New Approaches to CSR, Sustainability and Accountability, Volume III

Table of Contents

1. Frontmatter

2. Introduction Chapter

   1. Frontmatter

   2. Chapter 1. The Role of the Curriculum in Business Schools in the Widespread Use of ESG Reporting

      Kıymet Tunca Çalıyurt

      Abstract

      If we want companies to report ESG reporting, we have to ensure that managers, CEOs, CFOs of the future receive detailed courses on ESG during their university education. Since ESG reporting is not just the area of management sciences, we should give interdisciplinary training to students who will be managers in the future. In this section, the importance of ESG reporting will be covered by the innovations of business schools.

3. New Developments on Environmental Issues

   1. Frontmatter

   2. Chapter 2. Training Accounting, Finance and Internal Auditing Staff on Environmental Issues, Sustainability and Climate Change Risk

      Birsel Sabuncu

      Abstract

      Due to the activities of human beings in the world, the negative effects on the basic elements such as air, water, soil, daylight that are necessary for the life of living things in nature and the negative effects on the lives of living things are environmental issues. Environmental pollution is all the phenomena that adversely affect the lives of humans, animals and plants. One of the biggest environmental threats encountered in recent years is climate change. Increases in temperature, drought, floods, increases in severe weather events and melting glaciers pose a risk for the creatures in nature. This study focuses on raising awareness and training of staff who perform the accounting profession in the process of adapting environmental issues, climate change and climate change risks to the process of changes and innovations in accounting. Accounting, finance and internal auditing staff should be informed and subjected to training on the innovations and changes brought about by climate change and environmental issues to accounting practices. They should be subjected to external and in-company extrail training in order to include environmental issues in accounting records, to reflect natural disasters and climate change risks to financial reporting, to raise awareness about corporate sustainability processes and to ensure their competence in professional issues. It should be ensured that accounting, finance and internal auditing staff have knowledge about sustainability reporting, carbon accounting, green accounting, reflect the climate change risk on financial reporting, and perform environmentally sensitive accounting profession such as greenhouse gas assurance audits. In accounting practices, company managements and governments should especially make a separate effort to raise awareness of accountants and working professionals about of environmental issues and climate change and sustainability.

   3. Chapter 3. Determinants of Environmental Credit Risk Management: Empirical Evidence from European Banks

      Junmei Qi, Edina Eberhardt-Toth, Elisabeth Paulet

      Abstract

      This chapter explores determinants of banks’ environmental credit risk management (ECRM) level. Content analysis is used to quantify the ECRM level of 50 banks in Europe between 2016 and 2018. The impact of stakeholder power and banks’ characteristics on ECRM is investigated through a regression model. This chapter finds that banks in Europe that adopt higher levels of ECRM are Equator Principles signatories, are larger and have more financial strength, while the legal environments of their domiciliation countries and cooperative bank business models are not significant. The proposed ECRM framework synthesizes previous ECRM measurements. It can be used as a new rating system to compare banks’ ECRM levels. It is argued that banks can serve as powerful change agents in reducing the impact of corporations on the environment by influencing the behaviors of borrowing firms through ECRM.

   4. Chapter 4. Analysis of Provisions and Contingent Liabilities Relating to the Company's Environmental Disaster Samarco Mineração

      Henrique Formigoni, Liliane Cristina Segura, Ingrid Euflausino Fogaça de Souza, Raquel Popadiuk

      Abstract

      This study aims to verify, in the light of CPC 25—Provisions, Contingent Liabilities and Contingent Assets, how the company Samarco Mineração S.A. treated its financial statements, the provisions and contingent liabilities arising from the environmental disaster that occurred on November 5, 2015, with the disruption of the Fundão dam in Minas Gerais. The research is descriptive, with documentary procedures, since the company's financial statements were analyzed, including the explanatory notes. As a data collection instrument, a checklist was used containing the main points required by CPC 25, in order to facilitate the reading of the statements, and allowing the comparability of data between the publications of the three years selected as a sample, 2015, 2016 and 2017. The results revealed that the adherence to the company's financial statements, with regard to the recognition, measurement and disclosure of the provisions and contingent liabilities resulting from the accident corresponds to 74.3%, on average, of what is required by the standard, for the three years addressed. Gaps were identified in some main points required by the standard, such as the measurement, which, due to the high degree of uncertainty of the facts resulting from the disaster, the estimates of probable losses and the disclosure of possible losses, were not adequate to represent the disbursement necessary to settle the obligations.

