Titel: Frivillig redovisning i svenska onoterade företag. Nivå: Kandidatuppsats i företagsekonomi. Författare: Felicia Pärlefalk och Johan Wängermark. Handledare: Fredrik Hartwig. Datum: Juni 2020. Den frivilliga redovisningen har fått en ökad uppmärksamhet och forskning avseende faktorer som kan förklara företags frivilliga redovisning har genomförts i betydande omfattning. Merparten av tidigare forskning är baserad på noterade företag, studier baserade på onoterade företag har genomförts i en mer begränsad omfattning. Syftet med denna studie är av den anledningen att undersöka vilka faktorer som kan förklara den frivilliga redovisningen i svenska onoterade företag. Studien har en kvantitativ metod som utgår från en deduktiv ansats. Data har samlats in från årsredovisningar, som sedan analyserats mot företagsekonomiska teorier och tidigare forskning. Företags frivilliga redovisning utgör studiens beroende variabel och de oberoende variablerna är företags storlek, lönsamhet, skuldsättningsgrad och bransch. Studiens resultat visar att storlek är den faktor som har störst påverkan på den frivilliga redovisningen vilket förhåller sig till tidigare forskning på noterade företag. Resultatet visar att det finns ett positivt signifikant samband mellan den frivilliga redovisningen och ett företags storlek. Det finns även ett signifikant samband mellan den frivilliga redovisningen och ett företags skuldsättningsgrad, i motsats till studiens förväntningar visar dock resultatet att det sambandet är negativt. Studiens resultat visar slutligen att ett företags branschtillhörighet påverkar den frivilliga redovisningen, det finns skillnader i den frivilliga redovisningen som presenteras i årsredovisningen för olika branscher. Tidigare forskning som behandlar den frivillig redovisningen är som tidigare nämnts huvudsakligen baserad på noterade företag. Denna studie bidrar därav med ett nytt perspektiv inom området då den är utförd på onoterade företag för att undersöka förklarande faktorer. / Titel: Voluntary disclosure in swedish unlisted companies. Level: Bachelor thesis in Business administration. Authors: Felicia Pärlefalk och Johan Wängermark. Supervisor: Fredrik Hartwig. Date: June 2020. The voluntary disclosure has received increased attention and research on factors that can explain corporate voluntary disclosure has been carried out to a considerable extent. Most of the previous research is based on market-listed companies, studies based on unlisted companies have been conducted to a more limited extent. The aim of this study is for that reason to examine which factors can explain the voluntary disclosure in swedish unlisted companies. This study has a quantitative method based on a deductive approach. Data has been collected from annual reports, which are then analyst against business economic theories and previous research. Corporate voluntary disclosure is the study ́s dependent variable and the independent variables are firm size, profitability, debt ratio and industry. The study's results show that firm size is the factor that has the largest impact on the voluntary disclosure related to previous research on listed companies. The results show that there is a positive significant relationship between the voluntary disclosure and the size of a company. There is also a significant relationship between the voluntary disclosure and debt ratio, contrary to the study ́s expectations, the results show that there is a negative relationship. The study’s results also show that industry affiliation have an impact on the voluntary disclosure, there is differences in the voluntary disclosure that is presented for various industries. Previous research on voluntary disclosure is, as previously mentioned, mainly based on listed companies. This study can therefore contribute with a new perspective where it is based on unlisted companies to examine explanatory factors.

