Professional Accounting For Financial Performance

Research Topic

Discuss about the Professional Accounting for Financial Performance. 

This study deals with research topic on association between voluntary disclosures as well as financial performance of firms. In this particular research, it has been noticed that professional accounting analysis is important for understanding the concept of motivational factors behind the financial performance of business firms. It further explains the measure of Carbon Disclosure Project for checking for the financial performance of associated firms. This particular research is important as it measures the impact of business firm on natural environment and process is the firm’s events for reducing this outcome (Misani and Pogutz 2015). It focuses mainly on specific outcome such as carbon emissions and suggests affects in Tobin’s q non-linear terms. It can be found that business firms achieve highest financial performance in the level of carbon performance on immediate basis (Misani and Pogutz 2015). It is the environment process indicating the relationship in firm reinforcement for viewing at the monetary presentation with enhanced stakeholder supervision. In this research various theoretical aspects is used like motivational factors as well as articles taken from secondary sources title as carbon disclosure projects affecting the financial performance of associated firms. The main issue defined in the research is the number of carbon disclosure project used for viewing at the financial disclosure firms.

Association between the voluntary disclosures and the financial performance of firms

1. What is the motivational factors behind the association between voluntary disclosures as well as financial performance of firms
2. What is the measure of Carbon Disclosure Project enabling for check over the financial performance of firms?

For the purpose of research, the development of null as well as alternative hypotheses can help in examining the nature and importance of the associations between different items of voluntary disclosures and the financial dimension (return on investment) for the listed corporations.

Null: There is no link between the disclosures of the financial information and the return on investment of quoted corporation (H_0: β₁=0)

Alternative: There is an association between financial information disclosures and the financial performance of the firm (H_1: β₂≠0)

Practical motivation is the act of motivating the research participants in understanding the ethical concepts based upon the research questions. On the other hand, theoretical motivation relies mainly on gathering facts regarding the carbon disclosure and  takes into consideration on the financial as well as non-financial measures. Researcher should be equally motivated in performing the research on ethical terms as far as possible. From the above research question, it is important to understand the fact regarding the motivational factors with the research topic. The present topic discuses on the association between the voluntary disclosures and the financial performance of firms

Research Question

This kind of diverse image suggest firm for generalizing the internal costs of poor carbon performance standing for environmental outcomes as well as process for achieving net financial benefits (Misani and Pogutz 2015). These types of result are based upon model of carbon-intensive firm for disclosing the GHG emission with Carbon Disclosure Project.

It is recommended in using incentive theory whereby people are motivated in performing things and gains external rewards at the same time. Behavioural learning concepts involve association as well as reinforcement of activities for gaining attributes from association between financial disclosures for understanding financial position of business organization.

The main purpose of the paper is to examine the case study on organization effort in dealing with disclosing non-financial information. It is for this reason whereby non-financial information by companies discloses environmental as well as social and governance issues for the benefits of the stakeholders and society (Dumay et al 2015). Designing the methodology are investigated by the authors for examining the manner in which two of the main Australia largest companies approach discloses from legitimacy perspective. In this particular article, focus is majorly on material legitimacy and primary concerns for major stakeholders. This model outlines company’s strategies in trying to achieve mutual beneficial outcomes for their ultimate stakeholders for future analysis purpose. Therefore, difficulty is faced in judging the issues for disclosing the material information (Dumay et al 2015). It presents model on legitimacy-influenced disclosure based upon transparency in explain the non-financial information in the most appropriate way.

The current segment presents an important concept of the voluntary disclosures and its association with the financial performance of corporations.

