The objective of the International Financial Reporting Standards (IFRS) is to provide useful information to the users of financial statements to assist in making economic decisions. To be useful, information has to be relevant and reliable, but the reliability of information suffers when the guidelines for the reporting of specific issues are not clear and managerial discretion arises. Write-offs are one of those accounting issues that are regularly related to earnings management. By now it is seen as common knowledge that write-offs, especially those on goodwill, do not reflect declines in asset value; rather, they are used as a device to manipulate financial reports. However, there is a striking lack of grounded theoretical research that can confirm this assessment. The aim of this dissertation is to provide valuable analytical and empirical insights on fixed asset write-offs under IFRS. In a first step, the practical implementation of IAS 36 in Europe has to be analyzed, which is best done empirically. Based on the findings from these empirical surveys, the most substantial questions remaining are subject to an in-depth analytical discussion. Since IAS 36 entails different measurement issues that have their origins in finance theory, this dissertation also aims to introduce some basic techniques from theoretical finance to accounting research. Lastly, as the analyses presented in this dissertation do not cover all open questions on fixed asset write-offs, the author hopes to encourage further research on this important topic.

Three essays are comprised in this dissertation to examine how institution and regulation frameworks affect the quality of financial reporting by banks. The empirical investigation on whether some governance mechanisms provide incentives for banks to report high quality financial information can have policy implications regarding bank regulation. Financial reporting quality is measured either by the level of earnings management or the extent of reporting conservatism. Using these two types of proxies for financial reporting quality, we examine whether reporting quality is affected by the legal protection on investors, bank supervision/regulation practices, or securities market governance mechanisms. In the first essay, we examine international differences in bank earnings management around the world. Following Leuz et al. (2003), we argue that bank earnings management is closely linked to private benefits of insiders. As a result, bank earnings management should be negatively related to institutional factors such as legal protection on investors and bank supervision policies that encourage market discipline on banks. Consistent with this prediction, we provide evidence that earnings management is less pervasive for banks in countries where investors are better protected and where supervision policies strongly encourage private-sector monitoring on banks. We also show that the legal protection mechanisms have stronger effects on curbing activities of earnings discretion, but bank supervision policies that encourage private-sector monitoring are better at limiting income smoothing activities. Our results also suggest that stringent capital requirement or strong government supervisions are less effective in reducing earnings activities of banks. In the second essay, we document that banks, especially those that are publicly traded, are conservative in their financial reporting. In particular, banks are conservative in reporting earnings changes and they incorporate more loan loss provisions when their operating cash flows decrease or when the amount of their problem loans increases. Banks also charge off more problem loans when their loan loss provisions increase. Our cross-country comparison shows that conservative financial reporting is more pronounced in countries where supervisors are empowered to take adequate actions against banks or where bank supervisory policies to encourage private-sector monitoring are more prevalent than in countries where there is less supervision or where there is less private-sector monitoring. In the third essay, we further investigate whether securities market governance explain the international differences of reporting conservatism across listing status of banks. Our results indicate that, after controlling for banking industry regulations, securities market governance has incremental effects on the reporting conservatism by public banks. The conservative reporting by public banks is stronger in countries where securities regulators are more empowered to intervene in banks for violations to securities laws. Furthermore, the stronger conservatism for public banks relative to private banks is widespread in countries with more developed bond market. The evidence suggests that public banks practice more conservative reporting than their private counterparts when debt contracting mechanisms function well.

