Financial accounting practices and the external environment: a systematic literature review and empirical studies

Abstract

This thesis consists of three studies that focus on Financial Accounting Practices (FAPs) and External Environmental Factors (EEFs) and the relationship that exists between these two elements. The first study provides a systematic literature review (SLR) of FAPs and EEFs, while the relationship between the extent of accounting disclosure (EAD), crime rate (CR), and national culture (NC) is considered in the second study. The third and final study focuses on the link between corporate social responsibility (CSR), religiosity (RLG), and NC. In examining all of the above, this thesis demonstrates how and why a country’s EEFs can influence and/or be influenced by FAPs.

The first study comprehensively reviews the existing literature to explore the different themes within FAPs and EEFs. Using a SLR methodology, the researcher has developed a theoretical and empirical framework that clarifies the causal processes underlying the relationship between FAPs and EEFs. The review has produced 371 articles written between 1941 and 2018. The main findings indicate that a large number of existing studies draw on single rather than multi-theoretical perspectives, as well as focusing on firm-level rather than country-level. Finally, it outlines future opportunities to enrich current understanding of the FAPs–EEFs nexus.

The second study aims to investigate the relationship between: (i) EAD and CR; (ii) CR and NC; and (ii) determine the moderating effect of NC on the EAD–CR nexus. A multi-theoretical framework based on the agency, social and strain theories have been employed in developing this study's hypotheses. Based on an international sample of 142 countries from 2012 to 2018, the results of this study have shown a significant negative influence of CR on EAD. Furthermore, the results have highlighted that NC dimensions are likely to affect the link between EAD and CR.

The final study aims to explore the relationship between: (i) CSR and RLG; (ii) CSR and NC, and (iii) ascertain the moderating effect of NC dimensions on CSR–RLG nexus. Accordingly, research hypotheses have been developed based on a multi-theoretical framework, including agency, social contract and virtue theories. Based on an international sample of 79 countries from 2010 to 2017, the results of this study have shown a significant positive influence of RLG on CSR. In addition, it has provided some evidence that NC dimensions affect the CSR–RLG nexus.

Finally, the results of these studies are robust across different statistical techniques and alternative measurements. The results have important implications for accounting standardssetters, corporate decision-makers, practitioners, regulators and governments.

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Identifiers

ORCID for Collins Ntim: orcid.org/0000-0002-1042-4056

ORCID for Alaa Zalata: orcid.org/0000-0003-2018-4313

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