Author	Date	Title	Journal	Type of Paper	If empirical, Sample	100 word summary of contribution to the research question
Eleftheriadis, I.M. and Anagnostopoulou, E.G	2015	Business Strategy and the Environment	Relationship between Corporate Climate Change Disclosures and Firm factors	Journal	No	This article summarizes that carbon directive evolves and dedicated in way of address carbon decrease issues (Eleftheriadis and Anagnostopoulou 2015). On the contrary, stakeholder will mainly demand from the firms in providing increased information in relation with corporate atmosphere change attributes. This particular paper focuses especially to the worldwide investigate that illustrates the connection between ecological in order disclosures as well as supplementary firm factor. Empirical analysis is conducted for understanding the relationship among business climate change revelation practices of firms as planned in Athens Stock Exchange (Eleftheriadis and Anagnostopoulou 2015). It mainly depends upon firm factors like size, advantage as well as profitability and action division. Results indicate that there is important positive connection among size as well as increased corporate disclosures in relation with climate change practices. Addition to that, no significant relationship was detected among corporate environment modify disclosures as well as profitability (Eleftheriadis and Anagnostopoulou 2015).
Luo, L. and Tang	2014	Pacific Accounting review	Carbon Tax, corporate carbon profile and financial return	Journal	No	This particular paper aims in investigating the impact of proposed carbon tax on financial market return in most of the Australian firms (Luo and Tang 2014). It mainly emphasis on differential tax effect especially on individual firms with carbon profiles such as factors cost emission, climate-change policies and carbon disclosure. Methodology used is utilized for event-study method that is examined by the author in examining the marketplace response to seven key carbon governmental informational events in the year 2011 and 2012. This particular sample involves 48 different firms where emissions-related data are obtainable from Carbon Disclosure Project information used for cross-sectional analysis. This paper mainly documents and proves as evident proposed tax for an overall negative impact on investor wealth from irregular returns (Luo and Tang 2014). Negative impact varies from various sectors from materials, financial sectors and industrial. It is found that firm direct carbon coverage measures the Scope 1 emissions and considerably associates with abnormal returns. Scope 2 emission is not enclosed by tax for future analysis purpose. Addition to that, findings majorly suggest informational content of events for developing in the carbon tax purpose (Luo and Tang 2014). This particular article content is limited to the main firms in relation with carbon outline information. Similarly, concern should be exercised for generalizing the inference. Introduction to sensible implications on this article suggests carbon tax that is largely unexpected as well as unprepared for carbon policies. The above statement provides inadequacy and fails in impressing the investors (Luo and Tang 2014). It requires understanding of the carbon tax emissions and its affect on shareholder value. It adds welfare and encourages management in taking proactive actions for mitigating the compliance costs of carbon legislation. Enhancement of the Australian carbon tax mainly represents biggest social as well as economic restructuring events. Main results provide insights by the investors and penalize firms for heavy direct operational emissions (Luo and Tang 2014). Addition to that, Australian corporate carbon policy is an inadequate policy for reversing the negative effect of tax on the valuation of firm.
Depoers, F., Jeanjean, T. and Jérôme	2016	Journal of Business Ethics	Voluntary Disclosure of Greenhouse Gas Emissions: Contrasting the Carbon Disclosure Project and Corporate Reports	Journal	No	It emphasis upon global warming continuation in attracting the growing levels of attention as well as various stakeholder such as states, investors and lobbyists (Depoers, Jeanjean and Jérôme 2016). These have kept climatic changes especially on corporate agendas as well as expecting firms in disclosing relevant greenhouse gas information. In this particular paper, investigation is done on consistent GHG information on voluntary basis by French Listed firms through communication channels like corporate reports as well as Carbon Disclosure Project. Precisely, it is desired in contrasting the amounts of GHG emissions for reporting the methodological explanations in each channel (Depoers, Jeanjean and Jérôme 2016). From stakeholder theory perspective, it can be found that GHG amounts to lowering corporate reports in relation with Corporate Disclosure Project. This mainly suggests that firms for corporate report figures traceability in reducing the discrepancy between disclosures in both the channels (Depoers, Jeanjean and Jérôme 2016). It is suggested for aiming in greater traceability and enhancing information credibility in and across different channels.
Benâ€ÂAmar, W. and McIlkenny	2015	Business Strategy and the Environment	Board Effectiveness and the Voluntary Disclosure of Climate Change Information	Journal	No	This paper mainly examines the connection between board of director’s efficiency as well as voluntary environment modify disclosures (Benâ€ÂAmar and McIlkenny 2015). Although, risk management as well as coverage falls under the board accountability, it relates with board effectiveness for firm decision for responding on voluntary basis to the Carbon Disclosure Project. It involves annual questionnaires and quality of disclosures in relation with climate-change risk and strategies for mitigating it as far as possible (Benâ€ÂAmar and McIlkenny 2015). Results mainly indicate positive relationship connecting board success as well as firm result in answering the CDP survey and carbon disclosure quality. There are various determinants of voluntary climate change disclosures for future analysis purpose. Findings indicate the importance of board of director’s function for attractive in the simplicity and significance of intended disclosure of climatic modify of commerce organization (Benâ€ÂAmar and McIlkenny 2015).
