Revista Contabilidade & Finanças (RC&F) is an open access journal, free of charges for authors and readers, published every four months and held by the Department of Accounting and Actuarial Sciences at the University of São Paulo School of Economics, Business Administration and Accounting. Under its previous name Caderno de Estudos, the journal has been published since 1989, with financial support from FIPECAFI – Foundation Institute for Accounting, Actuarial and Financial Research. The journal has been concomitantly published online in English. RC&F has the mission of disseminating original, unpublished and relevant scientific output in the area of Accounting, Auditing, Actuarial Sciences and Finance, produced by academics, researchers, students and professionals within Brazil and outside it, selected exclusively on the basis of quality and effective contribution to the development of scientific knowledge in these fields. Objectives The principal objectives of RC&F are: - Disseminating relevant knowledge in the areas of Accounting, Auditing, Actuarial Sciences and Finance; - Encouraging and provoking reflections on relevant themes for the area, the academic community and society; and - Achieving national and international recognition as a means of communicating research studies. Updated: 01/05/2023
Universidade de São Paulo. Faculdade de Economia, Administração, Contabilidade e Atuária
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Company valuation practices in the mergers and acquisitions market in Brazil
This article aims to highlight valuation practices in the mergers and acquisitions market of an emerging market country such as Brazil. There is a lack of analysis on the specifics of valuation practices in an emerging market that is not restricted to a specific niche or professional association. Additionally, the scope of the questionnaire was expanded. The results provide important insights into valuation practices in Brazil’s mergers and acquisitions market. This study is relevant for appraisers, shareholders, and company directors who adopt inorganic growth strategies, as well as tax authorities because goodwill is tax-deductible in the event of a merger by the acquirer. A structured questionnaire with predefined answers was administered to professionals involved in valuations, and distribution and correspondence analyses were performed. The results indicate that there is no common practice among appraisers, though there is greater similarity among professionals from financial advisory and consulting firms. The results suggest that transactions may occur at prices higher than the fair value of the acquired company, particularly among strategic investors. Approximately 15% of the appraisers report being influenced by the herd effect. Most consider additional premiums beyond the conceptual basis of the Capital Asset Pricing Model, which are mainly supported by the appraiser’s private knowledge. However, strategic investors do not appear to consider these premiums, as they are more concerned with the representativeness of the perpetual period. Further discussion is needed on cognitive biases and other factors that may influence pricing in mergers and acquisitions, as well as conceptual and methodological errors that may occur in the valuation process.
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The ESG dilemma in emerging markets: Performance, uncertainty, and market turbulence
This study examines the risk-return dynamics of equity funds in emerging markets with five- and one-globe ratings from Morningstar, with a focus on Brazil, Chile, India, Mexico, and South Korea. This research contributes to the growing body of literature on funds of funds (FoFs) in emerging markets by analyzing synthetic environmental, social, and governance (ESG) and non-ESG portfolios. The findings contribute to the debate on the effectiveness of ESG, showing that its performance depends on the local market structure, policy risk, and economic context. The study offers a novel perspective on how ESG fund performance shifts under macroeconomic stress in emerging markets within the context of global capital allocation, integrating multifactor models with nonlinear regime-switching techniques. Using the FF4 and FF5 models, we compare five- and one-globe fund portfolios (Morningstar Sustainability Rating). We extend these models using GEPU, VIX, and WTI indices to assess economic uncertainty. Finally, we apply Markov-switching regressions to capture regime shifts and nonlinear effects across volatility periods in each market. Using the FF4 and FF5 models, we examine five emerging markets (Brazil, Chile, India, Mexico, and South Korea) from September 2018 to September 2024 (73 observations) and find that market risk dominates across markets while size and value matter in India and Mexico. Brown funds in Brazil and Mexico benefit from oil price shocks, indicating their reliance on fossil fuels. Green funds in Chile and Mexico perform better under stable conditions. ESG funds are more sensitive to volatility, while brown funds are more resilient during crises. In Brazil and India, brown funds outperform, particularly during periods of high volatility (MS model). In Chile and Mexico, green funds perform better in calm markets. In South Korea, no significant differences were found, though green funds outperformed in the FF4 and FF5 models.
