Does climate risk disclosure shape conservatism? The role of earnings quality in the Egyptian context
Abstract The objectives of this study are to (i) examine the relationship between accounting conservatism and climate-related risk disclosure (CRRD) in the context of Egypt, and (ii) look into the moderating role of earnings quality (EQ) in such a relationship. To operationalize CRRD reported by Egy...
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| Format: | Article |
| Language: | English |
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SpringerOpen
2023-11-01
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| Series: | Future Business Journal |
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| Online Access: | https://doi.org/10.1186/s43093-023-00278-1 |
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| author | Tariq H. Ismail Yousra R. Obiedallah |
| author_facet | Tariq H. Ismail Yousra R. Obiedallah |
| author_sort | Tariq H. Ismail |
| collection | DOAJ |
| description | Abstract The objectives of this study are to (i) examine the relationship between accounting conservatism and climate-related risk disclosure (CRRD) in the context of Egypt, and (ii) look into the moderating role of earnings quality (EQ) in such a relationship. To operationalize CRRD reported by Egyptian firms listed in the SP/EGX ESG index across the years from 2018 to 2022, the study uses a manual content analysis as a base for analysis and employs two (OLS) regression models to test the study’ hypotheses. EQ is measured using the cross-sectional modified Jones model, while accounting conservatism is gauged using the C-Score. Additionally, endogeneity checks in robustness tests are performed using system GMM. The findings show no impact of CRRD on the conservative accounting practices of Egyptian firms. However, there is a sizable adverse effect when EQ is used to moderate this association. This finding is consistent with the notion that firms report high levels of climate impacts and have fewer information asymmetry issues. This paper extends disclosure indexes by highlighting the frequent keywords of CRRD used in the annual narrative reports of Egyptian firms. Hence, this study is among the first to explore the moderation impact of EQ on the relationship between CRRD and accounting conservatism in the Egyptian setting. |
| format | Article |
| id | doaj-art-e260abc9c7d8444c81c65a2f523d2cd8 |
| institution | DOAJ |
| issn | 2314-7210 |
| language | English |
| publishDate | 2023-11-01 |
| publisher | SpringerOpen |
| record_format | Article |
| series | Future Business Journal |
| spelling | doaj-art-e260abc9c7d8444c81c65a2f523d2cd82025-08-20T02:59:22ZengSpringerOpenFuture Business Journal2314-72102023-11-019111510.1186/s43093-023-00278-1Does climate risk disclosure shape conservatism? The role of earnings quality in the Egyptian contextTariq H. Ismail0Yousra R. Obiedallah1Department of Accounting, Faculty of Commerce, Cairo UniversityDepartment of Accounting, Faculty of Commerce, Sohag UniversityAbstract The objectives of this study are to (i) examine the relationship between accounting conservatism and climate-related risk disclosure (CRRD) in the context of Egypt, and (ii) look into the moderating role of earnings quality (EQ) in such a relationship. To operationalize CRRD reported by Egyptian firms listed in the SP/EGX ESG index across the years from 2018 to 2022, the study uses a manual content analysis as a base for analysis and employs two (OLS) regression models to test the study’ hypotheses. EQ is measured using the cross-sectional modified Jones model, while accounting conservatism is gauged using the C-Score. Additionally, endogeneity checks in robustness tests are performed using system GMM. The findings show no impact of CRRD on the conservative accounting practices of Egyptian firms. However, there is a sizable adverse effect when EQ is used to moderate this association. This finding is consistent with the notion that firms report high levels of climate impacts and have fewer information asymmetry issues. This paper extends disclosure indexes by highlighting the frequent keywords of CRRD used in the annual narrative reports of Egyptian firms. Hence, this study is among the first to explore the moderation impact of EQ on the relationship between CRRD and accounting conservatism in the Egyptian setting.https://doi.org/10.1186/s43093-023-00278-1Carbon disclosureC-ScoreModified Jones modelContent analysisEGX |
| spellingShingle | Tariq H. Ismail Yousra R. Obiedallah Does climate risk disclosure shape conservatism? The role of earnings quality in the Egyptian context Future Business Journal Carbon disclosure C-Score Modified Jones model Content analysis EGX |
| title | Does climate risk disclosure shape conservatism? The role of earnings quality in the Egyptian context |
| title_full | Does climate risk disclosure shape conservatism? The role of earnings quality in the Egyptian context |
| title_fullStr | Does climate risk disclosure shape conservatism? The role of earnings quality in the Egyptian context |
| title_full_unstemmed | Does climate risk disclosure shape conservatism? The role of earnings quality in the Egyptian context |
| title_short | Does climate risk disclosure shape conservatism? The role of earnings quality in the Egyptian context |
| title_sort | does climate risk disclosure shape conservatism the role of earnings quality in the egyptian context |
| topic | Carbon disclosure C-Score Modified Jones model Content analysis EGX |
| url | https://doi.org/10.1186/s43093-023-00278-1 |
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