Meng, X.H., Zeng, S.X., Shi, J.J., Qi, G.Y. and Zhang, Z.B	2014	Journal of Environmental Management	The relationship between corporate environmental performance and environmental disclosure: An empirical study in China	Journal	No	This article is base on comfortable study of 533 listed company for examining corporate environmental performance affecting details of environmental disclosures for company. Results indicate mutually poor and good performer for having more disclosures than the center (Meng et al. 2014). In case of mixed performers, it provides empirical evidence for supporting non-linear association between business environmental presentation as well as ecological revelation. Poor performers mainly disclose soft information based upon environmental performance in comparison with good performers disclosing more solid information. Poor performers increases in the disclosures exposing as environmental violators and disclosing any kind of negative environmental information like violation and associated penalties (Meng et al. 2014). This particular study examines the additional evidence in case of maintaining non-linear association connecting ecological presentation as well as discovery in talented market for suggesting environmental disclosure in contemporary China (Meng et al. 2014).
Misani, N. and Pogutz, S.,	2015	Ecological Economics	Unraveling the effects of environmental outcomes and process on financial performance: A non-linear approach	Journal	No	This particular article examines the role of procedure scope of ecological presentation for determination of monetary presentation. It measures the impact of business firm on natural environment and process is the firm’s events for reducing these outcome (Misani and Pogutz 2015). It focuses mainly on specific outcome such as carbon emissions and suggests affects in Tobin’s q non-linear terms. It can be found that business firms achieve highest financial performance in the level of carbon performance on immediate basis (Misani and Pogutz 2015). It is the environment process indicating the relationship in firm reinforcement for viewing at the monetary presentation with enhanced stakeholder supervision. This kind of diverse image suggest firm for generalizing the internal costs of poor carbon performance standing for environmental outcomes as well as process for achieving net financial benefits (Misani and Pogutz 2015). These types of result are based upon model of carbon-intensive firm for disclosing the GHG emission with Carbon Disclosure Project.
Dumay, J., Frost, G., Beck, C.	2015	Journal of Accounting & Organizational Change	Material legitimacy: Blending organizational and stakeholder concerns through non-financial information disclosures	Journal	No	The main purpose of the paper is to examine the case study on organization effort in dealing with disclosing non-financial information. It is for this reason whereby non-financial information by companies discloses environmental as well as social and governance issues for the benefits of the stakeholders and society (Dumay et al 2015). Designing the methodology are investigated by the authors for examining the manner in which two of the main Australia largest companies approach discloses from legitimacy perspective. In this particular article, focus is majorly on material legitimacy and primary concerns for major stakeholders. This model outlines company’s strategies in trying to achieve mutual beneficial outcomes for their ultimate stakeholders for future analysis purpose. Therefore, difficulty is faced in judging the issues for disclosing the material information (Dumay et al 2015). It presents model on legitimacy-influenced disclosure based upon transparency in explain the non-financial information in the most appropriate way.
Plambeck	2012	Energy Economics	Reducing greenhouse gas emissions through operations and supply chain management	Journal	No	This particular article speaks about the experiences from the largest corporation in and around the world. It is those fact from the start-up company showing companies gaining reduced greenhouse gas emissions especially in the supply chains. It is the operation management mentioned in the literature review section for additional opportunities for profitable in reducing emissions in the existing supply chains and providing guidance in expansion of capacity in new “Zero emission” depending in the supply chains. It requires in viewing at the potential for companies in reducing emissions for averting dangerous climatic change at the same time.
Perrault Crawford, E. and Clark Williams	2010	Corporate Governance: The international journal of business in society	Should corporate social reporting be voluntary or mandatory? Evidence from the banking sector in France and the United States	Journal	No	This particular paper aims in investigating country context for presuming firms for greater reporting activity as well as exploring impact of resources in disclosure quality. Findings of this article expecting that countries for higher regulative pressures like France It leads to limited to banking sector for possible means for closely links in the normative cultural pressures in the regulatory contexts
Chapple, L., Clarkson, P.M. and Gold	2013	Abacus	The Cost of Carbon: Capital Market Effects of the Proposed Emission Trading Scheme (ETS)	Journal	No	This particular article announces by the Australian Government for announcing from its intention for introducing the national Emissions Trading Schemen started in the year 2015 It is the impeding development for ideal setting for investigating the impact of ETS especially in Australia on the market valuation in the Australian Securities Exchange

