Dr. Zabihollah Rezaee accepted for publication in the Journal of Business Ethics

For release:  April 14, 2017

Dr. Zabihollah Rezaee, Thompson-Hill Chair of Excellence and professor of Accountancy, was recently accepted for publication in the Journal of Business Ethics. His paper is entitled "Are the Quantity and Quality of Sustainability Disclosures Associated with the Innate and Discretionary Earnings Quality?" Dr. Rezaee co-authored this paper with Dr. Ling Tuo, Lawrence Technological University in Michigan. Dr. Tuo is a former FCBE Ph.D. student and Professor Rezaee chaired her dissertation.

This paper examines the association between the quantity and quality of sustainability disclosures and earnings quality in the context of corporate ethical value and culture. The authors suggest that sustainability disclosures of environmental, social, and governance (ESG) performance reports are linked to earnings quality, because of the importance of both earnings quality and ESG sustainability disclosures to investors and trustworthiness of corporate reporting. The paper finds that sustainability disclosure quantity is positively associated with innate earnings quality and negatively correlated with discretionary earnings quality in mitigating managerial earnings manipulation and unethical opportunistic reporting behavior. Further tests illustrate that sustainability disclosure quality can strengthen the positive relation between innate earnings quality and sustainability disclosure quantity and mitigate the negative relation between discretionary earnings quality and sustainability disclosure quantity.