4. New Developments on Corporate Governance and Accountability

   1. Frontmatter

   2. Chapter 5. Internal Ve External Dimensions of Corporate Governance: A Cluster Analysis in Logistics Enterprises

      İsmail İyigün

      Abstract

      In recent years, corporate governance has come to the forefront in terms of sustainability of companies in a successful manner that respects the interests of all stakeholders. There are a number of important dimensions in corporate governance and these dimensions form the basis of corporate governance. The main motivation of this study is to determine the basic dimensions of corporate governance and to group them within themselves. For this purpose, nine different components of corporate governance have been identified. While some of these components are related with company employees, some others are related with stakeholder groups other than employees. In this study, it is sought to answer the questions of how many clusters of corporate governance dimensions divide within itself, which components are within the company and which components are directed towards the stakeholder groups of the company. For this purpose, an application has been carried out on logistics businesses. The data showed that the components of corporate governance were divided into two clusters. When the characteristics of governance components are examined, economic, legal, ethical and contractual internal governance; volunteerism, environmental, fairness, transparency and network dimensions are related to external governance. The findings provide guidance to researchers and professionals.

   3. Chapter 6. Cryptocurrency Awareness in Kosovo

      Simeana Beshi, Flaka Braha, Luan Vardari

      Abstract

      Even after more than a decade since the first issue of bitcoin, the cryptocurrencies are not yet used and recognized for the purpose they are created, i.e. cash for online transactions. Kosovo, a new developing country, still in transition, makes no exception to this issue. Kosovo has a young population and very high internet use, even so, the trust in a currency without insurance, is understandably low, especially when the method in which the currency is created is not fully comprehended by the majority. While most of the persons who participated in the survey have heard of cryptocurrencies, they have none or very little knowledge of the blockchain technology, which is the very foundation of the currency itself. In this study, we have analyzed the relation between age, level of education, use of digital options for payments, and cryptocurrency awareness and perception among the population. A factor with a direct impact on the possible use of bitcoin is its legal regulation, the absence of which impacts also on the perception about cryptocurrency. Therefore, the issue of normative framework seems to be crucial for the future of cryptocurrencies so that the perception of many may be changed and trust in a currency created by a new technology may be gained. We determine that the millennials could be the generation that will use the cryptocurrency in the future since their perception of this issue is considerably different from the ones that now are holders of the capital.

   4. Chapter 7. Corporate Governance Processes in the Adoption of New Business Models Due to the Pandemic

      Feyza Çağla Oran, Agah Sinan Ünsar

      Abstract

      We are in a time where digital nomadism has arisen in the general sense. When it is generally considered, there is the implementation of information and communication technologies in the traditional business processes at the background of the electronic business model that has come to the fore following the pandemic. Information technologies emerge as the driving force of the changes in the business organization processes and approaches. It has a role in retrieving, processing, analyzing, and distributing information electronically. This comes to the forefront in changing the traditional business models through this way. Home office working order requires digitizing the working space, downloading the business applications to a smartphone and tracking the processes instantly, and using technology actively in order to increase the productivity for home office operations. Home office technologies enable advanced connection and communication networks while providing employers with saving on space, time, and money. In the past century, the prominent concepts were strict working programs, hierarchies, and repetitive tasks. The disappearance of the classical workplace concept with the digitalization of the entity will change the relationship between the social partners. Institutions have tried to use their creativity during the pandemic. All institutions have started to adapt informatics-based business models at the same time and develop their experiences and skills. Digitalization has become prominent in many sectors such as education, sports, banking, and health. The performed changes indicate that the targeted point in the business models focuses on digitalizing and flexibility. It has been observed that institutions that have an informatics infrastructure and focus on functional flexibility especially during the pandemic process have continued to actively conduct their business during this crisis. This period identified as the “new normal” has changed many habits that we are accustomed to.

5. New Developments on Innovation and Transformation

   1. Frontmatter

   2. Chapter 8. Regional Innovation Factors and the Future of Work

      Milen Baltov

      Abstract

      The start of the third decade of twenty-first century changed much of the dynamics both in the regional landscape of the innovations and for the work processes following them. The online platforms through which a lot of employments started to be generated crossed with the first applications of the artificial intelligence (AI). Thus the influx of models and processes related to the Future of Work expected at a predictable pace accelerated much more due to the initial pandemic crisis in the 2020 and the expected at the late 2021 emerging recession with further serious challenges for governments and economic operators to come. In this chapter, both the outlines of the regional levels of innovation and types/sectors of technological changes and the elements of the future of work, which occur as a follow-up will be identified. For the purpose, already a field research was performed in the frames of a project financed under the Bulgarian National Scientific Fund, and a lot of assumptions were discussed in the frames of an initiative on the multidisciplinary innovation. The objectives of this chapter are set out towards outlining the effects both of the innovative actions as a whole, and of some focused achievements for the AI applications over the processes by which the Future of Work vocations will be fulfilled. The understanding in the chapter is that the processes will be further accelerated not in the range of decades, but in less than several years. In the concept of the chapter is that the results of the acceleration of the Future of Work processes the working relations are and will be significantly demassified, and many industries, as well as the balance between them, will change. Those industries in the entertainment sector especially will be increasingly inferior, and the health and social care activities and sub-sectors may attract more work force on the other extreme. At the same time, the collection, management and use of process automation data as well as the mechanization of multiple productions and services will attract significant investment and replace human labour more and more.