Effects of familiarity, task complexity, and preparer experience on revenue recognition
This study examines how familiarity with accounting standards, task complexity, and preparer experience influence accountants’ judgment and decision-making (JDM) regarding the accounting for revenues from contracts with customers. Recognizing the impact of familiarity with standards and experience on accounting decisions enables organizations to invest in preparer training and development, ensuring preparedness for new standards and complex tasks. Understanding how familiarity with accounting standards and preparers’ experience influence accounting decisions improves the transparency and reliability of financial reports, which benefits investors, regulators, and stakeholders by reinforcing corporate governance and market stability. The experiment employed a 2×2 design that manipulated familiarity with accounting standards (International Accounting Standard [IAS] 18 vs. International Financial Reporting Standards [IFRS] 15) and task complexity. Financial statement preparers completed a revenue accounting task. We compared the participants’ decisions using an analysis of variance and variance ratio tests to measure noise in judgments between participants in the four groups. Additionally, we measured the preparer’s experience based on their length of experience in the accounting profession. The results indicate that familiarity with the standards and task complexity did not significantly affect decision-making. However, greater familiarity with a standard led to more varied decisions. Interestingly, even in complex tasks, familiarity with a standard increased decision variability. Moreover, less experienced preparers exhibited greater variability in their decisions between complex and non-complex tasks than more experienced preparers did. These findings suggest that financial statement preparers in Brazil are adapting to new standards and highlight the impact of experience on the effect of task complexity on accounting judgment.
Relationship between tax avoidance and managerial ability: the moderating role of risk management
The aim of this study was to assess the moderating role of corporate risk management in the relationship between managerial ability and tax avoidance. Previous studies have focused on the variation in the level of tax avoidance among companies through personal characteristics of managers, such as managerial ability, with mixed results. This study questions whether corporate risk management can explain these mixed results by influencing the relationship between tax avoidance and managerial ability, which provides advancement in the understanding of the determinants of tax avoidance. The study highlights the relevance of the risk management process in defining tolerance and appetite for tax risk, facilitating the capitalization on opportunities to reduce tax expenses with the consequent increase in organizational performance. It shows that the interaction between managerial ability and risk management has different effects on tax avoidance practices that generate permanent differences compared to practices that generate temporary differences, which can be useful for managers, auditors, investors, regulators, and other stakeholders interested in corporate tax avoidance. This study applied the regression analysis technique estimated by the Ordinary Least Squares (OLS) method on a sample of non-financial Brazilian listed companies for the period from 2016 to 2021. Tax avoidance was measured by the Total Book-Tax Differences (Total BTD) and its components, Temporary BTD and Permanent BTD. Managerial ability was measured according to Demerjian et al. (2012), and risk management, according to the Enterprise Risk Management Index (ERMI), proposed by Gordon et al. (2009). The results suggest that risk management improves internal and external communication and provides managers with information to make more efficient tax decisions. They also highlight that, in companies with better risk management processes, managers with higher managerial ability choose to engage only in more aggressive tax strategies, which result in permanent differences.
The effect of CEO characteristics on executive compensation
The aim of this research was to investigate the relation between the characteristics of Chief Executive Officers (CEOs) and the executive compensation of Brazilian companies listed on the stock exchange. The Upper Echelons Theory (Hambrick, 2007) already pointed to a possible combined effect between characteristics and executive compensation. In Brazil, this relation became feasible only with the disclosure requirement established by the Securities and Exchange Commission of Brazil (CVM) Instruction No. 480/2009. Thus, this research contributes to theory and Brazilian literature by exploring this relation. The findings are relevant because they highlight potential criteria used by companies in determining CEO salaries and contribute to explaining variations in executive compensation. Additionally, they provide empirical evidence on which executive characteristics are valued and better compensated in an emerging market. The findings have practical and theoretical implications. For companies, they guide salary policies by showing which characteristics of CEOs influence compensation, aligning incentives with organizational strategy. For academia, they shed light on the determinants of compensation. In the Brazilian context, they reveal how the attributes of CEOs affect their compensation, contributing to an understanding of the impact of executives on organizations. To analyze the models, we used the Generalized Method of Moments (GMM-Sys). Specific attributes of CEOs influence compensation. Education aligned with the business leads to an increase in total compensation, age influences fixed compensation, and duality influences variable compensation. On the other hand, family ties reduce variable compensation, and gender seems to be irrelevant. The results contribute by highlighting these characteristics as determinants of compensation and by showing the combined effect between characteristics and executives’ total, fixed, and variable compensation.
