This study examines the relationship between stock prices and accounting figures, primarily the book value of equity and earnings, as well as the market perception of accounting choices implemented by companies. Market event studies from late sixties have initiated numerous of researches, and the majority of contemporary results were consistent with strong belief in the market efficiency theory. The book value of equity and earnings have been proved to have the highest explanatory power of future stock prices. Other accounting-related issues, like inventory methods or accounting for business combination, were proven to have reliable impact on the stock prices. Moreover, the cash flow implications triggered by the accounting change are not an indispensable condition to influence the stock price level. Although a great body of research has treated the relationship between accounting choices and stock prices, a clear-cut mechanism is not well specified. The evidence is inconsistent, and the consequences of accounting change are difficult to measure. However, the accounting figures included in financial statements remain the most important measure of the companies’ performance. Due to the economic and technical progress, which considerably modified the structure of companies and the environment in which they operate, further studies are advisable in order to maintain the reliability of accounting figures on significant level.

<p>This study examines the relationship between stock prices and accounting figures, primarily the book value of equity and earnings, as well as the market perception of accounting choices implemented by</p><p>companies. Market event studies from late sixties have initiated numerous of researches, and the majority of contemporary results were consistent with strong belief in the market efficiency theory. The</p><p>book value of equity and earnings have been proved to have the highest explanatory power of future stock prices. Other accounting-related issues, like inventory methods or accounting for business combination, were proven to have reliable impact on the stock prices. Moreover, the cash flow implications triggered by the accounting change are not an indispensable condition to influence the stock price level. Although a great body of research has treated the relationship between accounting</p><p>choices and stock prices, a clear-cut mechanism is not well specified. The evidence is inconsistent, and the consequences of accounting change are difficult to measure. However, the accounting figures</p><p>included in financial statements remain the most important measure of the companies’ performance. Due to the economic and technical progress, which considerably modified the structure of companies</p><p>and the environment in which they operate, further studies are advisable in order to maintain the reliability of accounting figures on significant level.</p>

Este trabalho tem o objetivo de analisar os determinantes e as conseqüências econômicas das escolhas de práticas contábeis sob a ótica da Hipótese dos Covenants Contratuais. Mais especificamente, este estudo investiga se os administradores de empresas brasileiras com registro na Comissão de Valores Mobiliários (CVM) e que efetuaram captações de longo prazo (debêntures e créditos bancários) realizam mudanças de práticas contábeis voluntárias com o objetivo de evitar a violação de covenants (baseados em números contábeis) estabelecidos nos contratos de dívida. Na análise desse fenômeno, estudos anteriores sugerem que os administradores de empresas adotam práticas contábeis pouco conservadoras (que aumentam o resultado e o patrimônio líquido) com o objetivo de evitar a violação de covenants contábeis. Com base na análise de 125 companhias brasileiras (com registro na CVM) que captaram recursos de longo prazo no mercado de crédito via debêntures e créditos bancários (no período de 2000 a 2006), e utilizando testes estatísticos univariados (histogramas empíricos e teste qui-quadrado) e multivariados (regressão logística), foi possível demonstrar que as referidas empresas não realizam mudanças de práticas contábeis voluntárias com o objetivo de evitar a violação de covenants contábeis. Os principais motivos que fundamentam essa conclusão são: (a) os baixos custos nos casos de violação dos covenants contábeis; (b) a ativa normatização e fiscalização contábil das agências reguladoras de serviços públicos, especialmente no setor de energia elétrica; e (c) as empresas, em geral, já utilizam práticas contábeis pouco conservadoras. Tal resultado permite supor que, a fim de evitar a violação dos covenants contábeis, os administradores adotam ações reais que impactam o fluxo de caixa da companhia. A principal contribuição dos resultados observados é demonstrar que, apesar da existência de covenants contábeis nos títulos de dívida emitidos pelas empresas brasileiras analisadas, não existem evidências significativas de mudanças de práticas voluntárias oportunistas para evitar a violação dos covenants contábeis. Esse resultado indica a presença da Abordagem da Eficiência Contratual no contexto das empresas que realizam captações de recursos de longo prazo no mercado de crédito no Brasil. / The present study aims to analyze the economic motivations and consequences of accounting choices under the Debt Covenants Hypothesis. Specifically, this study investigates if managers of Brazilian companies that issued long-term debts make changes in accounting methods in order to prevent the breaking of covenants (based on accounting numbers) established in debt contracts. In the analysis of this fact, prior studies suggests that managers of those companies adopt accounting methods less conservatives (that increase earnings and equity) with the objective of preventing the breaking of debt covenants. Through the analysis of 125 public Brazilian companies that issued long-term debts (in the period 2000-2006), and using univariate (real histogram and chi-square test) and multivariate (logistic regression) statistical tests, it was possible to demonstrate those companies do not make changes in accounting methods in order to prevent the breaking of covenants established in debt contracts. The main reasons that underlying these results are: (a) the low costs in breaking debt covenants; (b) the active regulation and oversight public services regulatory agencies, especially in electric energy sector; (c) Brazilian companies, in general, already adopt less conservative accounting methods. Such results, allow us to suppose that managers, in order to prevent the breaking of debt covenants, take real actions that impact the companies cash flow. The main contribution of the observed results is to demonstrate that there is no evidence of significant opportunistic accounting choices with the purpose of preventing the breaking of debt covenants. Such results suggest the presence of the Contractual Efficiency Approach in the context of the companies that issued long term debts in Brazil.

