The effects of earning quality on sustainable reports: an empirical study from Vietnam

Figures & data

Table 1. List of indicators taken from GRI4.

No.	Code	Item Name	No.	Code	Item Name
1	G102-1	Name of the organization	63	G301-3	Reclaimed products and their packaging materials
2	G102-2	Activities, brands, products, and services	64	G302-1	Energy consumption within the organization
3	G102-3	Location of headquarters	65	G302-2	Energy consumption outside of the organization
4	G102-4	Location of operations	66	G302-3	Energy intensity
5	G102-5	Ownership and legal form	67	G302-4	Reduction of energy consumption
6	G102-6	Markets served	68	G302-5	Reductions in energy requirements of products and services
7	G102-7	Scale of the organization	69	G303-1	Water withdrawal by source
8	G102-8	Information on employees and other workers	70	G303-2	Water sources significantly affected by withdrawal of water
9	G102-9	Supply chain	71	G303-3	Water recycled and reused
10	G102-10	Significant changes to the organization and its supply chain	72	G304-1	Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas
11	G102-11	Precautionary Principle or approach	73	G304-2	Significant impacts of activities, products, and services on biodiversity
12	G102-13	Membership of associations	74	G304-3	Habitats protected or restored
13	G102-14	Statement from senior decision-maker	75	G304-4	IUCN Red List species and national conservation list species with habitats in areas affected by operations
14	G102-15	Key impacts, risks, and opportunities	76	G305-1	Direct (Scope 1) GHG emissions
15	G102-18	Governance structure	77	G305-2	Energy indirect (Scope 2) GHG emissions
16	G102-19	Delegating authority	78	G305-3	Other indirect (Scope 3) GHG emissions
17	G102-20	Executive-level responsibility for economic, environmental, and social topics	79	G305-4	GHG emissions intensity
18	G102-21	Consulting stakeholders on economic, environmental, and social topics	80	G305-5	Reduction of GHG emissions
19	G102-22	Composition of the highest governance body and its committees	81	G305-6	Emissions of ozone-depleting substances (ODS)
20	G102-23	Chair of the highest governance body	82	G305-7	Nitrogen oxides (NOX), sulfur oxides (SOX), and other significant air emissions
21	G102-24	Nominating and selecting the highest governance body	83	G306-1	Water discharge by quality and destination
22	G102-26	Role of highest governance body in setting purpose, values, and strategy	84	G306-2	Waste by type and disposal method
23	G102-27	Collective knowledge of highest governance body	85	G306-3	Significant spills
24	G102-28	Evaluating the highest governance body’s performance	86	G306-4	Transport of hazardous waste
25	G102-29	Identifying and managing economic, environmental, and social impacts	87	G306-5	Water bodies affected by water discharges and/or runoff
26	G102-30	Effectiveness of risk management processes	88	G307-1	Non-compliance with environmental laws and regulations
27	G102-31	Review of economic, environmental, and social topics	89	G308-1	New suppliers that were screened using environmental criteria
28	G102-32	Highest governance body’s role in sustainability reporting	90	G308-2	Negative environmental impacts in the supply chain and actions taken
29	G102-33	Communicating critical concerns	91	G401-1	New employee hires and employee turnover
30	G102-35	Remuneration policies	92	G401-2	Benefits provided to full-time employees that are not provided to temporary or part-time employees
31	G102-36	Process for determining remuneration	93	G401-3	Parental leave
32	G102-37	Stakeholders’ involvement in remuneration	94	G402-1	Minimum notice periods regarding operational changes
33	G102-38	Annual total compensation ratio	95	G403-1	Workers representation in formal joint management–worker health and safety committees
34	G102-39	Percentage increase in annual total compensation ratio	96	G403-2	Types of injury and rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities
