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The role of users’ engagement in shaping financial reporting: Should activists target accounting more?

Garcia Osma, B. and Grande-Herrera, C. (2021). The role of users’ engagement in shaping financial reporting: Should activists target accounting more?. Accounting and Business Research, 51(5), pp. 511-544. doi: 10.1080/00014788.2021.1932261

Abstract

We define accounting engagement as stakeholders’ actions taken with the intention of influencing corporate reporting. Using this definition, we review the literature on such activism and discuss avenues for research. The evidence reviewed suggests accounting engagement is rare. We reflect on the reasons of this, given evidence on increasing overt engagement on other corporate issues, such as managerial compensation and governance, social, and environmental responsibility. Both information production and information acquisition costs have decreased over time, raising further questions about why engagement has not increased. We consider potential reasons linked to concerns over whether financial reporting meets users’ information needs, particularly, given the emergence of new users and the role of new technologies in the diffusion and processing of information. These concerns have accompanied claims of increasing complexity of financial accounting and the threat of information overload.

Publication Type: Article
Additional Information: © 2021 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Publisher Keywords: Accounting engagement, activism, information production costs, information acquisitions costs; users’ information needs, information complexity, information overload
Subjects: H Social Sciences > HG Finance
Departments: Bayes Business School > Finance
Date available in CRO: 25 May 2021 08:32
Date deposited: 25 May 2021
Date of acceptance: 9 April 2021
Date of first online publication: 9 August 2021
URI: https://openaccess.city.ac.uk/id/eprint/26193
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