Akram Khalilov

Journal of Accounting and Public Policy 53 Doi: https://doi.org/10.1016/j.jaccpubpol.2025.107353

Using 4 million procurement contracts valued at around $1 trillion, we examine the financial reporting quality of government suppliers. We document that government suppliers demonstrate higher-quality financial reporting than do firms without government contracts. This finding is partly attributable to improvements in firms' internal controls over financial reporting following contracting with the government. Additionally, we document that procurement contract clauses related to competitive procedures, government monitoring, and certification of internal information accuracy contribute to the quality of financial reporting. We address potential endogeneity concerns by studying changes in congressional committee leadership and performing difference-in-differences analyses around first- and last-time contract awards. Our findings highlight the role of government customers in enhancing the quality of mandatory disclosures and internal controls.

Journal of Corporate Finance 94 Doi: https://doi.org/10.1016/j.jcorpfin.2025.102816

We examine disasters caused by individual firms with severe environmental impacts. These disasters trigger industry-wide demand for corporate social responsibility (CSR). We analyze whether affected firms respond by adopting substantive or symbolic CSR measures. We find that firms increase overall CSR performance through improvements in diversity and human rights rather than decreasing environmental concerns. This suggests firms prioritize symbolic CSR to legitimize their operations rather than substantive measures to mitigate environmental harm. We also document diverging costs and welfare effects. On average, substantive CSR actions are costlier and cause lower margins but avoid divestments by ESG-oriented funds while improving long-term credit ratings. Some of these benefits of substantive actions also accrue through symbolic actions at a lower cost.

Review of Quantitative Finance and Accounting Doi: https://doi.org/10.1007/s11156-025-01395-4

This study examines the informational and cushioning properties of balance sheet conservatism (BSC) and their role in mitigating the adverse effects of financial crises. I document that, due to informational property, high-BSC firms raise more debt and have a lower cost of debt financing during the crisis. The cushioning property of BSC is associated with lower earnings volatility, likelihood of significant asset write-downs and probability of covenant violations. These properties contribute to superior performance, including smaller declines in stock prices, investment, employment, and productivity. An out-of-sample test using the setting of the Great Depression (1929–1933) confirms the aforementioned findings. Overall, a path analysis suggests that BSC effects operate mostly through cushioning (informational) property contributing 39% (11%) to overall firms’ performance during the crisis.

Journal of Business Finance & Accounting 52(3) s. 1631-1665 Doi: https://doi.org/10.1111/jbfa.12859

We identify directors who experience a corporate bankruptcy and examine how this professional experience affects monitoring at the other firms where they concurrently sit on the board. Using a sample of US directors interlocked with firms that file for bankruptcy, we find that directors have a greater tolerance for real earnings management after a low-cost bankruptcy experience. This effect is stronger for independent directors and those who sit on the audit committee, consistent with a ratification and monitoring explanation. We do not find evidence consistent with the competing hypotheses that bankruptcy leads to directors' distraction or incentivizes efficient cost-cutting strategies. We contribute to the research on the influence of directors' corporate experience over corporate outcomes, by providing evidence suggesting that surviving a bankruptcy relatively unscathed lowers directors' perception of the severity of distress costs, with negative consequences for decision control.

Journal of Business Finance & Accounting 47(3-4) s. 333-364 Doi: https://doi.org/10.1111/jbfa.12438

We predict that accounting conservatism influences insiders' opportunities to speculate on good and bad news, and thus, insider trading profitability. We find that greater conditional (unconditional) conservatism is associated with lower (higher) insiders' profitability from sales. We find limited evidence that conservatism influences profitability from purchases. These findings are consistent with our hypotheses on the different informational roles of conditional and unconditional conservatism, and on the asymmetric influence of conservatism over the opportunities to speculate on good versus bad news. Our research design takes into consideration the endogenous nature of insiders' trading and conservatism. The results are robust to different measures of conservatism and a number of additional analyses.

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