Nuvarande redovisningsregler och principer under IFRS är till viss del öppna för subjektiva bedömningar om hur kostnader och intäkter ska redovisas. Denna subjektivitet går stundom under benämningen resultatmanipulering och innebär då att företagets resultat antingen justeras i positiv eller negativ riktning beroende på bakomliggande incitament. De subjektiva valen kan delas in i operationella åtgärder eller diskretionära periodiseringar, beroende på om de påverkar kassaflödet eller ej. Denna studie fokuserar på hur redovisningsreglerna kan användas för att uppnå resultatmanipulering och inriktas därför på de diskretionära periodiseringarna. Forskning har påvisat att möjligheten till resultatmanipulering är särskilt påtaglig i samband med att företag byter vd. Det baseras på teorierna om horisontproblemet och stålbad, att vd:n i varje given situation ämnar uppnå maximal personlig vinning. Då tidigare studier sällan undersökt den svenska marknaden avser vi uppnå kontribution om hur teorierna om resultatmanipulering är applicerbara under svenska regelverk och normer, från dess att IFRS infördes till dags dato. Via syftet att undersöka sambandet mellan ett byte av vd och resultatmanipulering har vi för avsikt att hjälpa investerare till att bättre förstå marknaden och till förbättrade investeringsbeslut. Via kvantitativ analys av årsredovisningar har vi med hjälp av den modifierade Jonesmodellen tagit fram ett mått på företags diskretionära periodiseringar. Måttet har likställts med resultatmanipulering och ställts i relation till företags vd-byten. Kopplat till horisontproblemet har nivån på resultatmanipulering jämförts mot vd-byte som sker efterföljande räkenskapsår. Teorin om stålbad har i sin tur testats genom att undersöka om resultatmanipulering nyttjas under en vd:s första verksamma år, alternativt i något av de efterföljande två räkenskapsåren. Resultaten påvisade att den svenska marknaden skiljer sig mot både bakomliggande teori och tidigare forskning. Förekomsten av horisontproblemet eller stålbad kunde inte bevisas, däremot fann studien att resultatet skrivs upp via resultatmanipulering i de två efterföljande åren efter att ett byte av vd skett. Anmärkningsvärt bevisades även att resultatminskande åtgärder utförs året innan ett rutinmässigt vd-byte inträffar. Sett till orsakssambanden bevisades därutöver att sannolikheten för att ett vd-byte kom att inträffa ökade vid användning av negativ resultatmanipulering samt när företagets lönsamhet var lägre än marknadsgenomsnittet. Studien belyser att kausalitetsproblem föreligger mellan resultatmanipulering, vd-byte och företagets lönsamhet. De exakta orsakssambanden kan studien inte förmå förklara utan vi påvisar att ytterligare forskning behöver genomföras för att klargöra det sanna orsaksförhållandet. Avslutningsvis renderar studien teoretiskt bidrag då den påvisar att teorierna om horisontproblemet och stålbad i samband med vd-byte inte stämmer in på den svenska marknaden.

This thesis comprises three studies on CEO compensation in the UK. It specifically examines the role of CEO defined-benefit pensions, compensation consultants and CEO stock options. Firstly, research on the role of executive pensions is still at a stage of infancy due to data difficulties (Sundaram and Yermack, 2007). By taking advantage of better disclosure requirements with the introduction of Directors’ Remuneration Report Regulations (DRRR) in 2002, this thesis examines the determinants and effects of CEO defined-benefit pensions. Consistent with rent extraction hypothesis (Bebchuk and Fried, 2005; Kalyta and Magnan, 2008), it finds that pensions are largely determined by CEO power over boards of directors. There is no evidence that pensions reduce the agency cost of debt as suggested by Edmans (2008) and Sundaram and Yermack (2007). Instead they increase the agency cost of equity by discouraging CEO risk-taking and reducing pay-performance relationship. Consistent with the argument in Gustman et al. (1994), Ippolito (1991) and Lazear (1990), this thesis also finds that pensions do bond a CEO to the firm she manages. Secondly, because of the lack of disclosure regarding compensation consultants used by companies, the empirical evidence is so far limited on how the practice of employing compensation consultants influences CEO pay. By taking advantage of better disclosure requirements since the publication of the DRRR (2002), this thesis examines the effect of using compensation consultants on CEO pay. Unlike Murphy and Sandino (2008), this thesis finds no evidence that firms use multiple pay consultants to justify or legitimize higher CEO pay. In light of the managerial power theory, this thesis instead finds that pay consultants are more concerned with the risk of losing business with their client firms. This latter finding explains why the use of pay consultants is associated with greater executive pay (see Armstrong, Ittner and Larcker, 2008; Cadman, Carter and Hillegeist, in press; Conyon, Peck and Sadler, 2009; Murphy and Sandino, 2008; Voulgaris, Stathopoulos and Walker, 2009). Thirdly, despite the importance of the issue, the existence of a link between the CEO stock options and earnings management is currently understudied in the UK. The UK context is appealing because of two distinctive corporate governance features that limit opportunistic earnings management. These are the absence of CEO duality in general (Cornett, Marcus, and Tehranian, 2008) and the increased outside director’s membership on boards since the publication of the Cadbury Report (1992) (Peasnell, Pope, and Young, 2000). By examining earnings management prior to stock option grant and exercise periods, this thesis adds to the study of Kuang (2008) that examines earnings management during stock option vesting periods. Overall, some evidence has been found that earnings are managed downwards prior to stock option grant periods. Consistent with the US-based studies, this thesis finds strong evidence of upward earnings management prior to a stock option exercise period. It shows that the UK’s distinctive governance features have not restrained opportunistic earnings management prior to stock option grants and exercises. In brief, this thesis provides some empirical evidence that the use of two pay components in the CEO pay package, namely, the defined-benefit pensions and stock options, do not necessarily promote CEO-shareholder interest alignment. The use of pay consultants in CEO pay-setting is also fraught with managerial influence. In support of the managerial power theory, I therefore suggest that these three factors can be abused by CEOs to extract excess compensation at the expense of shareholders. In this context, these three factors can themselves be considered as the sources of the agency cost. Future research might examine the mechanisms that can be deployed to govern the use of defined-benefit pensions, stock options and pay consultants in CEO pay design.