From voluntary adoption to exogenous shocks in management accounting research
Enhancing earnings quality: Effects of internal control weaknesses and key audit matters
This paper aims to determine whether the expanded audit report, specifically the adoption of International Standard on Auditing (ISA) 701, influenced earnings management (EM) in the Brazilian capital market, particularly in firms with publicized internal control weaknesses (ICW). Previous research has not thoroughly explored the impact of ISA 701 on EM in the context of Brazilian firms with ICW. We address this gap by examining how enhanced audit disclosures affect earnings quality (EQ). Thus, this study is relevant for regulators, researchers, market participants, auditors, and managers. It provides insights into how audit regulations, such as ISA 701, can improve the quality of financial reporting and reduce opportunistic EM behaviors. The analysis shows that ICWs elevate EM, while ISA 701 mitigates this by enhancing transparency through key audit matters (KAM). ISA 701 also moderates EM in firms with past ICWs, emphasizing its regulatory impact. We emphasize the importance of timely and adequate disclosure by auditors and managers. Using an econometric approach, we analyzed data from 240 Brazilian listed companies from 2010 to 2019. The methodology included descriptive statistics, correlation analyses, regression analyses, and differences-in-differences tests. Ordinary least squares (OLS) regressions were used to assess the impact of ISA 701 adoption on EQ proxies. Our study finds that Brazilian companies with ICW engage in EM through discretionary accruals more than others. The adoption of ISA 701 led to a reduction in EM, especially in firms with ICW, indicating improved EQ. These findings highlight the relevance of ICW and KAM disclosures for monitoring EM.
Fifty years of accounting research in Brazil: main contributions and future directions
This study identifies the characteristics of the most impactful Brazilian scientific contributions to the qualified international accounting literature, 50 years after the creation of their first graduate program. A historical assessment is relevant for revealing the main Brazilian research contributions to the accounting sciences in 50 years, allowing reflections on structures and events, a better understanding of social transformations, enabling evaluation and reflection of the area, and the detection of indicators, trends, and biases. The focus on local issues suggests an international interest in accounting practices in emerging economies such as Brazil. This research is relevant as a landmark of the main Brazilian contributions to accounting science, allowing local actors to reflect on successful research approaches and the contributions and topics with the greatest impact. This analysis can benefit accounting researchers in Latin countries and/or emerging economies with a research agenda that expands the impact of research performed in the Brazilian context and motivates new international partnerships. This review was performed on papers published from 1970 to 2020 in Scopus and Web of Science databases. These articles were subjected to a systematic literature review to identify their characteristics, the main topics covered, the most representative thematic areas, their main contributions and directions for future research. Brazil has published 39 articles with a relevant impact on international literature, mostly in the 2000s. Significant contributions were found in controllership, management accounting, and financial accounting. Topics such as performance management, costs and agribusiness, earnings management, disclosure and International Financial Reporting Standards (IFRS) adoption were particularly noteworthy. Partnerships with authors from developed countries have been important in enabling publications with international impact.
Accounting conservatism and COVID-19 restriction measures: An analysis in Latin America
The study analyzes the relationship between the restrictive measures adopted by Latin American countries to combat COVID-19 and the level of corporate conservatism. Considering that, to date, there is no empirical evidence examining the relationship between restrictive measures and corporate conservatism, the scarcity of previous studies in this area highlights the originality of this work. This study provides insights for policymakers since understanding how restrictive measures affect accounting practices can inform decisions related to crisis management. In addition, investors and managers can benefit from the study by understanding how the measures implemented by public agents and conservatism are interconnected. Understanding the dynamics of accounting conservatism in the face of the economic and social challenges generated by the COVID-19 pandemic is essential to guide more adaptive and effective accounting practices in crisis contexts, promoting transparency and reliability of accounting information for the benefit of stakeholders. The study sample includes countries with the leading stock exchanges in Latin America (Argentina, Brazil, Chile, Colombia, Mexico, and Peru). Data were obtained from Thomson Reuters Eikon and the Oxford COVID-19 Government Response Tracker (OxCGRT) from 2014 to 2021, and analyses were performed using regressions with panel data. The main results indicate that companies in less restrictive countries presented a more conservative stance in their financial statements. However, there was no evidence that the restrictive measures significantly impacted conservatism. Thus, this study contributes to the literature in the area by providing the first empirical evidence of the effect of COVID-19 restrictive measures on the level of accounting conservatism.
