Abstract Problem: In today’s business environment, rising demand in financial reporting and frequent changes in accounting frameworks lead to an increased focus on reliability in Fair Value Measurement (FVM) and disclosures. The frequent changes in accounting frameworks create a challenge for managers in measuring accounting estimates accurately and have been an exceedingly difficult task. The difficult task is that of the auditors. How would auditors endorse and ensure the reliability and relevance of financial statements? Also how could they evaluate the accuracy of the measurement of fair values as presented in the financial statements? (IFAC, 2011, ISA 540). Purpose: The purpose of this thesis is to explore the methods and approaches used by auditors while auditing fair values from practical perspectives. Method: A multiple case study with pure qualitative methods and an inductive approach has been adopted. The qualitative method used a semi-structured interview to collect data.  Result: The result shows that by understanding the challenges and following the phases of auditing, auditors can maintain the quality of financial reporting. Four key audit phases are relevant to audit FVM. These are: understanding the Client-Business environment, Engagement, Internal Control, and Planning phases of auditing. Furthermore, the results revealed key challenges of auditing FVM and disclosures. These challenges are information insufficiency in the market (reliability), competence, auditors’ lack of fair value audit exposure, and the manager's leadership role and style. Moreover, as previous studies on FV have primarily relied on synthesis of academic literature, the thesis contributes knowledge to academia by using an empirical approach.

Abstract This study consists introductory survey and three essays where investors' trading responses to interim earnings announcements are studied using Finnish data. The essays are individual papers, but their topics are closely connected since they address the trading response from different angles. The essays progress from an aggregated to a more detailed examination. The first essay was conducted on daily data, whereas the second and third consist of intraday trading data. In all three essays information asymmetry is assumed to affect trading behavior around interim earnings announcements. The first article contains empirical findings regarding the effect of interim earnings announcements on investors' trading policy using Finnish data. The aim of the paper is to investigate empirically the role of pre-disclosure information asymmetry and the information content in explaining volume responses to interim earnings announcements. Evidence is provided that the trading volume response is positively associated with the information content and to some extent with the level of pre-disclosure information asymmetry. The results are in line with the theoretical trading volume proposition. However, the significance levels are lower than in similar US studies and the association between positive and negative news is slightly asymmetric. The second article finds evidence from the Helsinki Stock Exchange that the widely documented U-shape pattern in trading activity - namely heavy trading in the beginning and at the end of the trading day and relatively light trading in the middle of the day - is affected by an anticipated information event (i.e. interim earnings announcement). Before the announcement day, trading is more concentrated at the close. This is consistent with investors' heterogeneous willingness to bear expected overnight risk, which is especially prevalent before an announcement. Moreover, a slight increase on the open is evident after the announcement day. Evidence is also provided that the change in intraday trading behavior is associated with announcement-related factors, such as the range of analysts' earnings forecasts, the magnitude of unexpected earnings and firm size. Furthermore, this association is evident to some extent during the transition between trading and non-trading regimes. The third study examines whether the permanent price effects of individual trades are greater before or after an interim earnings announcement on the Helsinki Stock Exchange. If the permanent price effects are greater before the announcement this would suggest that investors believe that some traders are better informed before the interim earnings announcement than after. Using permanent price effects as a measure of price adjustment for private information, tests were performed to see whether price adjustments are greater in pre-announcement periods than in post-announcement periods. The results, based on interim earnings releases for the period 1993 to 1997 by HSE-listed firms, suggest that large trades do indeed produce greater permanent price effects before an announcement than after it. This suggests that large trades associated with price changes (especially uptick trades) before an announcement send a stronger signal to other investors than similar trades after the announcement. For small trades the results were insignificant.