Bakgrund Humankapitalet är en viktig del i företaget med anledning av att det är essentiellt i den dagliga affärsverksamheten samt att det är en viktig immateriell resurs där kunskap, nätverk av relationer och kulturell styrka bidrar till företagets framgång. I och med samhällets utveckling består företag idag till allt större del av humankapital men trots detta råder det inte samstämmighet för hur humankapital ska redovisas i årsredovisningarna. Detta i samband med att högre krav ställs på redovisning av humankapital blir det intressant och relevant att undersöka hur företag väljer att upplysa om humankapital i årsredovisningarna. Syfte Syftet med studien är att undersöka hur företag inom bemanningsbranschen redovisar humankapital i deras årsredovisningar, samt undersöka hur redovisningen utvecklats över tid och hur den skiljer sig mellan företagen. Metod Studien är en longitudinell flerfallstudie utförd genom en kvalitativ innehållsanalys. Tidigare forskning om motiv bakom upplysningar ligger till grund för den insamlade empirin tillsammans med legitimitetsteorin, intressentteorin och institutionell teorin. Studien utgår från en deduktiv ansats med induktiva inslag. Slutsats Studiens resultat visar att de undersökta företagen upplyser genom tre teman; engagemang, arbetsmiljö och kompetensutveckling. Vidare dras slutsatsen att redovisning av humankapital inom bemanningsbranschen liknar varandra till väldigt stor del. Anledningen kan vara att samtliga företag ingår i samma bransch. Studien bidrar med bevis för att företag inom bemanningsbranschen upplyser om humankapital i stor mängd i förhållande till resterande information i deras årsredovisning. / Introduction Human capital is an important part of the company because it is essential in day-to-day business and is therefore an important intangible resource where knowledge, networks of relationships and cultural strength contribute to the company's success. The development of society contributes to the fact that companies increasingly consist of human capital, but despite this, there is no consensus on how human capital should be reported in the annual reports. This, in conjunction with higher requirements for accounting for human capital, will make it interesting and relevant to investigate how this is done. Purpose The purpose of this study is to investigate how companies in the staffing industry report human capital in their annual reports, and also to investigate how accounting has developed over time and how it differs between companies. Method This study is a longitudinal multi-case study conducted through a qualitative content analysis. The empirical data is based on previous research of the motives behind disclosures together with the theory of legitimacy, stakeholder theory and institutional theory. This study is based on a deductive approach with inductive elements. Conclusion This study's results show that the investigated companies disclose information through three themes; commitment, work environment and qualification. Furthermore, it is concluded that accounting for human capital in the staffing industry is very similar to each other. The reason may be that all companies are part of the same industry. The study provides evidence that companies in the staffing industry disclose human capital in large numbers in relation to other disclosed information in the annual report.

No description available.

<p>This study examines whether directors appointed after a Chief Executive Officer (CEO) assumed office (“co-opted” directors) affect corporate voluntary disclosure. I find evidence that firms issue management earnings forecasts less frequently when directors are co-opted. These results hold even when these directors are considered independent by regulatory definitions. Cross-sectional tests indicate that my results are stronger when firms disclose bad news, provide higher pay to co-opted directors, CEOs have greater ability to withhold disclosure, and co-opt directors early in the CEO’s tenure. I use NASDAQ/NYSE listing requirements as an exogenous shock to board co-option and find that director co-option has a causal link to less voluntary disclosure. I further show that the effect was robust to the effect of CEOs’ disclosure preferences and experience inside the firm. This study suggests that boards that appear independent using the conventional measures may fail to elicit adequate voluntary disclosure to monitor managers. </p>

The three studies in this dissertation explore the relationship between Corporate Social Responsibility (CSR) and Corporate Financial Performance (CFP). CSR consists of social, ethical, and environmental performance dimensions that have not traditionally appeared in mandated financial reports and largely reflect societal expectations for corporate behavior beyond legal and regulatory constraints. CSR is reflected in both corporate actions (performance outcomes) and voluntary reporting (disclosure), and the two are not necessarily equivalent due to managerial discretion in disclosure. Although the mechanisms remain unclear, the general consensus is that there is a positive relationship between CSR and CFP. In considering the drivers and goals of CSR, two themes emerge and are used to inform these papers: a stakeholder view of organizational relationships and