Tax complexity and corruption: An analysis of Latin American countries
The objective of this article was to identify the relationship between tax complexity and corruption in Latin American countries. The relationship between tax complexity and corruption has been demonstrated in previous studies. However, no study has analyzed this relationship considering five dimensions of corruption for the Latin American context. The study therefore fills a gap and contributes to the study of the phenomenon by identifying the correlations between different representations of corruption and tax complexity in Latin American countries. The study contributes to government agendas and actions to simplify and modernize the tax system. Moreover, corruption is a long-standing problem in Latin America. Therefore, understanding and discussing it is a fundamental step for academia to use its expertise to support political, cultural and social change. This study contributes by providing evidence on the characteristics of the tax system that Latin American countries should act on to reduce its complexity in order to achieve greater social justice and reduce corruption. The generalized method of moments (GMM) model was used to regress tax complexity, measured by World Bank variables, and corruption, measured by the Corruption Perception Index and four of its constituent constructs, from 2005 to 2019. The results suggest that countries with higher levels of tax complexity have higher levels of corruption. Moreover, countries with higher tax rates on profits and more separate taxes also have higher corruption rates on average. Furthermore, countries with higher levels of democratic accountability have lower levels of corruption. This research contributes to the advancement of the literature by highlighting the phenomenon, relying on the methodologies, variables and premises adopted by the main investigations carried out in the field, in the light of the theory of fiscal illusion.
The role of environmental, social, and governance (ESG) in accounting conservatism: Evidence from Brazil
This study investigates whether there is an association between environmental, social, and corporate governance (ESG) performance and the demand for accounting conservatism in companies listed on the Brazilian Stock Exchange. Recognizing that conservative accounting practices often arise from stakeholders’ concerns about earnings management and information asymmetry – conditions that differ from those of socially responsible companies – this paper explores the relationship between ESG performance and accounting conservatism. This study examines accounting conservatism as a principle of information quality, particularly within the framework of mechanisms such as ESG performance that mitigate information asymmetry. Despite Brazil’s weak enforcement profile, limited general credit availability, and high ownership concentration, the country is globally recognized for its adoption of Sustainability Accounting Standards Board (SASB) reporting standards. These conditions reinforce our assumption and highlight the significance of this study. There is a notable paucity of research investigating the correlation between ESG performance and accounting conservatism in Brazil, especially given the country’s unique regulatory and economic landscape. This study addresses this gap by providing a critical perspective on the interplay between ESG and accounting conservatism. Our findings have substantial practical, social, and environmental implications. Effective disclosure of ESG practices not only enhances the quality of reported information but also increases stakeholder credibility, enabling investors and other stakeholders to make more informed and assertive decisions. We estimate conservatism according to the model proposed by Ball and Shivakumar (2005), and in the main analyses, we use ordinary least squares (OLS) regression and quantile regression methods with robust standard errors and fixed effects for industry and years. Our research indicates that higher ESG performance leads to increased conditional accounting conservatism in the following year. This finding suggests that robust ESG reporting enhances the quality of information available for decision-making, thereby reducing information asymmetry between the company and its stakeholders while bolstering its reputation.
Academic careers of Accounting teachers: Generational evidence in Liquid Modernity
The aim of this article is to discuss the early academic career experiences of accounting teacher-researchers belonging to Generations Y and Z in the light of Liquid Modernity. Accounting careers have been studied from a biological, linear and traditional perspective. This study extends this view by placing it in a non-linear perspective for subjects belonging to Generations Y and Z, immersed in Liquid Modernity. This investigation, therefore, represents a contemporary research approach and allows the construction of explanations for the transformation of the social landscape of a profession. Changes in the configuration of a profession occur through contextual changes. In this process, the liquidity discussed by Bauman (2001) makes it possible to explain the scope and evolution of the public and private lives of individuals belonging to Generations Y and Z at the beginning of their academic careers in accounting, in terms of the construction of their professional trajectories and their projects in socio-academic spaces. The research presents a systematization of elements of Liquid Modernity to explain the academic career in accounting from a non-linear perspective. It also provides the practical field with an explicit mapping of the activities to be practiced in an academic career in accounting and the position of Generations Y and Z in relation to them. The research is qualitative and is based on semi-structured interviews with 16 teachers belonging to Generations Y and Z. After the interviews were conducted, they were transcribed and processed using the template analysis technique to build evidence. The experiences of Generations Y and Z at the beginning of their academic careers in accounting present explanations inscribed in Liquid Modernity. The results show that the experiences are supported by the interpersonal, demographic and professional teaching dimensions.
