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CC BY V4.0, Open Access
Journal article
The role of integrated reporting and earnings management on the combined assurance and capital market liquidity relationship
Asian Journal of Accounting Research, Vol.10(2), pp.200-218
2025
Abstract
Purpose
This study examines the role of integrated reporting (IR) and earnings management (EM) practices on the combined assurance model (CA) and the firms’ capital market liquidity (FCML) performance nexus. Based on a moderated mediation analysis, it examines the channels through which CA quality influences FCML performance.
Design/methodology/approach
The study uses data from the top 100 firms on the Johannesburg Stock Exchange (JSE) based on market capitalisation, and a bootstrap moderated mediation model through Hayes Process Macro was adopted.
Findings
The findings show that although IR quality mediates the CA quality and FCML performance nexus, the mediation is conditional on firms’ practices of EM, implying that the value of CA through IR to capital market participants is more pronounced for firms engaged in high EM practices.
Practical implications
The findings emphasise the importance of the CA model in streamlining assurance processes, reducing assurance costs and enhancing the credibility of financial and sustainability reports, thereby improving capital market performance. Hence, it is a valuable assurance framework for International Financial Reporting Standards (IFRS) S1 and S2 compliance.
Originality/value
This study uniquely lines up the CA model, IR quality and EM practices to project the value relevance and channel(s) through which the effective communication of the CA model influences FCML performance.
Details
- Title
- The role of integrated reporting and earnings management on the combined assurance and capital market liquidity relationship
- Authors/Creators
- Augustine Donkor - Murdoch University, Murdoch Business SchoolDr Terri Trireksani, CA - Murdoch University, Murdoch Business SchoolHadrian Geri Djajadikerta - Edith Cowan University
- Publication Details
- Asian Journal of Accounting Research, Vol.10(2), pp.200-218
- Publisher
- Emerald Publishing Limited
- Identifiers
- 991005737344707891
- Copyright
- © 2025, Augustine Donkor, Terri Trireksani and Hadrian Geri Djajadikerta
- Murdoch Affiliation
- Murdoch Business School
- Resource Type
- Journal article
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