會計盈餘是企業向投資人傳達營運績效的指標，又投資人視公司達成分析師預測門檻與否為企業前景的重要訊號。當公司宣告策略聯盟決策時，資本市場給予正面評價，不過策略聯盟協議可能使管理當局存在機會主義與盈餘管理活動，過去文獻發現，有策略聯盟的公司，其盈餘品質較低。本文探究企業執行策略聯盟對於跨越盈餘門檻的關聯性，觀察策略聯盟事件是否為管理當局進行盈餘管理或是預期管理的工具，以迎合或擊敗分析師之盈餘預測門檻。本文實證發現策略聯盟與否及策略聯盟多寡與分析師預測門檻具有顯著正相關，而執行策略聯盟之公司從事向下引導分析師預測的機率較低，此外，實證結果亦發現，策略聯盟會降低公司管理當局採取向上調整裁決性應計數的可能性。綜上研究顯示，有策略聯盟之企業達成分析師預測門檻的機會較高，然而，其管理當局較不會選擇應計項目盈餘管理或預期管理方式來迎合或擊敗分析師之盈餘預測門檻。

本研究探討我國導入一系列公平價值會計之市場反應，本文分別從市場景氣狀況以及財報品質、盈餘管理及公司治理四個面向檢視資本市場之反應。實證分析顯示，由於公平價值會計的順循環效果，於市場景氣較佳時其異常報酬較高，反之則較低，而金融業順循環效果比一般產業來的強，而財報品質愈差、盈餘管理可能性愈高、公司治理機制愈弱的企業，股票市場對此事件的正向反應愈強，其原因可能為公平價值會計導入將有助於提升財報品質、降低盈餘管理的機會，並減少內外部人資訊不對稱的情況。 本研究結果顯示公平價值會計的採行將有助於財報透明度的提升，避免企業財報隱藏其財報增減值的部分，對投資者是具有效益的，但同時，公平價值會計將財報資訊與市場景氣連結，將造成其財報數值的波動加劇。 / This research from four aspects, business cycle, financial reporting quality, earnings management, and corporate governance, examines that Taiwan stock market reaction to the seventeen events associated with adoption of Fair Value Accounting (FVA). The empirical results reveal that due to Fair Value Accounting’s procyclical effect, when economic is booming the market tends to positively react with FVA and banking industry displays a higher procyclical effect than other industries. The study also finds that with FVA investors tend to have positive reaction on firms’ pre-adoption information with lower financial quality, higher earnings management possibility and weaker corporate governance. The findings suggest that the FVA adaption increased the quality of financial reporting, reduced earning management and decreased information asymmetry. In the meantime, the FVA links financial reporting with business cycle which might aggravate the financial reporting’s fluctuation.

本研究針對國內1996至2003年68筆受證期局強制重編財報事件為研究對象，採個案與實證兼具之研究方法，探討財報強制重編之成因、外顯徵兆與經濟後果。 就財報強制重編之成因而言，本研究發現盈餘管理誘因亦適用於財報強制重編之情形；公司治理機制中控制權與所有權偏離程度的縮小、外部審計品質的提升與關係人交易之透明與簡單化，皆可以降低財報強制重編之機率。就財報強制重編之外顯徵兆，則發現會計師出具無保留以外之意見與損益品質的下降，為公司錯誤報導財務報表之重要指標。就財報強制重編之經濟後果，實證顯示財報強制重編與財務困難間具有顯著的關聯性。此外，本研究並發現財報重編影響的報表數愈多、金額幅度愈大、涉及業外非核心盈餘與投資損益之重編時，公司發生財務困難的可能性將顯著增加。 / This research employs both case study and empirical approaches to investigate the causes, demeanors and economic consequences of a sample of firms that were enforced by the Securities and future Bureau to restate their financial statements over the period of year 1996 to year 2003. The analysis of the causes of mandatory restatements shows that the motivations of earnings management also apply to the context of financial restatements. The firms with smaller deviation of control rights from the cash flow rights, higher audit quality and more transparency in related-party transactions help alleviate the probability of restatements. The results also indicate that unclean audit opinions and decrease in quality of earnings are important demeanors of misstatement of financial statements. In addition, firms are enforced to restate their financial statements are found to be significantly related to the occurrence of financial difficulties in the future. The findings show that the severer the materiality of the restatement in terms of the length of period, dollars, and the nature of the restatements, the higher the possibility of firms will experience financial difficulties.