The theoretical structure of the voluntary disclosures includes different elements of the disclosures such as the association based disclosures, discretionary based disclosures and different efficiency based disclosures. Furthermore, there are a number of theories that can relate the voluntary disclosure with the business concerns as well as financiers of the firm (Dhaliwal et al. 2012). These theories include the Agency Theory, Signaling Theory, legitimacy as well as the Stakeholder theories (Arcjournals.org. 2016).

The current study intends to study the nature and characteristics of the association between the voluntary disclosures by the firms and the financial performance of organizations. The present study also presents a theoretical structure that illustrates different elements of disclosures. In addition to this, the study also mentions conceptual framework of the study that refers to the effects of the independent variables such as the general and corporate information, financial information, forward looking information and socio-environmental and board disclosures on the dependent variable that is the financial performance of firms. In addition to this, the analysis of the article one on “Relationship between Corporate Climate Change Disclosures and Firm factors” reveals conclusive findings that indicate the fact that there exists positive association between the size and voluntary disclosures associated to the climate change practice (Eleftheriadis and Anagnostopoulou 2015).  The second article on “Carbon Tax, corporate carbon profile and financial return” put forward argument regarding the fact that the business concerns are penalized for operational emissions and declares the fact that the emission policy is inadequate for reversing different negative effects of tax on the valuation of the firm (Luo and Tang 2014). Therefore, it can be hereby ascertained that the voluntary disclosures can affect the tax assessment and in turn the valuation of the firm. Again, the third article on “Voluntary Disclosure of Greenhouse Gas Emissions: Contrasting the Carbon Disclosure Project and Corporate Reports” discusses the significance of the disclosures on the green house gas through corporate reports and many other channels. This article suggests that greater traceability and enhancement of the credentials of the information across different channels can ensure ethical business practice (Depoers, Jeanjean and Jérôme 2016). Therefore, it can be hereby ascertained that appropriate disclosures can gain the attention of different stakeholders, lobbyists as well as investors. The conformity to the different requirements for disclosures can help in raising the value of the firm. The forth article also represents the positive association between the success of the board and the different disclosures regarding quality (Ben Amar and McIlkenny 2015). The positive association is owing to the fact that the disclosures regarding the climate change risks and the strategies for mitigation of the risk can increase the success of operational activities of the firm and increase its profitability. The fifth article put forward the fact that the environmental performance affects different environmental disclosures of a corporation. This article however, disagrees with the fact that strong disclosures positively affect the financial performance of firm (Meng et al. 2014). On the contrary, the article presents the view that poor performers mainly disclose soft information based upon environmental performance in comparison with good performers disclosing more solid information. Again, the sixth article presents the view that business concerns can attain high level of financial performance owing to the level of the carbon performance on instantaneous basis (Misani and Pogutz 2015). The seventh article concentrates on material legitimacy and transparency in disclosing the material information (Dumay et al 2015). The legitimacy-based disclosures can discuss the non-financial information and can help the users of the information and affect the performance of the firm.