The purpose of this research is to examine whether managers of troubled firms engage in income-increasing earnings management for capital market purposes to maintain a listing on the NASDAQ National Market. Troubled firms are defined as those firms whose share price has fallen below the specified dollar-per-share minimum mandated by the market. The two hypotheses attempt to answer two separate, but interrelated questions: First, do managers of troubled firms engage in earnings management more in periods of distress than in periods of non-distress? And second, do managers of troubled firms engage in earnings management more than similar firms not in jeopardy of delisting? Both a time-series and cross-sectional approach is used to answer these questions. The initial grouping consisted of all NASDAQ National Market firms with a share price of $1 or below at some point during the period from March 1997 through September 2002. The final sample consisted of 215 firms for the time-series analysis and 495 firms for the cross-sectional analysis. Two accrual expectation models were used, including the Jones (1991) and the modified Jones Model (Dechow, Sloan, and Sweeney, 1995). The results were unable to confirm that managers engage in this behavior, and similar to the results of DeAngelo, DeAngelo, and Skinner (1994), the findings suggest that managers' accounting choices primarily reflect their firms' financial difficulties, rather than attempts to inflate income through discretionary accruals. After controlling for reverse stock splits, dividend reductions, going-concern issues/bankruptcy, and changes in management, the models found significantly negative abnormal accruals. The dissertation concludes with a discussion of possible interpretations for the findings. / Ph. D.

No description available.