本文探討我國銀行業執行盈餘管理的動機、工具及經濟後果。其中本研究以增額稅負的角度去探討銀行從事盈餘管理的經濟後果，本文就經濟後果的部分主要是以稅負的角度出發，是否銀行會因為盈餘管理而產生稅負成本為主要探討方向。　　 就資本市場動機部分，本文發現上市櫃銀行確實較公開發行銀行偏好小額正盈餘變動，也就是上市櫃公司由於資本市場的壓力而有盈餘管理的行為存在。接著本文設計兩個銀行業盈餘管理工具之估計式：將壞帳提列及出售票券損益之非權衡性因素，各自建立一迴歸模型，做為本研究捕捉銀行業盈餘管理的工具與金額，本文結果未能發現我國上市櫃銀行在從事盈餘管理行為時，有所謂增額稅負效果的證據。 / This study investigates the motivation, tools and economic consequences of earnings management of bankings. In particular, the main issue of this study is to investigate whether incremental tax is the economic consequences of bankings conducting earnings management. My results show that the listed bankings that issue the stocks in securities exchange markets have stronger earnings management. In other words, listed bankings will conduct earnings management to alleviate the pressure from the capital markets. Furthermore, this study also find two estimated equations of the tools of earnings management of the bankings: (1) discretionary loans provision and (2)discretionary gain and loss on sale of securities. I find no evidence to claim there are tax costs for the bankings engaging in earnings management.

Made available in DSpace on 2010-04-20T20:51:06Z (GMT). No. of bitstreams: 3 61060100567.pdf.jpg: 20106 bytes, checksum: 1ff7adf4792cc6a22adf6d7d1a9838cc (MD5) 61060100567.pdf: 845220 bytes, checksum: 2626aeceb589dd82625e0a79d1ed7a1b (MD5) 61060100567.pdf.txt: 236945 bytes, checksum: 2c82a62e156a9da7528d1164f9df2908 (MD5) Previous issue date: 2008-02-26T00:00:00Z / Este trabalho investiga a influência da participação de gestores de private equity e venture capital (PE/VC) na governança corporativa das empresas investidas. Mais especificamente, o objetivo do presente estudo é verificar se as empresas financiadas por fundos de PE/VC estréiam no mercado acionário brasileiro com melhor qualidade de informação contábil e melhores padrões de governança corporativa do que as restantes. A amostra utilizada é composta por 69 empresas que efetuaram oferta pública inicial (IPO) na Bolsa de Valores de São Paulo (BOVESPA) no período de janeiro de 2004 a julho de 2007. Primeiramente, constatou-se que o nível de gerenciamento de resultados contábeis, ou earnings management (medido pelas acumulações discricionárias correntes) das companhias com investimento de PE/VC é significativamente inferior ao nível apresentado pelas empresas que não receberam este tipo de aporte de capital. Ademais, os resultados indicam que a influência do gestor de PE/VC na redução da manipulação de informações contábeis é mais importante exatamente no momento mais crítico, ou seja, no intervalo imediatamente ao redor da data do IPO, quando as empresas gerenciam os resultados mais intensamente. Por fim, também foram encontradas evidências de que as empresas investidas por PE/VC possuem conselhos de administração mais independentes da gestão, em comparação às demais empresas da amostra. A proporção de membros executivos e instrumentais, estreitamente relacionados à administração, é menor entre o grupo de companhias do portfolio dos fundos de PE/VC, enquanto a participação relativa de conselheiros com a função de monitoramento é substancialmente maior. Os resultados obtidos no presente estudo foram robustos a diversos testes de sensibilidade. Em síntese, as evidências encontradas levam à conclusão de que as organizações de private equity e venture capital influenciam de forma positiva as práticas de governança corporativa das empresas por elas financiadas. / This paper investigates the role of private equity and venture capital (PE/VC) organizations in the corporate governance of portfolio firms. More specifically, the objective of the present study is to verify if the PE/VC-backed companies have better financial reporting quality and corporate governance standards than others at the time of the Initial Public Offering (IPO) in Brazil. The sample is composed of 69 firms’ IPOs on the Bolsa de Valores de São Paulo (BOVESPA) in the period from January 2004 to July 2007. First, it was verified that PE/VCbacked companies have significantly lower earnings management (measured by the level of discretionary current accruals) than non-PE/VC-backed firms. Moreover, the results indicate that the influence of PE/VC managers in reducing the manipulation of accounting information is more important exactly in the most critical moment, that is, in the interval immediately around the date of the IPO, when firms manage earnings upwards more intensely. Finally, evidences have showed, as well, that PE/VC invested companies have boards of directors more independent from management, compared to other companies in the sample. The proportion of executive and instrumental members in the board, closely related to the management, is lower among the group of companies in the portfolio of PE/VC funds, while the participation of directors with the task of monitoring is substantially greater. The results obtained in this study were robust to different tests of sensitivity. In summary, the evidences found lead to the conclusion that private equity and venture capital organizations influence in a positive way the practices of corporate governance at companies they finance.