Hypotheses

Luo and Tang (2014) utilizes for event-study method that is examined by the author in examining the marketplace response to seven key carbon governmental informational events in the year 2011 and 2012. This particular sample involves 48 different firms where emissions-related data are obtainable from Carbon Disclosure Project information used for cross-sectional analysis. This paper mainly documents and proves as evident proposed tax for an overall negative impact on investor wealth from irregular returns (Luo and Tang 2014). Negative impact varies from various sectors from materials, financial sectors and industrial. It is found that firm direct carbon coverage measures the Scope 1 emissions and considerably associates with abnormal returns. Scope 2 emission is not enclosed by tax for future analysis purpose. Addition to that, findings majorly suggest informational content of events for developing in the carbon tax purpose (Luo and Tang 2014). This particular article content is limited to the main firms in relation with carbon outline information. Similarly, concern should be exercised for generalizing the inference.

On the contrary, introduction to sensible implications on this article suggests carbon tax that is largely unexpected as well as unprepared for carbon policies. The above statement provides inadequacy and fails in impressing the investors (Luo and Tang 2014). It requires understanding of the carbon tax emissions and its affect on shareholder value. It adds welfare and encourages management in taking proactive actions for mitigating the compliance costs of carbon legislation. Enhancement of the Australian carbon tax mainly represents biggest social as well as economic restructuring events. Main results provide insights by the investors and penalize firms for heavy direct operational emissions (Luo and Tang 2014). Addition to that, Australian corporate carbon policy is an inadequate policy for reversing the negative effect of tax on the valuation of firm.

(Luo and Tang 2014) argues firm factors like size, advantage as well as profitability and action division. Results indicate that there is important positive connection among size as well as increased corporate disclosures in relation with climate change practices. Addition to that, no significant relationship was detected among corporate environment modify disclosures as well as profitability (Eleftheriadis and Anagnostopoulou 2015).

As rightly said by Depoers, Jeanjean and Jérôme (2016), it emphasis upon global warming continuation in attracting the growing levels of attention as well as various stakeholder such as states, investors and lobbyists. These have kept climatic changes especially on corporate agendas as well as expecting firms in disclosing relevant greenhouse gas information. In this particular paper, investigation is done on consistent GHG information on voluntary basis by French Listed firms through communication channels like corporate reports as well as Carbon Disclosure Project. Precisely, it is desired in contrasting the amounts of GHG emissions for reporting the methodological explanations in each channel (Depoers, Jeanjean and Jérôme 2016). From stakeholder theory perspective, it can be found that GHG amounts to lowering corporate reports in relation with Corporate Disclosure Project. This mainly suggests that firms for corporate report figures traceability in reducing the discrepancy between disclosures in both the channels (Depoers, Jeanjean and Jérôme 2016). It is suggested for aiming in greater traceability and enhancing information credibility in and across different channels.

Motivation

Depoers, Jeanjean and Jérôme (2016) suggest risk management as well as coverage falls under the board accountability, it relates with board effectiveness for firm decision for responding on voluntary basis to the Carbon Disclosure Project. It involves annual questionnaires and quality of disclosures in relation with climate-change risk and strategies for mitigating it as far as possible (Benâ€ÂAmar and McIlkenny 2015). Results mainly indicate positive relationship connecting board success as well as firm result in answering the CDP survey and carbon disclosure quality. There are various determinants of voluntary climate change disclosures for future analysis purpose. Findings indicate the importance of board of director’s function for attractive in the simplicity and significance of intended disclosure of climatic modify of commerce organization (Benâ€ÂAmar and McIlkenny 2015).