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A common cliché found in annual reports is "our employees are our most important, valuable asset." While many companies claim human capital is an important asset and source of valuable earnings, there is nary a human asset found in financial statements. This research paper investigates the usefulness and importance of voluntary human capital disclosures. The 2 X 2 X 2 experiment manipulates firm financial performance, non-GAAP voluntary disclosures, and disclosure attestation to identify the extent to which human capital disclosures influence investor decision-making related to assessments of management credibility and firm value. The research described in this dissertation also investigates the interactive effects of auditor attestation on voluntary disclosure. The primary hypothesis examines whether firms providing strong human capital disclosures will have higher credibility ratings and stock price associations than firms not providing such disclosures. I find that when presented with human capital metrics, investors' assessments of credibility and firm stock price are attenuated by human capital disclosures, especially during periods of strong financial performance. Results also suggest investors key in on both non-financial and financial human capital metrics. Based on cognitive processing time, analyses indicate investors spend more time processing strong human capital disclosures. Another important hypothesis examines if firms receiving attestation services over voluntary human capital disclosures will have higher credibility ratings than firms not receiving such services. I find some evidence investors cognitively acknowledge the presence of auditor attestation reports when they are presented, and both credibility and stock price assessments are impacted by attestation services. Overall, the original research described here makes a contribution to the existing literature by providing unique insight as to how human capital information is viewed by investors. Current reporting standards focus on financial assets, physical assets, and technological/intellectual property. This can result in significant transparency issues when publicly traded firms fail to adequately disclose human capital risks. Organizations undoubtedly have substantial unreported human capital benefits and risks, which can have a potentially significant market valuation impact. The research conducted and reported in this paper illuminates the potential benefits of human capital disclosures to both internal and external firm stakeholders. / Ph. D.

The purpose of this study is to investigate how the effects of principles vs. rules based accounting standards and a potential change in the audit reporting model will affect investors' perceptions of management's reporting credibility.  The Securities and Exchange Commission is currently considering the adoption of International Financial Reporting Standards, which is considered to be a set of principles based accounting standards.  Whereas, U.S. Generally Accepted Accounting Principles are considered rules based.  Additionally, the Public Company Accounting Oversight Board is considering a possible change to the existing audit reporting model.  The audit reporting change currently under consideration would require the use of additional emphasis of matter paragraphs within the audit report to discuss areas of higher risk in the financial statements.  A sample of 196 nonprofessional investors completed an on-line 2 X 2 between subjects experiment that manipulated accounting standard type and level of auditor reporting.  Participants assessed direct and indirect measures of reporting credibility, obtained the experimental manipulations, and provided revised credibility assessments.  Changes in credibility served as the dependent variable.  The results suggest that expanded auditor reporting resulted in lower perceptions of management\'s reporting credibility. Additionally, the effects of expanded auditor reporting appear stronger under rules based accounting standards.  No main effects, however, of accounting standard type were observed.  These results contribute to the existing literature on accounting standard type, the information content of audit reports, and reporting credibility. / Ph. D.

The main purpose of this study is to examine the need to modify the theory of accounting to ensure a standardised and comparable approach when accounting and reporting on intellectual capital. A literature review is used to describe intellectual capital categories and how to measure, recognise and report these assets in the financial statements on an entity. Financial reporting operates around strict requirements that are statement of financial position biased posing significant challenges in recognising and disclosing intellectual capital. The study also uses content analysis of corporate annual reports of the top 40 companies listed on the JSE Ltd in 2009 to determine the extent of intellectual capital reporting by these companies. Measuring and recognising intellectual capital in financial reporting is not limited by the requirements in respect of statutory disclosures, discretionary and contextual disclosures are recommended. Results of the content analysis show that companies use these discretionary and contextual disclosures to communicate information on intellectual capital. / Financial Accounting / M. Com. (Accounting)

The main purpose of this study is to examine the need to modify the theory of accounting to ensure a standardised and comparable approach when accounting and reporting on intellectual capital. A literature review is used to describe intellectual capital categories and how to measure, recognise and report these assets in the financial statements on an entity. Financial reporting operates around strict requirements that are statement of financial position biased posing significant challenges in recognising and disclosing intellectual capital. The study also uses content analysis of corporate annual reports of the top 40 companies listed on the JSE Ltd in 2009 to determine the extent of intellectual capital reporting by these companies. Measuring and recognising intellectual capital in financial reporting is not limited by the requirements in respect of statutory disclosures, discretionary and contextual disclosures are recommended. Results of the content analysis show that companies use these discretionary and contextual disclosures to communicate information on intellectual capital. / Financial Accounting / M. Com. (Accounting)