Under Accounting Statement CPC 38, from 2010 on Brazilian companies started adopting accounting standards correspondent to IAS 39 regarding hedge accounting, whose disclosure is optional and, in cash flow hedge operations, may avoid losses disclosure in the income statements due to deferred values in other comprehensive income (OCI), promoting better earnings disclosure. In this scenario, by means of statistical models we investigate whether firm\'s financial exposure to currency risk and the high exchange rate depreciation environment promote the deferral of losses on firm\'s OCI and, in addition to the tax deferral on exchange gains and losses, the hedge accounting choice for 379 Brazilian listed companies between 2010- 2017. Our results show that firms\' high leverage in foreign currency, the high exchange rate variation on country level and the tax deferral choice influence positively the hedge accounting choice and, consequently, reduce the disclosure of losses on income statements, evidencing potential earnings management activity, since OCI\'s balances are not entirely understood by analysts and investors (even the most sophisticated). Our paper contributes to the disclosure, accounting choice and earnings management theories, highlighting the claim for enhancement of financial instruments accounting standards on uniformity and comparability. / Com o CPC 38, a partir de 2010 as companhias brasileiras passaram a adotar as normas contábeis correspondentes ao IAS 39 no tocante à contabilidade de hedge, cuja divulgação é facultativa e, especificamente em relação ao hedge de fluxo de caixa, pode diferir a divulgação de perdas cambiais em outros resultados abrangentes (ORA) e, consequentemente, promover o disclosure de melhores resultados. Nesse cenário, por meio de modelos estatísticos o estudo investiga se a alta exposição à variação cambial em um ambiente de alta depreciação da taxa de câmbio resulta em diferimento de perdas em ORA e, em conjunto com o diferimento da tributação da variação cambial, promove a escolha da contabilidade de hedge para 379 companhias abertas brasileiras no período de 2010 a 2017. Os resultados evidenciam que a alta alavancagem em moeda estrangeira, a alta depreciação do câmbio e o diferimento da tributação impactam positivamente a escolha pela contabilidade de hedge e, consequentemente, reduzem a divulgação de perdas cambiais no resultado, apontando a existência de gerenciamento de resultados, já que os saldos em ORA não são corretamente interpretados pelos analistas e investidores, mesmo os mais sofisticados. O estudo contribui para as teorias de disclosure, de escolha contábil e de gerenciamento de resultados, e aponta para a necessidade de aprimoramento das normas contábeis relativas a instrumentos financeiros em termos de uniformidade e comparabilidade.

This thesis contributes to an understanding of capital budgeting and accounting practice. The factors affecting practice are of special research interest. It is also investigated whether practice diverges from what is prescribed by finance text books and accounting standards/frameworks. The overarching research question posed in this thesis is: “What capital budgeting and accounting choices are made by top management in practice, and how can these choices be explained?”. The thesis consists of four papers that address this issue. The first two papers focused on capital budgeting choices. Findings emphasised that the use of sophisticated capital budgeting and cost of capital estimation methods such as NPV and CAPM was widespread in Swedish listed companies. However, also unsophisticated accounting based methods were employed. Overall, findings suggested that Swedish companies used capital budgeting and cost of capital estimation techniques less often than did U.S./continental European companies. Other interesting findings were changes over time. Over time, the use of sophisticated methods increased and the use of unsophisticated methods decreased. This indicated a closing of the theory-practice gap. Finally, size was generally positively related to more extensive use of methods. The last two papers focused on accounting choices. Findings showed that non-preparers supported amortisation of goodwill to a greater extent than did preparers. Preparers instead supported the goodwill impairment-only approach. It was suggested that economic consequences could explain why preparers supported the goodwill impairment-only approach. When the impairment-only approach subsequently was introduced by the International Accounting Standards Board (IASB), Swedish and Dutch preparers however only disclosed slightly more than 60% of the assumptions underlying the impairment test, after three years of learning. Moreover, findings showed that the level of compliance with the IASB’s disclosure requirements was associated with industry; financials were less compliant than were non-financials. Findings also showed that Swedish and Dutch companies were more compliant in 2008 than they were in 2005, which suggested learning over time. Finally, in 2005 the disclosure compliance level was higher in Sweden than in the Netherlands. Three years later, 2008, the difference was eliminated, thus indicating convergence.

This study examines revenue recognition methods used by high technology firms for sales to distributors. Revenue is either recognized when products are delivered to distributors (sell-in) or when distributors resell products to end-users (sell-through). This is the first empirical study to examine the firms that use these revenue recognition methods and the quality of financial information reported under the methods. I use a logistic regression to compare 479 firm-year observations in the computer and electronic equipment industries that use either the sell-in method or the sell-through method. I find that firms with higher growth opportunities and strong corporate governance are less likely to use the sell-in method. In addition, corporate governance strength moderates the association between use of the sell-in method and both capital requirements and management incentive compensation. Using ordinary least squares regression, I also examine two proxies for financial information quality: the ability of accounting information to predict future cash flows and the association between accounting information and stock returns. Results of these regressions suggest that financial information quality is higher under a deferred revenue recognition method (sell-through). Specifically, the ability of accounting information to predict future cash flows and the association between accounting information and returns are both higher for sell-through firms than for sell-in firms. The results of this study suggest that systematic differences exist between sell-in firms and sell-through firms and financial information quality differs between the two revenue recognition methods.

