Lorenz MalärEmpirische Analyse der ökonomischen Auswirkungen von drei Aspekten der externen Rechnungslegung – freiwilliger Publizität, Ergebnisglättung und realer Bilanzpolitik

About this book deutschenglish

Given the increase in regulations observable in accounting practice over the last few decades, it is essential to understand how accounting decisions affect the capital market. This book explores the economic consequences of several aspects of accounting behavior. Based on three distinct empirical studies, the book analyzes a broad range of economic consequences emanating from voluntary disclosure practices, income smoothing, and real earnings management.

The first study examines the impact of voluntary disclosure on information asymmetry in the capital market. Based on the analysis of the disclosure behavior of a sample of listed companies, the study shows a negative relationship between the level of voluntary disclosure, proxied by a disclosure rating based on annual reports, and information asymmetry. The economic implication of this result is that firms with a high level of voluntary disclosure are potentially able to achieve a reduction in their cost of equity capital by lowering the information asymmetry among capital market participants.

The second study analyzes the capital-market effects of income smoothing. Prior research has not reached a theoretical or empirical consensus on whether earnings smoothing provides or rather garbles information. The results reveal the prevalence of two countervailing effects emanating from income smoothing practices. On the one hand, the innate component of earnings smoothing, which is driven by the firm’s operating environment, increases transparency in the market. On the other hand, discretionary income smoothing, which is not supported by a stable underlying economic development as proxied by cash flows, creates opacity. This leads to higher information asymmetry and lower liquidity and therefore to adverse capital-market consequences. Hence, the results provide evidence that capital market participants distinguish between different sources of earnings smoothness.

Finally, the third study investigates the economic consequences of real earnings management, i.e. the structuring of real operating transactions to reach certain earnings targets. The objective of the study is to analyze whether or not real earnings management activities have adverse impacts on the information risk perceived by investors and thus create adverse selection problems in the market. The study focuses on a specific incentive structure, namely the avoidance of losses through real earnings management activities. The results suggest that engaging in real earnings management to reach the zero earnings target exacerbates the information uncertainty perceived by investors and consequently triggers adverse economic consequences.

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