the need to signal legitimacy in the face of changing social norms. A stakeholder view asserts that a wide range of groups across society are important to the long-term success and health of the organization. Legitimacy theory provides the explanation of why the stakeholder view is important to organizational success and can produce significant strategic advantages. The first study utilizes archival data in an exploration of how to model the relationship between Corporate Social Performance (CSP) and CFP. Using independent evaluations of organizational CSP from KLD STATS, I explore the CSP-CFP relationship at four different levels (overall CSP, component CSP, directional component CSP, and issue-based component CSP). I consider the effect of CSP on a range of outcome measures of CFP performance, at different levels of aggregated performance measures and linkage to stakeholder groups. Finally, I explore the pattern of significant CSP components on individual CFP outcome measures to iv determine if there is evidence for changing associations based on relevant stakeholder groups, in answer to concerns raised by prior research (Wood and Jones 1995; Orlitzky, Schmidt, and Rynes 2003). I find that (a) stock market measures are extremely insensitive to CSP; (b) the appropriate measurement level of CSP varies with the degree to which the CFP measure is aggregated and attributable to a more focused group of stakeholders; and (c) significant CSP aspects and associated CFP outcomes do vary in patterns and sensitivity. The second study examines the role voluntary social disclosure plays in economic performance through an attribute I term resilience. Resilience influences stakeholder resource allocation decisions in the face of unexpected poor performance attributable to an exogenous shock and is associated with perceived organizational legitimacy. To test this model, an experiment is conducted in which participants are asked to assess the perceived legitimacy of an organization based on information characteristics of voluntary CSR disclosure and then to make reallocation decisions in the face of poor performance caused by an industry crisis not involving the underlying organization. I find that high quality disclosure (driven by reporting accuracy) is significantly associated with greater perceived legitimacy. In turn, the legitimacy construct is significantly associated with resilience following an exogenous shock. The final study considers organizational choices in CSR disclosure to preserve credibility in the face of a crisis threatening the legitimacy of the institutional framework. Using qualitative data surrounding the turbulent 2001 – 2002 period encompassing the Enron and WorldCom scandals and the fall of Andersen, I examine organizational voluntary disclosure decisions to ascertain how they sought to preserve their own informational credibility and legitimacy in the face of a threat that did not directly involve their actions. I find that organizations responded v throughout this period by increasing signals of both transparency (greater CSR disclosure) and credibility (greater use of external sources of assurance of that disclosure). I also find that thirdparty assurance was not widely used, and remained at a steady, minimal percentage over time. Overwhelmingly, organizations turned to the implementation of an independent, external reporting framework (e.g., the Global Reporting Initiative’s widespread guidelines) that provided consistency and comparability in their reporting, made use of standardized measurements and definitions, and required specific items and measures.

Yes / The purpose of this paper is to investigate the effect of corporate board attributes, ownership structure and firm-level characteristics on both corporate mandatory and voluntary disclosure behaviour. Multivariate regression techniques are used to estimate the effect of corporate board and ownership structures on mandatory and voluntary disclosures of a sample of Libyan listed and non-listed firms between 2006 and 2010. First, the authors find that board size, board composition, the frequency of board meetings and the presence of an audit committee have an impact on the level of corporate disclosure. Second, results indicate that ownership structures have a non-linear effect on the level of corporate disclosure. Finally, the authors document that firm age, liquidity, listing status, industry type and auditor type are positively associated with the level of corporate disclosure. Future research could investigate disclosure practices using other channels of corporate disclosure media, such as corporate websites. Useful insights may be offered also by future studies by conducting in-depth interviews with corporate managers, directors and owners regarding these issues. The evidence relating to the important role that corporate governance mechanisms play in shaping the expectations relating to the level of corporate voluntary and/or mandatory disclosures may be useful in informing investor decisions, as well as future policy and regulatory initiatives. This paper contributes to the existing literature by examining the governance-disclosure nexus relating to both mandatory and voluntary disclosures in both listed and non-listed firms operating in a developing country setting.