Depoers, Jeanjean and Jérôme (2016) makes an argument that article is base on comfortable study of 533 listed company for examining corporate environmental performance affecting details of environmental disclosures for company. Results indicate mutually poor and good performer for having more disclosures than the center (Meng et al. 2014). In case of mixed performers, it provides empirical evidence for supporting non-linear association between business environmental presentation as well as ecological revelation. Poor performers mainly disclose soft information based upon environmental performance in comparison with good performers disclosing more solid information. Poor performers increases in the disclosures exposing as environmental violators and disclosing any kind of negative environmental information like violation and associated penalties (Meng et al. 2014). This particular study examines the additional evidence in case of maintaining non-linear association connecting ecological presentation as well as discovery in talented market for suggesting environmental disclosure in contemporary China (Meng et al. 2014). 

Reference List

Arcjournals.org. (2016). Open Access Publications | Best Scientific Journals Online. [online] Available at: https://www.arcjournals.org [Accessed 16 Aug. 2016].

Ball, R., Jayaraman, S. and Shivakumar, L., 2012. Audited financial reporting and voluntary disclosure as complements: A test of the confirmation hypothesis. Journal of Accounting and Economics, 53(1), pp.136-166.

Bamber, L.S., Jiang, J. and Wang, I.Y., 2012. What’s my style? The influence of top managers on voluntary corporate financial disclosure. The accounting review, 85(4), pp.1131-1162.

Benâ€ÂAmar, W. and McIlkenny, P., 2015. Board effectiveness and the voluntary disclosure of climate change information. Business Strategy and the Environment, 24(8), pp.704-719.

Bernard, H.R. and Bernard, H.R., 2012. Social research methods: Qualitative and quantitative approaches. Sage.

Chapple, L., Clarkson, P.M. and Gold, D.L., 2013. The cost of carbon: Capital market effects of the proposed emission trading scheme (ETS). Abacus, 49(1), pp.1-33.

Depoers, F., Jeanjean, T. and Jérôme, T., 2016. Voluntary disclosure of greenhouse gas emissions: Contrasting the carbon disclosure project and corporate reports. Journal of Business Ethics, 134(3), pp.445-461.

Dhaliwal, D.S., Radhakrishnan, S., Tsang, A. and Yang, Y.G., 2012. Nonfinancial disclosure and analyst forecast accuracy: International evidence on corporate social responsibility disclosure. The Accounting Review, 87(3), pp.723-759.

Dumay, J., Dumay, J., Frost, G., Frost, G., Beck, C. and Beck, C., 2015. Material legitimacy: blending organisational and stakeholder concerns through non-financial information disclosures. Journal of Accounting & Organizational Change, 11(1), pp.2-23.

Eleftheriadis, I.M. and Anagnostopoulou, E.G., 2015. Relationship between Corporate Climate Change Disclosures and Firm Factors. Business Strategy and the Environment, 24(8), pp.780-789.

Luo, L. and Tang, Q., 2014. Carbon tax, corporate carbon profile and financial return. Pacific Accounting Review, 26(3), pp.351-373.

Meng, X.H., Zeng, S.X., Shi, J.J., Qi, G.Y. and Zhang, Z.B., 2014. The relationship between corporate environmental performance and environmental disclosure: An empirical study in China. Journal of environmental management, 145, pp.357-367.

Misani, N. and Pogutz, S., 2015. Unraveling the effects of environmental outcomes and processes on financial performance: A non-linear approach. Ecological Economics, 109, pp.150-160.

Perrault Crawford, E. and Clark Williams, C., 2010. Should corporate social reporting be voluntary or mandatory? Evidence from the banking sector in France and the United States Corporate Governance: The international journal of business in society, 10(4), pp.512-526.

Plambeck, E.L., 2012. Reducing greenhouse gas emissions through operations and supply chain management. Energy Economics, 34, pp.S64-S74