There are several major research papers on accounting choice that intends to explain and analyze how the intangible assets should be classified. However, there are not many theses or major research papers on football clubs and the accounting choice they make when it comes to the accounting of one of their most important assets, their players. This thesis intends to explain and analyze why Swedish football clubs makes the accounting choice that they make. Furthermore, the intentions are to explain the consequences of these choices and find out if that affects the football clubs vision of true and fair view. The methods that will be used for this study is an examination of the financial documents along with interviews. One of the theories in the study is the institutional theory, which explains that organizations in the same industry tend to become more alike. The study has shown that Swedish football clubs are given a choice, to present the player contracts on the balance sheet or as an expense in the income statement. The majority of the clubs presented the player contracts in the balance sheet. The main reason for that is said to be that the costs can be spread over several years, which means it will be easier to meet the financial requirements from the Swedish Football Association.

Este trabalho se baseia na teoria de escolhas contábeis, pautadas nas premissas: (i) eficiência de contratos; (ii) assimetria de informação e (iii) comportamento oportunista (Holthausen, 1990). A adoção inicial do IAS40/CPC 28 - Propriedades para Investimento permite a escolha do método de custo ou valor justo para mensuração. Foi utilizada uma amostra de 36 empresas abertas que possuíam propriedades para investimento cujo método de avaliação foi divulgado no ano de 2010. O método de mensuração é a variável dependente, uma dummy para escolha do custo ou valor justo. As variáveis independentes analisadas foram: Tamanho; Endividamento; Proporção de Propriedades para Investimento com relação ao Ativo Total; (ROE) Return on Equity, e Lucro Líquido. Através de uma Regressão Logit no software Stata® avaliaram-se quais variáveis são mais influentes na escolha contábil. O achado mais relevante foi a proxy para tamanho de que os custos políticos reduzem a probabilidade de utilizar o valor justo, considerando um nível de significância estatística de 5%. As variáveis constituem-se em: Endividamento, Proporção de Propriedades para Investimento com relação ao Ativo Total e Lucro Líquido, sendo explicativas para escolha do valor justo, considerado um nível de significância estatística de 10%. A variável ROE (returno n equity) não se mostrou significativa. Considerando o ponto de corte (cutoff) de 0,5, o percentual de acerto do modelo foi de 88,89%, ou seja, das 36 observações, 32 foram classificadas corretamente. Por fim, em termos normativos o estudo pode servir aos órgãos reguladores, pois em 2010, das 75 empresas que apresentavam propriedades para investimentos nos balanços, somente 24 sequer mencionaram a forma de avaliação. / This study is based on accounting choice theory, which premises are: (i) contractual efficiency; (ii) information asymmetry and (iii) managerial opportunism reasons could determinate the choice. At the first time adoption for IAS 40 - Investment Properties which allow the choice between fair value or cost model for evaluation. It was used a sample of 36 listed companies which disclosure the evaluation method for 2010. A dummy was used as dependent variable for the choice between cost or fair value model and the independents variable are: Size; Leverage; Rate of Investment Properties against Total of Assets; Return on Equity and Income. Using a logit regression on software Stata® evaluates which variable more influence in the accounting choice. The most relevant finding is the proxy size which political costs decrease the possibility to use fair value, for 5% of statistical significance. Ther variables are: Leverage, Rate of Investment Properties against Total of Assets, that are relevant for choosing fair value, for 10% of statistical significance. The variable ROE is not significant. With a cutoff as 0,5 the percentage of accuracy for the model is 88,89%, which means 36 observations, 32 are correctly classified. In the end, in a normative way, this study may help the accountant setters. In 2010, for 75 listed companies which has investment properties in their financial report only 24 companies not even mention the evaluation method.