Drawing on the notion of faultlines – a hypothetical dividing line that splits a group into two or more subgroups based on the alignment of one or more individual attributes – this thesis proposes a new approach to the measurement and assessment of board diversity to understand how high(er) performing boards can be built i.e., the multi-dimensional diversity index (MDI). The proposed MDI captures the joint effect of differences in director attributes at four diversity levels for 26,743 directors, namely: (i) surface (or baseline); (ii) identity; (iii) demographic; and (iv) meso-level. The current study uses three-stage least squares (3SLS) with a panel of 3,357 FTSE All-Share index non-financial companies from 2005 to 2018. To this end, a key implication of this study – and by extension, the proposed MDI – is that it challenges the conventional notion that boards are improved ‘enough’ by focusing on the micro-dimension and increasing stand-alone diversity attributes, such as gender. Collectively, this study’s results suggest that a well-diversified board incentivises managers to disclose more information on social and environmental activities in contrast to firms with an extreme faultline score. The results show that highly effective boards with a moderate faultline score at meso-level diversity (e.g., identity, information, and non-demographic attributes) lead to better accounting profitability, corporate value, and market-based performance. Remarkably, the present study finds that nationality diversity per se positively impacts corporate performance; in contrast, the dominance of male directors hinders firm performance significantly.

Cryptocurrencies are a phenomenon which has appeared more and more during the last years and is widely used by both individuals and entities. Their technological features have intrigued many, resulting in a significant growth of the number of cryptocurrencies available and an increased amount of areas of usage. More and more businesses have started using cryptocurrencies for example for investment purposes or accepting them as a means of payment. This has resulted in an urgent need of guidance from accounting standard setters to regulate how they are treated in financial statements. The result of the lack of such guidance has led to a variety of accounting treatments used in practice which have created significant challenges for preparers of financial statements. Up until recently the guidance for preparers of financial statements consisted of reports issued by the big accounting firms and recommendations from local regulatory accounting bodies. The lack of literature together with the possible consequences for the marketplace has resulted in an urgent need of guidance to avoid a patchwork of accounting treatments in the market. Furthermore, these challenges may result in possibilities of conducting earnings management or an increased information asymmetry between stakeholders and entities.   The purpose of this study is to understand and discuss the practical accounting issues and challenges related to cryptocurrencies for preparers of financial statements. The research is based on four broad themes which seek to assist the purpose by including several perspectives to the issues and challenges faced. The themes that the research is divided into are assets, revenues, disclosures and risk factors associated with cryptocurrencies. Based on these four themes the research question this research aims at answering is:   “What are the practical accounting issues and challenges for the preparers of financial statements related to cryptocurrencies?”   The empirical findings of this research suggest that there are many challenges which need to be resolved when it comes to accounting for cryptocurrencies. There are issues present in all four themes, but the main challenges which were identified revolved around asset classification, valuation, disclosures and risk factors. Furthermore, based on the empirical findings it is evident that the knowledge of practitioners is of a more practical nature while literature is more based on specific standards and paragraphs which can be applied. However, this research provides practical contributions to existing literature and includes aspects of risk consequences for accounting and financial markets at large. It is concluded that more accounting guidance is needed for cryptocurrencies to increase the usefulness of financial information and to reduce possibilities of earnings management which occur because of divergent accounting treatments.