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Naïve is as Naïve does: The relation between retail investor attention, value investing, and noise
This paper investigates whether noisy variables, such as price trends and market sentiment, attract more attention from these investors than value-related information such as the price-earnings (PE) ratio. The literature investigating the role of individual investors in stock markets has provided vast evidence of retail traders’ performance. In contrast, little scrutiny has been put into examining the factors that induce these investors to trade. The main motivation of this study is to provide evidence to answer this question. The evidence that value-investing information is more important to investment decisions than noisy parameters and that this importance is more acute when the stock market becomes cheaper indicates that retail traders commonly base their decision-making process on efficient information, which is incompatible with the understanding that these players make naïve investment decisions. The findings challenge the common assumption present in several noise trader frameworks that individual investors are natural candidates for naïve investors, aligning with a more recent strand of the literature documenting that retail investors make efficient investment decisions. I employ an ordinary least squares (OLS) model and a quantile regression approach. The dependent variable (investor attention) is proxied by Google search volume of online searches on different stock market indexes. The independent variables are market sentiment (based on the American Association of Individual Investors survey), market return and Robert Shiller’s cyclically adjusted PE (CAPE) ratio. The results suggest that PE dynamics are more important in explaining changes in attention than noisy variables. Moreover, the negative sign exhibited by the value-attention relationship indicates that individual investors are more (less) attentive to stocks when they become cheaper (more expensive). I also demonstrate that this association is more representative during down markets but absent during positive periods, contradicting the stylized fact that retail traders are a driving force of bubbles.
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Budget participation and managerial performance: The role of psychological empowerment and creativity
This study aims to analyze the effects of budget participation (BP) on managerial performance (MP) through serial mediation of psychological empowerment (EP) and creativity (CT). The relationship between BP and MP motivates researchers to investigate intermediate variables to understand whether BP improves performance. This study fills this gap in examining PE and CT. CT and PE are critical factors for organizations’ success in the current business environment, characterized by rapid changes and high competitiveness. While PE creates an environment conducive to expressing CT, in turn, CT allows organizations to innovate and adapt to change, leading to a better MP. BP emerges as an effective strategy for promoting a more empowered and creative work environment, which, in turn, indirectly impacts MP. A survey was conducted with 267 companies listed on the Brazilian stock exchange B3 S.A. To test the hypotheses, we used partial least squares structural equation modeling, and additional analysis with importance-performance map analysis (IPMA). The results indicate that BP influences PE, which in turn boosts CT and, finally, CT positively affects MP. This study contributes to the literature by integrating PE and CT in analyzing the relationship between BP and MP. Regarding management implications, it is suggested that managers can leverage BP as a strategy to promote employees’ PE and CT, aiming to improve MP.
The tax reform as a watershed for tax-accounting research in Brazil
Management control systems as a package in a Portuguese agri-food company
This article aimed to analyze how management control systems (MCSs) as a package have been used in a Portuguese agri-food company. There is a need for a more holistic view of the diversity of management controls in organizations, analyzing how the different management controls interact in specific organizations from different cultural contexts. This is a field study, which allowed the researchers to immerse themselves in the organizational context of an important Portuguese agri-food company, allowing a better understanding of the relationships between different types of management control. It helps raise awareness of the diversity of management controls and the importance of using them as a package in organizations. The study adopts the case study methodology, supported by information collected through documents and semi-structured interviews as methods of collecting and generating evidence. This study reinforces the importance of studying management control systems as a package in different organizational contexts, highlights the importance of the links between different types of management control, shows the dynamics that occur in all components of the theoretical model adopted, and gives visibility to the diversity of management controls that can be used in organizations.
