to a diversity of reporting requirements among three influential international standard setters (i.e. EFRAG, ISSB, SEC), leading to various corporate reporting choices. A fourth factor is the diversity in the objectives of standard-setting organizations. Overall, we believe that due to these sources of diversity, the probability of convergence in sustainability reporting appears limited, at least in the short term, although we identify progress in carbon emissions reporting.

ABSTRACT IFRS 9 requires the recognition of expected credit losses from the inception of a financial instrument, resulting in so-called day-one losses. The incorporation of day-one losses caused considerable controversy among the IASB members and its constituents. With a focus on the constituents’ positions and reasoning, this study portrays the discussions held in the comment letters received by the IASB during the drafting process. We find that most constituents initially rejected day-one losses as conceptually unsound and/or as inappropriately affecting investors’ and preparers’ decision-making. Despite these continuing concerns, the majority of constituents eventually accepted day-one losses as a pragmatic approximation of expected credit losses in the absence of superior alternatives. Considering the technical and political nature of standard setting, our analysis provides insights into the constituents’ assessment of departures from the Conceptual Framework and the constituents’ views on the standard setters’ responsibilities regarding financial stability after the financial crisis.

ABSTRACT We analyze the impact of Small Blockholders’ (SBH – with 5% to 10% of voting rights) heterogeneity and their access to private information on the demand for audit services. By promoting enhanced audit services, we expect SBH to have a moderating effect on the relation between Large Blockholders (LBH – more than 10% of voting rights) and audit fees in a context of low shareholder protection. Drawn on Swiss public firm data over the 2002–2019 period, our results show that the presence of SBH flattens the concave relation between ownership concentration and audit fees found in prior studies. This moderating effect is mainly driven by the uninformed SBH, who given their lower – compared with informed SBH – access to private channels of information, are more likely to rely on audited public financial statements. Our findings contribute to the literature on the role of SBH in the company’s corporate governance.

This study investigates the non-financial disclosure in an Italian banking group following Directive 2014/95/EU over a period of eight years, from its voluntary (2013–2017) to mandatory (2018–2020) implementation. The paper relies both on primary and secondary data sources. It first adopts a content analysis on non-financial reports while considering other relevant available material. Second, the study relies upon semi-structured interviews and seminars to gather primary data. The analysis has been interpreted in light of institutional theory in order to understand the institutional forces driving non-financial disclosure. Results show that non-financial disclosure significantly increased in quantity after the regulation; however, the improvement in quality is fairly low, with the exception of themes relevant to the company under investigation. Through the lens of institutional theory, it emerges that an interplay of institutional mechanisms co-existed within the bank, during two periods of reporting for different topics of disclosure.