Submitted by JOSIANE SANTOS DE OLIVEIRA (josianeso) on 2017-09-22T17:06:30Z No. of bitstreams: 1 Rafael Mayer_.pdf: 608164 bytes, checksum: 79e8cebfa30cf1e01ed57111d30fd32b (MD5) / Made available in DSpace on 2017-09-22T17:06:30Z (GMT). No. of bitstreams: 1 Rafael Mayer_.pdf: 608164 bytes, checksum: 79e8cebfa30cf1e01ed57111d30fd32b (MD5) Previous issue date: 2017-06-27 / Nenhuma / Atualmente o futebol profissional brasileiro é responsável por grandes movimentações financeiras, sendo que a maneira que estas são apresentadas atraem investidores para o meio desportivo. Percebendo a relevância que a apresentação das evidenciações contábeis de forma transparente tem para os clubes de futebol profissional brasileiros, o presente trabalho desenvolveu um estudo sobre os fatores que estão atrelados às formas de evidenciação contábil. Para isso foram analisadas as evidenciações apresentadas por 22 clubes durante os anos de 2012 a 2015. A pesquisa atrelou-se à normativa contábil, sendo utilizada como parâmetro a Resolução CFC nº 1.429 de 25 de janeiro de 2013, a qual aprova ITG 2003 – Entidade Desportiva Profissional. Aplicando-se as técnicas de Estatística Descritiva e Correlação Pearson considerou-se os Índices de Evidenciação Obrigatória, Voluntária e Total. Inicialmente considerou-se cada índice de forma individual a cada ano, para posteriormente calcular a média dos índices de todos os anos analisados para obter-se assim uma média geral. Por meio dessas análises obteve-se como resultados o Índice de Evidenciação Obrigatória de 65,70%, Índice de Evidenciação Voluntária de 7,10% e Índice de Evidenciação Total de 42,30%. A partir da correlação e dos testes de hipóteses realizadas, se percebeu que os clubes com melhores Índices de Evidenciação apresentam as seguintes características: na sua maioria são dirigidos por presidentes formados em direito; são os clubes com melhor desempenho desportivo segundo os Rankings da CBF; são os clubes com melhor desempenho econômico, medido pela margem EBITDA. Constatou-se também que os clubes com maior faturamento, com maior valor de ativo e com maior intangível apresentam também melhores índices de evidenciação. Cabe destacar ainda que, ao longo do período analisado, os índices de evidenciação tiveram melhoras significativas, dado que no último ano a evidenciação obrigatória de alguns clubes atingiu 94% de cumprimento do que requer a ITG 2003. Constata-se assim a melhora na transparência e a busca por maior legitimidade dos clubes diante de seus associados, torcedores e usuários de suas demonstrações contábeis. / Nowadays, Brazilian professional soccer is responsible for significant financial transactions, and the way these are presented can attract many investors to the sports market. Considering the relevance of transparent financial disclosures to the Brazilian professional soccer teams, this work developed a study about the factors that are related to the forms of financial disclosures. For that purpose, the financial disclosures of 22 soccer clubs concerning the years from 2012 to 2015 were analyzed. This research was based on the resolution CFC nº 1.429, January 25, 2013, which acknowledges ITG 2003 – Professional Sports Entity. Applying the methods of Descriptive Statistics and the Pearson Correlation Coefficient, the indexes of Obligatory, Voluntary and Total Disclosure Rates were tested. Initially, each index was tested individually according to its year, and after that the average index was calculated. As a result, the Index of Obligatory Disclosure Rate obtained was 65,70%; the Voluntary Disclosure Rate obtained was 7,10%; and the Total Disclosure Rate obtained was 42,30%. After the analysis of the correlation and the hypothesis tests, it was found that soccer clubs with the best Indexes of Disclosure presented the following features: most of them were run by CEOs with a Law Degree; such teams have the best sports performance attested by the CBF Ranking; these clubs also have the best financial performance, rated by the EBITDA (Earnings Before Interests, Taxes, Depreciation and Amortization) margin. It was also stated that the clubs with higher revenues, asset values and intangible values show the best disclosure indexes. During the analysis, the indexes of disclosure presented significant improvements, considering that in the last year the index of obligatory disclosure in some clubs had a compliance rate to the ITG 2003 requirements of 94%. It is perceived an improvement on the clubs transparency and the search for a better legitimacy to the associates, supporters and users of the financial disclosures.