THE IMPACT OF CORPORATE SOCIAL RESPONSIBILITY ON THE INFORMATIVENESS OF EARNINGS AND ACCOUNTING CHOICES

Abstract

The article hypothesizes that the level of corporate social responsibility affects both the informativeness of earnings and the magnitude of discretionary accounting accrual adjustments. The hypothesis exploits: (1) the positive relationship between corporate social responsibility and firms’ risk-return profiles; and (2) managers’ incentives in using discretionary accounting accrual adjustments. Results show that corporate social responsibility is positively associated with earnings’ explanatory power for returns and related to the magnitude of accounting accrual adjustments.

Citation

Riahi-Belkaoui, A. (2003), "THE IMPACT OF CORPORATE SOCIAL RESPONSIBILITY ON THE INFORMATIVENESS OF EARNINGS AND ACCOUNTING CHOICES", Advances in Environmental Accounting & Management (Advances in Environmental Accounting & Management, Vol. 2), Emerald Group Publishing Limited, Leeds, pp. 121-136. https://doi.org/10.1016/S1479-3598(03)02005-3