35	G102-40	List of stakeholder groups	97	G403-3	Workers with high incidence or high risk of diseases related to their occupation
36	G102-41	Collective bargaining agreements	98	G403-4	Health and safety topics covered in formal agreements with trade unions
37	G102-43	Approach to stakeholder engagement	99	G404-1	Average hours of training per year per employee
38	G102-44	Key topics and concerns raised	100	G404-2	Programs for upgrading employee skills and transition assistance programs
39	G102-45	Entities included in the consolidated financial statements	101	G404-3	Percentage of employees receiving regular performance and career development reviews
40	G102-46	Defining report content and topic Boundaries	102	G405-1	Diversity of governance bodies and employees
41	G102-48	Restatements of information	103	G405-2	Ratio of basic salary and remuneration of women to men
42	G102-52	Reporting cycle	104	G406-1	Incidents of discrimination and corrective actions taken
43	G102-53	Contact point for questions regarding the report	105	G407-1	Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk
44	G102-54	Claims of reporting in accordance with the GRI Standards	106	G408-1	Operations and suppliers at significant risk for incidents of child labor
45	G102-55	GRI content index	107	G409-1	Operations and suppliers at significant risk for incidents of forced or compulsory labor
46	G102-56	External assurance	108	G410-1	Security personnel trained in human rights policies or procedures
47	G103-1	Explanation of the material topic and its Boundary	109	G411-1	Incidents of violations involving rights of indigenous peoples
48	G201-1	Direct economic value generated and distributed	110	G412-1	Operations that have been subject to human rights reviews or impact assessments
49	G201-2	Financial implications and other risks and opportunities due to climate change	111	G412-2	Employee training on human rights policies or procedures
50	G201-3	Defined benefit plan obligations and other retirement plans	112	G412-3	Significant investment agreements and contracts that include human rights clauses or that underwent human rights screening
51	G201-4	Financial assistance received from government	113	G413-1	Operations with local community engagement, impact assessments, and development programs
52	G202-1	Ratios of standard entry level wage by gender compared to local minimum wage	114	G413-2	Operations with significant actual and potential negative impacts on local communities
53	G202-2	Proportion of senior management hired from the local community	115	G414-1	New suppliers that were screened using social criteria
54	G203-1	Infrastructure investments and services supported	116	G414-2	Negative social impacts in the supply chain and actions taken
55	G203-2	Significant indirect economic impacts	117	G416-1	Assessment of the health and safety impacts of product and service categories
56	G204-1	Proportion of spending on local suppliers	118	G416-2	Incidents of non-compliance concerning the health and safety impacts of products and services
57	G205-1	Operations assessed for risks related to corruption	119	G417-1	Requirements for product and service information and labeling
58	G205-2	Communication and training about anti-corruption policies and procedures	120	G417-2	Incidents of non-compliance concerning product and service information and labeling
59	G205-3	Confirmed incidents of corruption and actions taken	121	G417-3	Incidents of non-compliance concerning marketing communications
60	G206-1	Legal actions for anti-competitive behavior, anti-trust, and monopoly practices	122	G418-1	Substantiated complaints concerning breaches of customer privacy and losses of customer data
61	G301-1	Materials used by weight or volume	123	G419-1	Non-compliance with laws and regulations in the social and economic area
62	G301-2	Recycled input materials used

