Speaker: Amedeo Pugliese
Title: Changes to Accounting Policies, Corporate Transparency and Guaranteed Loans during the Covid-19 Crisis
Abstract: We show that a seemingly innocuous change to accounting policies—extending the filing period of financial statements during the Covid-19 crisis—increased late filers’ access to public guaranteed loans (PGLs) and reduced financial reporting quality (FRQ). We conjecture that, differently than in non-crisis periods, firms delayed filing (i) to exercise reporting subjectivity, useful for obtaining relief mechanisms whose access is based on accounting information; and (ii) because the costs of reduced timeliness are offset by the availability of PGLs. Our analyses on a sample covering close to the universe of Italian SMEs confirm that late filers increased access to PGLs and lowered FRQ. These findings are stronger in industries relying more on relief mechanisms, and for firms whose cost-structures incentivized subjective reporting choices to benefit from post-Covid-19 policy changes. Exploring the channels of reporting subjectivity, we find that late filers increased accrual-based components of income and expenses, reduced amortization charges, and increased capitalization of intangibles. Our key policy implication is that changes to accounting policies during crises are not cost-neutral. This is particularly true when governments concurrently introduce multiple relief mechanisms, and firms do not bear the costs of diminished information quality.
Bio: Amedeo Pugliese is Professor of Accounting at the University of Padua and holder of the Chair in ‘Business Administration and Corporate Sustainability’ jointly funded with the Chambre de Commerce et d’Industrie Paris Ile-de-France (CCI). Amedeo obtained a PhD in Business Economics (International Accounting) from the Università degli Studi di Napoli ‘Federico II’ and held positions as faculty or long-term visitor at the Indian School of Business (2012), KU Leuven (2014-2025), National Tsing Hua University (2018), QUT Business School (2010-2015), Università degli Studi di Napoli ‘Federico II’ (2008-2010), and Universitat Pompeu Fabra (2020-2023).
His research interests focus on corporate governance, financial reporting in the banking industry. Lately, his focus is on how the design of government interventions shapes governance, disclosure and performance of privately held corporations. Currently, Amedeo is an associate editor at Corporate Governance: an International Review and co-organizer of the Accounting Summer Camp. His works has been published on AAAJ, AMJ, BJM, CGIR, JBFA, JAPP, JMS, JBR.