Submitted by Cristiane Oliveira (cristiane.oliveira@fgv.br) on 2011-06-03T20:46:44Z No. of bitstreams: 1 66080100265.pdf: 815492 bytes, checksum: 2a1bcbf2ff173c39a76fb108fafd747c (MD5) / Approved for entry into archive by Vera Lúcia Mourão(vera.mourao@fgv.br) on 2011-06-03T21:07:31Z (GMT) No. of bitstreams: 1 66080100265.pdf: 815492 bytes, checksum: 2a1bcbf2ff173c39a76fb108fafd747c (MD5) / Approved for entry into archive by Vera Lúcia Mourão(vera.mourao@fgv.br) on 2011-06-03T21:30:45Z (GMT) No. of bitstreams: 1 66080100265.pdf: 815492 bytes, checksum: 2a1bcbf2ff173c39a76fb108fafd747c (MD5) / Made available in DSpace on 2011-06-03T22:09:08Z (GMT). No. of bitstreams: 1 66080100265.pdf: 815492 bytes, checksum: 2a1bcbf2ff173c39a76fb108fafd747c (MD5) Previous issue date: 2011-02-08 / This paper investigates whether the institutional environment, related to the level of investor protection in Latin American countries, contributes to reducing earnings management by firms. We use four models to detect earnings management (the Jones Model, Modified Jones Model, Modified Jones Model with ROA and the Kang & Sivaramakrishna Model). Our sample comprises 313 publicly held companies listed in the stock exchanges in Argentina, Brazil, Chile, Colombia, Mexico and Peru, during the period from 2006 to 2010, a total of 9,986 statistics company-year. The discretionary accruals were estimated using a twostage regression, firstly with panel data models and then with the model residuals as the dependent variable and the level of investor protection as the independent variable. The score for each country, published in the Latin American Venture Capital Association (LAVCA) Scorecard, is used as a proxy for the level of investor protection. There is evidence in line with the theory that a better institutional environment contributes to reducing not only earnings management, but also the variability in earnings management. These findings reveal that investor protection is an important factor in the development of countries in Latin America. Countries with systems that provide incentives for private investment, with better tax treatment, creditor protection, corporate governance and a standardized accounting system, present companies with a lower level of earnings management. / Nesta dissertação analisamos se o ambiente institucional relacionado ao nível de proteção dos investidores dos países da América Latina contribuiu para uma redução na prática de gerenciamento de resultados das empresas. Utilizamos quatro modelos para detectar a prática de gerenciamento de resultados (Jones Model, Modified Jones Model, Modified Jones Model with ROA e o Kang & Sivaramakrishna Model). A nossa amostra é formada pelas empresas de capital aberto e listada em bolsa nos países da Argentina, Brasil, Chile, Colômbia, México e Peru, somando 313 empresas, para os anos de 2000 a 2009, totalizando 9.986 dados de empresa-trimestre. Utilizamos uma regressão em duas etapas, primeira usamos os modelos com dados em painel para estimar o discretionary accrual, em seguida, com o resíduo do modelo como variável dependente na segunda regressão sendo a variável independente o nível de proteção do investidor. A nota alcançada pelo país na pesquisa da Latin America Venture Capital Association (LAVCA) é usada como proxy para o nível de proteção ao investidor.. Há evidências em linha com a teoria de que um melhor ambiente institucional contribui para a diminuição não só da prática de gerenciamento de resultado, mas também as variabilidades do gerenciamento de resultados essas evidências reforçam a importância do fator proteção ao investidor para o desenvolvimento dos países da América Latina. Os países que possuem um sistema que incentive o investimento privado, com melhores tratamentos tributários, proteção aos credores, governança corporativa e padronização do sistema contábil, apresentam empresas com um menor nível de gerenciamento de resultado.