(Source: UNOPS Sustainability Report 2018).

Table 2. Summary of variables in the model.

Name	Code	Measurement	Expectation
Dependent variables
Sustainable Report	SR	Take value from 1 to 5 depending to disclosure level according to GRI4 guidelines
Independent variables
Earning quality	EQ_EM	Earning management	+
	EQ_SM	Earning stability	+
Controlling variables
Firm size	SIZE	Ln of total assets (LnTS)	+
Financial leverage	LV	Total debts/Total assets	–
Profitability	ROA	Net profit/Average total assets	+
Growth rate	GROWT	Growth of revenues	+/-
State ownership	STATE	1 if state ownership is greater than industry average 0 if state ownership is less than industry average	–
Foreign ownership	FOR	1 if foreign ownership is greater than average 0 if foreign ownership is less than average	+
Audit quality	AUDIT	1 if firm is audited by big 4 0 if firm is not audited by big 4	+
Legislation	LAW	1 if SR prepared in 2017 0 if SR prepared in 2016	+

(Source: authors proposal).

Table 3. Statistical description.

Variable	Obs.	Mean	Std.Dev	Min	Max
SR	1560	0.254	0.210	0.010	0.970
EQ_EM	1560	−0.195	0.315	−8.783	0.000
EQ_SM	1560	−0.031	0.063	−1.332	0.000
SIZE	1560	28.083	1.590	23.470	34.938
LV	1560	0.499	0.226	0.003	2.031
ROA	1560	0.062	0.090	−1.693	0.784
GROWT	1560	0.251	2.426	−1.000	74.602

(Source: Data analyzed by STATA 14).

Table 4. Correlation matrix.

	SR	EQ_SM	EQ_EM	SIZE	LV	ROA	GROWT
SR	1
EQ_SM	0.0879*	1
EQ_EM	0.0718*	0.5558*	1
SIZE	0.3771*	0.0895*	0.0970*	1
LV	−0.0099	0.1313*	0.0757*	0.3754*	1
ROA	0.1034*	−0.0894*	−0.0313	−0.0808*	−0.4491*	1
GROWT	−0.0163	−0.1148*	−0.3441*	0.0151	−0.0295	0.0028	1

(Source: Data analyzed by STATA 14).

Table 5. Regression results about the effect of earning quality on sustainable reports.

	GLS		GMM
	Model 1	Model 2	Model 1	Model 2
EQ_EM	0.0309**		0.0198**
EQ_SM		0.256***		0.284***
SIZE	0.0603***	0.0603***	0.0700***	0.0688***
LV	−0.134***	−0.141***	−0.238***	−0.250***
ROA	0.169***	0.172***	0.123*	0.178**
GROWT	−0.000625	−0.0013	−0.00118	−0.00137
_cons	−1.380***	−1.377***	−1.623***	−1.585***
N	1560	1560	1560	1560
Wald chi2(5)	315.54	72.36
Prob > chi2	0.0000	0.0000
AR(2)			0.923	0.946
Hansen test			0.279	0.444

* p < 0.1, ** p < 0.05, *** p < 0.01.

(Source: Data analyzed by STATA 14).

Table 6. Regression results about the effect of Earning Quality on Sustainable Reports with supplement dummy variables.

	GMM
	Model 1				Model 2
EQ_EM	0.0244**	0.0171**	0.0216**	0.0196*
EQ_SM					0.322**	0.214**	0.221**	0.336**
STATE	−0.0280*				−0.0336**
EQ_EM*STATE	−0.0345				−0.352**
FOR		0.0133				0.0198
EQ_EM*FOR		0.0103				0.419**
AUDIT			0.0526**				0.0649**
EQ_EM*AUDIT			−0.0099				0.386**
LAW				0.116**				0.113**
EQ_EM*LAW				0.0146				0.0826
SIZE	0.0687**	0.0673**	0.0614**	0.0716**	0.0678**	0.0662**	0.0592**	0.0706**
LV	−0.231**	−0.224**	−0.231**	−0.165**	−0.243**	−0.244**	−0.239**	−0.175**
ROA	0.147**	0.0973	0.0883	0.238**	0.196**	0.133*	0.159**	0.323**
GROWT	−0.0017	−0.0013	−0.0008	0.0004	−0.0013	−0.0016*	−0.0015*	0.0004
_cons	−1.582**	−1.557**	−1.401**	−1.750**	−1.549**	−1.519**	−1.341**	−1.719**
N	1560	1560	1560	1560	1560	1560	1560	1560
AR(2)	0.691	0.357	0.29	0.984	0.916	0.877	0.789	0.137
Hansen test	0.219	0.315	0.356	0.652	0.243	0.273	0.389	0.774

*p < 0.1, **p < 0.05.

(Source: Data analyzed and drawn by using STATA 14).