   3. Chapter 9. Impact on Operating Profitability by Greenhouse Gas Statements: A Research in BIST Sustainability Index Companies

      Esra Atabay, Kıymet Tunca Çalıyurt

      Abstract

      This study determines whether greenhouse gas (GHG) emission statements are subject to assurance audits, and whether they affect the operating profitability of companies. Two secondary questions are explored. First, does the profitability of companies requesting assurance engagements vary by sector? Second, are regulations relating to the verification of GHG emissions in Turkey an effective control over the companies’ assurance demands? This study used data from fifty BIST Sustainability Index companies’ sustainability reports from 2011 to 2017. It was determined whether the sustainability reports included a company-disclosed assurance report on GHG emissions, and the results were summarized in Microsoft Excel. Profitability ratios were used to determine whether and to what extent assurance engagements were performed by verification bodies (ROA—return on assets ratio, ROE -Return on Equity). The data were subjected to frequency, crosstab, and parametric and nonparametric analyses using SPSS statistical software. The rate of BIST Sustainability Index companies requesting an assurance engagement was quite low (at 20%), and possession of an assurance engagement did not significantly affect company profitability. By sector, although there was a significant difference in the profitability of companies with an assurance engagement report, those in the financial sector were found to be more profitable than in other sectors. However, companies with an assurance engagement report in the transportation, telecommunication, and warehousing sectors exhibited the lowest profitability among the sectors. This study takes a research-based approach to investigate assurance engagements in GHG emission reports in Turkey. The study is original because there are few studies in Turkey.

   4. Chapter 10. Impact of Climate Change and the Role of Accounting & Accountants on Water Management

      Merve Öztürk, Muhammet Bezirci, Yunus Ceran

      Abstract

      Global climate change is one of the factors that triggers the water crisis besides rapid population growth, industrialization, and globalization. Various climatological effects of climate change have adverse impacts on water resources. Vitally important water and its management today should be carried out regarding the effects of climate change. In the water management models implemented by taking the impact of climate change into account, not only water managers but also all stakeholders who use water have essential duties. Therefore, decisions in water management should be made by gathering all decision-makers and stakeholders under the concept of accountability and participation. This review-based paper aims to illustrate the role of accountants as one of the stakeholders and the accounting profession on water management. Changing the function of accounting and the ability of accountants about using accounting terminology in other fields will be evaluated within the frame of water management.

   5. Chapter 11. Faculty-Led Short Study Abroad Program Effects on Professional Identity: A Qualitative Study from India

      Christo Joseph

      Abstract

      This explorative qualitative study examined the effect of short-term study abroad program (SAP) on nine faculty members of a Private University in India. The analysis of faculty professional identity in SAP has garnered significance due to the increasing success of such programs. Study abroad program are academic programs of short duration ranging from one week to eight weeks, in which faculty members accompanied along with students to other countries (Sachau et al., J Manag Educ 34:645–670, 2010). This research aims to evaluate the critical parameters and insights that truly reflect the accompanying faculty’s professional identity and growth. The findings of our qualitative explorative study found a sense of growth in both self and professional identity of faculty members. The presented explorative qualitative study is unique in adding value to the existing literature on the professional identity development of faculty, enrichment of faculty members’ understanding, and broadening the vision of participating faculty.

   6. Chapter 12. Abuse of Creative Accounting in Practical Application

      Vedran Šupuković, Sanel Jakupović, Bogdana Vujnović-Gligorić

      Abstract

      The aim of general-purpose financial statements is to provide fair and objective information about the financial position, performance, and cash flows of a business entity. Such reporting, in the initial theoretical idea, was sought to be provided through creative accounting, i.e. through the introduction of certain flexibility based on the choice of different methods of estimating fair value. The complexity and dichotomy in determining fair value have led to manipulations in the financial statements, and thus to the biased presentation of balance sheet items. Flexibility techniques, i.e. manipulations, are numerous and often complex so that the bias of financial reporting can hardly be noticed in time. The potential for abuse of creative accounting increases with the allowable flexibility of applicable accounting frameworks. This paper aims to point out critical points in accounting manipulations and reveal the techniques of abuse of creative accounting, with an emphasis on possible forms of false financial reporting and ways of their manifestation. The seriousness of this phenomenon is highlighted by the results of research by the American Association of Chartered Fraud Investigators (ACFE), according to which the largest loss globally is caused by fraud in financial statements. The aim of this paper is to identify indications that may point out to the abuse of creative accounting through the presented techniques and procedures for recognizing business events.

6. Backmatter