Implicit tax dynamics and corporate life cycle: A quantitative analysis of B3 listed companies
This study aims to analyze how implicit costs vary across the corporate life cycle stages (LCS) and determine whether companies retain the benefits of tax incentives despite the presence of implicit taxes. Previous research has primarily explored corporate taxation and life cycle theories separately, with limited focus on their interaction, especially in emerging economies like Brazil. This study addresses this gap by examining the interplay between implicit taxes and corporate LCS within a complex tax environment. In Brazil, tax incentives are crucial economic policy tools. Understanding their effectiveness in light of implicit taxes offers critical insights for investors, managers, and policymakers seeking to enhance fiscal outcomes and corporate strategies. As the first study to link implicit taxes and corporate life cycles in Brazil, it contributes valuable perspectives on the development of targeted tax policies. It also lays a foundation for future research on firm dynamics, taxation, and economic development. Using ordinary least squares (OLS) and quantile regression (QR), the study analyzed data from 2010 to 2022 for B3 S.A. – Brasil, Bolsa, Balcão (B3)-listed firms. Corporate LCS were categorized following Dickinson’s (2011) cash flow approach, with control variables such as size, leverage, and asset composition to ensure robust results. This study examines the relationship between implicit taxes and the corporate LCS of Brazilian companies listed on B3. The results indicate that firms in the introduction, growth, shakeout, and decline stages experience a lower implicit tax burden compared to those in the maturity stage. Additionally, these firms retain a greater share of tax benefits, suggesting that implicit taxes do not fully negate the advantages of tax incentives. By extending the analysis of implicit taxes to an emerging market like Brazil, the study integrates implicit tax theory with corporate life cycle theory. It provides insights for tax policy design, strategic tax planning, and investment decisions.
Asset-liability management in credit unions: Evidence from Brazil: Commentaries
Asset liability management in credit unions: Evidence from Brazil
This study aims to analyze the matching of discretionary asset and liability accounts in Brazilian credit unions and their evolution over time. Asset liability management for discretionary accounts and their evolution over time have not been addressed in previous studies, which have mainly focused on standardized account balances to analyze financial institutions, but not all Brazilian individual credit unions. The findings are particularly relevant to academia, managers and banking regulators by providing insights into discretionary account management. They contribute to a deeper and more practical understanding of asset liability management in the national context, with findings on the positive evolution over time, size and periods of economic crisis. The study can positively impact the efficient management of credit unions, minimizing financial risks and promoting financial inclusion in communities where these institutions play a significant role. Canonical correlation was used in the management of seven asset accounts and nine liability accounts to evaluate 672 Brazilian individual credit unions, from 2014 to 2022, totaling 5,361 observations. Asset liability management occurs, on average, in twenty percent of credit union discretionary accounts, allowing for their active management. A positive trend was observed in the dependence of these accounts over time. When analyzing the influence of size, greater dependence of the accounts was found in smaller credit unions. During periods of economic crisis, differences in management were more evident, and it is possible that managers adopted more efficient strategies during these periods.
Side effects of the pandemic: impacts on the business interruption insurance market: Commentaries
Side effects of the pandemic: impacts on the business interruption insurance market
The aim of this article was to analyze the underwriting dynamics and coverage extent in business interruption insurance, investigating the probability updating process during the pandemic. While the impact of the pandemic on the business insurance market in Brazil has not been quantified, this study fills that gap by identifying the pandemic’s effects on the business interruption line of business (LOB) and highlighting any policy reformulations. The relevance of this paper is examining how the insurance market perceives and reacts to unpredictable exogenous events, and offering insights into the behavior of economic agents under these conditions. The findings reveal that the pandemic significantly impacted the insurance market, particularly the business interruption LOB. This research provides behavioral evidence that could inform responses to future unexpected adverse events in the insurance sector. We used a two-stage panel data regressions, using official data from the Brazilian insurance market covering Jan/2003-Dec/2023, with a total of 25,333 observations from 180 insurers. The impact of the pandemic on underwriting decisions, premium collection, and claims within business interruption and other LOBs was estimated. During the pandemic, operations in the business interruption LOB and premium revenues showed a gradual decline. Initially, there was a 0.60% increase in claim payments, followed by a stabilization period. The pandemic’s impact on the business interruption insurance market deviated from the overall insurance market trend. Evidence of the probability updating phenomenon was observed within this industry.
