Mittuniversitetet

Financial robo-advisors (FRAs) enable households with a limited amount of money to participate in financial markets without time or place constraints. While FRAs can help investors overcome behavioural biases, they also have disadvantages, such as reliance on a limited number of inputs and a lack of individualization. We conduct a scoping literature review of the nascent research on FRAs to synthesize previous research results. We identify two streams of literature: (1) asset management, which focuses on designing FRAs and improving the functioning of these machine advisors, and (2) behavioural finance, which investigates technology adoption and issues concerning biased advice. Among other topics, future research should address why FRAs do not appeal to less financially literate people, who would likely benefit more than others from using them.

PurposeThis study investigates how family ownership and involvement in management and directorship influenced audit fees in Chinese family firms during the COVID-19 pandemic, leveraging China's unique cultural and institutional context.Design/methodology/approachUsing data from the China Stock Market and Accounting Research Database, the study analysed 18,889 firm-year observations from family-owned listed firms over the 2015-2022 period, employing two-way fixed-effect regressions, robustness tests and controls for endogeneity. Pre- and post-COVID-19 periods (2015-2018 versus 2019-2022) were compared to assess the impact of family governance on audit fees during the pandemic.FindingsThe results reveal a significant negative relationship between family ownership and audit fees during COVID-19, compared to the insignificant negative pre-crisis association. Family involvement in management consistently reduced audit fees across the whole period, while directorship showed no significant effect. The findings indicate that Confucian-inspired familial alignment mitigated Type I agency problems, reducing audit risk without significantly increasing Type II agency conflicts.Practical implicationsFamily firms can leverage trust-based management to strengthen resilience and reduce external oversight costs, while auditors can optimise procedures for Chinese family firms, reducing costs associated with lower perceived risk. Policymakers could consider tailoring regulations to acknowledge culturally specific governance strengths.Originality/valueThis study contributes to the audit fee literature by emphasising the moderating influence of Confucian values and China's cultural and institutional environment. By demonstrating reduced audit fees in Chinese family firms during a global crisis, the study challenges Western-centric agency theory predictions.

Purpose

This study aims to examine the influence of mandatory sustainability reporting on the cost stickiness of companies.

Design/methodology/approach

The study employs Anderson et al.'s (2003) cost stickiness model, using the difference-in-difference method, where the treatment and control groups comprise companies from 17 European Union (EU) countries and 11 non-EU Organisation for Economic Co-operation and Development countries, respectively. The time period spans from 2013 to 2022, with 2017 being the year of the EU Directive's implementation. The study uses various approaches in addressing endogeneity issues, including propensity-score matching, the multiple specifications method, parallel trend analysis, placebo variable and control variables.

Findings

The results confirm a statistically significant increase in discretionary costs, i.e. selling general and administrative costs, for EU companies in the post-implementation period. The stickiness is more profound in companies demonstrating an annual improvement in sustainability performance. Stakeholder-oriented civil law countries exhibit an increase, while shareholder-oriented common law countries show a decrease in cost stickiness.

Research limitations/implications

The study extends the literature on the economic effects of mandatory sustainability reporting by examining the novel aspect of cost behaviour, thereby revealing managerial perceptions about costs arising from compliance. It also highlights the role of company-level and country-level pre-regulation sustainability involvement in moderating the regulatory effect.

Practical implications

The study provides insights for policymakers in terms of formulating future regulations.Originality/valueThis study is the first to analyse cost stickiness in relation to mandatory sustainability reporting, adopting a multiple-country setting and covering a significantly long time period.

The emphasis on digitalization has significantly affected public sector organizations, including municipalities, as they strive to improve operational efficiency, transparency, and public value. Nevertheless, historical examples reveal high failure rates in digitalization projects, often resulting in delays, financial losses, and political repercussions. These failures underscore the importance of conducting value for money (VFM) audits to ensure digitalization projects are accountable and beneficial to the taxpaying citizens. This study critically examines the work of professional auditors in VFM audits related to digitalization projects within Swedish municipalities during the 2016–2023 period. The findings suggest that these audits primarily address organizational aspects, rather than improved economy, efficiency, and effectiveness. In this context, VFM audits appear to function as standardized and time-efficient procedures aimed at providing comfort to various stakeholders, without assessing the actual efficiency gains from digitalization initiatives. A possible reason for this is that the auditors seek to make digitalization initiatives auditable, given the acknowledged challenges of evaluating such projects. Future research is therefore encouraged to further explore this pattern in VFM audits of digitalization projects, ideally incorporating the perspectives of different actors. 

ABSTRACT Continuous auditing research has grappled with the challenge of managing the abundance of detected exceptions in internal audit applications for the past 30?years. A key issue in continuous auditing involves the uncontrolled proliferation of exceptions, where the sheer volume makes manual follow-up impractical, undermining the viability of the technology. The root cause of this problem is the combination of strong class imbalance and the predominant rule-based systems design. Prior investigations have attempted ad hoc remedies like introducing additional layers to prioritize the most suspicious exceptions or aggregating data. Currently, there is no universal method to address this prioritization challenge, leaving internal auditors without a means to focus specifically on exceptions most likely to represent genuine faults. Our research explores the origin of this prioritization dilemma and proposes a systems design that can deal appropriately with class imbalance. This solution allows full control of the exception volume by a simple approach in machine learning called thresholding and combined with methods to interpret the output of a continuous auditing system our design effectively focuses the internal auditors' attention on the most significant exceptions. We discuss the implications of thresholding for practice and the literature.

Informal borrowing from family and friends suffers from the lack of formal agreement and can lead to severe consequences. Self-control theory suggest some strategies to improve the saving tendencies which can reduce this type of borrowing. To examining which factors that can enhance these strategies in the European Union, this study uses balanced panel data analysis from the Global Findex and Eurostat databases for the years 2014, 2017, and 2021 and conclude a pivotal role of using debit cards and also for saving behavior in addressing this type of borrowing. The study also arises inquiries about the effectiveness of public financial education and empathizes the importance to improve related policies in the FinTech landscape. By elucidating these findings, this paper contributes to deeper knowledge of the dynamics between using debt cards and borrowing practices in the European Union.

In the evolving landscape of environmental management and sustainability, the role and impact of carbon accounting is critical. This research monograph entitled Carbon Accounting for Sustainability and Environmental Management provides a comprehensive exploration of this subject. The book aims to bridge the gap between theory and practice, offering readers in-depth insights into the intricate dynamics of carbon accounting and its implications for sustainable development. This book delves into empirical evidence on carbon accounting practices, exploring their influence on corporate and national environmental management and sustainability, using China as a case context. It draws from data and case studies to provide practical insights into the effectiveness of various carbon accounting approaches and their impact on environmental sustainability. It sheds light on how carbon accounting practices are integrated into corporate and national strategies for environmental management and sustainable development.