Determinants of alignment level with public health risk management under COSO – ERM: Commentaries
Determinants of alignment level with public health risk management under COSO – ERM
This article aimed to analyze the determinants of alignment level of risk management practices in Brazilian municipal health management, based on the perception of municipal managers, using the Committee of Sponsoring Organizations of the Treadway Commission – Enterprise Risk Management (COSO – ERM) as a reference. This study presents theoretical and practical contributions by identifying the determinants, socioeconomic characteristics, and manager profile influencing the alignment level with municipal health risk management based on the COSO framework. In Brazilian public sector, the literature on risk management is still incipient. References are often drawn from business-oriented research, with the adoption of standards occurring coercively due to academic or private institutional pressures. The accounting literature has advanced through the proxy used to measure health risk management. Its adoption improves governance and management practices in health and education. The study used a survey based on COSO – ERM components, through the Likert scale to determine the dependent variable: the level of alignment with risk management. Additionally, a Tobit regression model with secondary variables was applied to test hypotheses regarding managers’ profiles and municipal socioeconomic characteristics. The survey results have showed that Brazilian municipalities have an 80% agreement with public health risk management practices proposed by COSO – ERM. Hypotheses related to effectiveness, 1 (health), 2 (education), and 3 (governance in information technology), were not rejected. Hypotheses 4 (indebtedness) and 5 (financial dependency) were rejected; hypothesis 6 (manager profile variables) was not rejected. This indicates that the manager’s profile is a determinant for aligning health risk management practices, while socioeconomic characteristics of indebtedness and financial dependence have a significant inverse influence.
Incentives on income as a determinant of the Effective Tax Rate: Commentaries
Tax incentives on income as a determinant of the Effective Tax Rate
The article analyzes the effectiveness of tax incentives in determining the Effective Tax Rate (ETR) of Brazilian companies, addressing a gap in the literature that does not adequately consider the effects of these incentives on profit. Based on a sample composed of 392 publicly traded companies listed on B3, the research analyzed data collected from 2013 to 2022, totaling 3,920 observations. Various ETR metrics were used, including Generally Accepted Accounting Principles (GAAP), Current, Deferred, Cash, Cash3, and Sectoral. The applied methodology analyzed the data through descriptive statistics and panel regression models of unbalanced data, aiming to understand the relationships between tax incentives and ETR, as well as the impact of variables such as size, leverage, capital intensity, inventory intensity, and profitability. The results revealed significant variations in ETR metrics, highlighting a complex relationship between tax incentives and tax behavior. Interestingly, in metrics such as ETR Cash and Cash3, the increase in tax incentives was associated with a higher tax burden. Other metrics, such as GAAP ETR and Current ETR, also revealed substantial differences, highlighting the influence of specific factors from the economic sector and the regulatory environment. The study recognizes limitations, such as the dependence on accounting data and the absence of detail on specific types of incentives. It is recommended that future research explore more detailed sectoral analyses and consider changes in Brazilian legislation. These conclusions provide significant contributions to the understanding of corporate tax strategies, offering relevant subsidies for public policy makers, companies, and investors interested in the transparency and competitiveness of the corporate environment.
Moisés Geraldo Cavalcante Macaíba Costa de Sousa
Sustainability disclosure and the relationship with board characteristics and assurance: Commentaries
Sustainability disclosure and the relationship with board characteristics and assurance
This study aims to analyze the influence of internal factors within organizations, such as board characteristics and the practice of external assurance, on the quality of sustainability reports of Brazilian companies. As a gap, to examine the level of compliance of Brazilian companies’ sustainability reports with the methodology suggested by IR. The objective is to assess the effects of the external assurance variable on the compliance of sustainability information. The relevance of this study is to assess entities’ commitment to socio-environmental responsibility, transparency, and accountability to stakeholders, while fostering sustainable practices and enhancing corporate image nationally. This study provides a discussion on the current state of board compositions, highlighting the high number of directors and the low proportion of women, despite the significant positive influence women have on sustainability disclosure. The results related to the “External Assurance” variable may encourage more organizations to adopt this practice, with the expectation of demonstrating greater alignment with suggested methodologies. An adaptation of the method by Sun et al. (2022) was used, analyzing report quality across nine stakeholder-related topics. An unbalanced panel data analysis was conducted, using random effects estimated by GLS, on a sample of 357 reports from 49 Brazilian companies between 2014 and 2022. The variable “Presence of Women on Boards (PWOB)” was found to be significant in relation to the quality of sustainability disclosures, indicating that diversity contributes to greater prestige and attention to social issues. The variables “Board Committees (BC)” and “External Assurance (EA)” showed a positive relationship, supporting the board’s ability to respond to different pressures and reinforcing transparent and reliable approaches in communication with stakeholders.
Bridging the gap between supply and demand: Advancing accounting and finance research to address societal challenges