In recent years, the impact of the permanently reinvested earnings (PRE) assertion on the financial reporting environment has grown tremendously. Under Accounting Standards Codification (ASC) 740, a firm making the PRE assertion is able to avoid recognizing residual U.S. taxes on earnings of its foreign subsidiaries so long as it reinvests those earnings outside of the U.S. Suboptimal reinvestment is a potential consequence for PRE-asserting firms due to limited reinvestment opportunities abroad. Suboptimal foreign reinvestment, typically high amounts of reinvestment in financial assets, may be viewed negatively by financial statement users, particularly those users concerned with the default risk of a firm. The disclosure of PRE-related information varies substantially and the actual degree of compliance with this accounting standard has been questioned by the Securities and Exchange Commission (SEC). While firms may believe it is advantageous to obscure their PRE-related activity due to media or political concerns, recent academic literature has highlighted a negative relation between disclosure quality in financial statements and credit risk. The purpose of this study is to examine the relations among foreign reinvestment strategy, PRE disclosure, and long-term credit ratings. First, I examine the direct effect of a firm's reinvestment strategy on its long-term credit rating. Second, I investigate the relation between a firm's reinvestment strategy and its choice to disclose PRE-related information. Third, I study the relation between a firm's choice to disclose PRE-related information and its long-term credit rating. Finally, I examine the potential attenuating effect of the PRE disclosure on the negative relation between financial reinvestment and credit ratings. Using hand collected PRE data for Fortune 500 firms from 1997-2010, I find a negative relation between the intensity of a firm's reinvestment in financial assets and its (1) long-term credit rating and (2) choice to disclose PRE-related information. Furthermore, I find a positive relation between a firm's choice to disclose PRE and its credit rating. / Ph. D.

Syfte: Den externa redovisningen har som syfte att förmedla en rättvisande bild av företagets ställning och riktar sig till företagets externa omgivning. Årsredovisningar visar inte endast företagens finansiella prestanda utan är även ett sätt att kommunicera med omgivningen. Det som publiceras i årsredovisningar styrs av olika regelverk. Förutom att redovisa det som är lagstadgat, kan företag även redovisa ytterligare information, vilket kallas för frivillig redovisning. Företag inom sjukvårdssektorn utstår ofta offentlig granskning, och genom frivillig redovisning kan de erhålla och bibehålla sin legitimitet. Syftet med denna studie är att studera sambandet mellan företagsspecifika egenskaper och mängden frivillig redovisning i svenska börsnoterade företag inom sjukvårdssektorn, samt vilken typ av information den frivilliga redovisningen består av. Studiens frågeställningar lyder: vilka faktorer påverkar mängden frivillig redovisning och vilken typ av frivillig information redovisas. Metod: Metoden som har tillämpats i denna studie är en kvantitativ metod. Det har först genomförts korrelationsanalyser mellan de oberoende variablerna, därefter har en multipel regressionsanalys genomförts mellan den beroende variabeln och respektive oberoende variabel. Insamling av data för de oberoende variablerna har skett via databasen Retriever och från Nasdaq Stockholm (Stockholmsbörsen). Insamling av data för den beroende variabeln har gjorts manuellt från varje företags årsredovisning från år 2021. Studiens urval består av 58 företag, från en population av 60 företag. Resultat och slutsats: Den slutsats som fastställs är att faktorerna lönsamhet, likviditet och ägarstruktur har ett samband med mängden frivillig redovisning. Av de olika områdena redovisas allmän information i genomsnitt mest, och aktierelaterad information i genomsnitt minst. Företagen uppfyller dock ungefär i genomsnitt lika stor andel inom varje område i indexet. Därav finns inget utstickande mönster avseende vilket område som redovisas mest respektive minst. Examensarbetets bidrag: Svenska bolag inom specifika sektorer är relativt outforskade då majoriteten av tidigare studier är generella och inkluderar företag från olika branscher. Tidigare forskning fokuserar främst på vilka faktorer som påverkar mängden frivillig redovisning, och mindre på vad den frivilliga redovisningen faktiskt innehåller. Därmed bidrar detta arbete med en studie avseende frivillig redovisning i svenska bolag på sektornivå på senare år. Förslag till fortsatt forskning: Förslag för framtida liknande studier är att studera frivillig redovisning inom andra sektorer än sjukvårdssektorn. Dessutom är det möjligt att studera onoterade företag eller företag utanför EU då tillämpningen av regelverk varierar för dessa. Framtida studier kan även studera sambandet mellan frivillig redovisning och ytterligare företagsspecifika egenskaper än de som beaktas i denna studie. / Aim: Financial management aims to convey a justified image of a company's financial performance and is addressed to the company's external environment. Annual reports are not only a way to present the financial performance but also a way to communicate with external stakeholders. Information that’s published in the reports are regulated by differentregulations. Besides obligated disclosure, companies also choose to publish additional information, this type of information is called voluntary disclosure. Companies within the healthcare sector are often publicly scrutinized, thus they frequently disclose voluntarily in order to attain and maintain legitimacy. The aim of this study is to examine the relationship between company characteristics, and the extent of voluntary disclosure in listed companies within the Swedish healthcare sector and which type of information the voluntary disclosure consists of. The research questions formulated are: what are the determinants of voluntary disclosure, and what type of information is voluntarily disclosed. Method: The methodology used for this study is a quantitative method. Initially a correlation analysis was done, to determine the correlation between each independent variable. Thereafter a multiple regression analysis was implemented to determine the relationship between the dependent variable and each of the independent variables. The data for the independent variables was collected from the database Retriever and Nasdaq Stockholm (Stockholm Stock Exchange). The data for the independent variable was collected manually from annual reports for the fiscal year 2021. The sample size for this study is 58 listed companies, from a population of 60 companies. Results and conclusion: The results indicate that the determinants profitability, liquidity, and ownership structure are statistically associated with the extent of voluntary disclosure. On average, general information was disclosed the most, and stock related information was disclosed the least. However, the companies fulfill roughly the same percentage in each area of the index on average. As a result, there is no outstanding pattern regarding which area is disclosed the most and the least. Contribution of the thesis: There is a lack of studies of Swedish companies within specific sectors, since past studies are more general and include companies from different industries. In addition, prior studies focus more on the determinants of voluntary disclosure and less on what it consists of. Therefore, this thesis contributes to a more recent study of voluntary disclosure within Swedish listed companies within a specific sector. Suggestions for future research: A suggestion for future studies like this one, may be studying voluntary disclosure within different sectors. Another suggestion may also be studying non-listed companies or companies outside of the EU, since implementation of regulations vary amongst these. It may also be of interest to study other determinants of voluntary disclosure than those considered in this study.

Bakgrund och problemdiskussion: Allt fler företag redovisar information kring CSR i sina årsredovisningar. Där en stor del av tidigare studier utgått från att företag använder CSR-redovisningen på ett standardiserat sätt. Vilket kan förklaras av att CSR-standarders framväxt utgör en ram för hur företagen ska rapportera denna information. Samtidigt kan en ökad konkurrens leda till att företagen blir mer benägna att differentiera sig för att uppnå olika fördelar. Studier har även funnit att företagen använder sin CSR-redovisning på ett differentierat sätt. Därför kan det vara intressant att gå i en motsatt riktning gentemot merparten av tidigare studier och undersöka hur företagen kan använda CSR- redovisningen som en strategi. Där företagen kan implementera en viss strategi, genom att utmärka sig i sin CSR-redovisning och förmedla sitt CSR-arbete för sina intressenter på ett visst sätt. Det kan även vara intressant att undersöka hur karaktärsdragen hos företagets beslutsorgan (bolagsstämma, styrelse &amp; Vd) påverkar hur företaget utmärker sig. Då tidigare studier visat att karaktärsdragen har en inverkan till vilka strategiska val ett företag fattar. Syfte: Syftet med studien är att identifiera hur de svenska börsnoterade bolagen väljer att utmärka sig i sin CSR-redovisning och undersöka vilka karaktärsdrag hos företagets beslutsorgan som kan tänkas ligga bakom detta strategiska val. Metod: Studien utgick från en abduktiv forskningsansats, där vi växelvis använt teori och empiri. Detta då dominerande bolagsstyrningsteorier tillsammans med subjektiva bedömningar från företagens årsredovisningar använts för att skapa en förståelse för hur företagen kan utmärka sig med sin CSR-redovisning. Därefter har en statistisk undersökning utförts, där datainsamlingen hämtats ifrån 183 företags årsredovisningar. Detta för att undersöka hur beslutsorganens karaktärsdrag kan kopplas till företagens sätt att utmärka sig i CSR-redovisningen. Resultat och slutsatser: Studien fann att företagen kan utmärka sig i sin CSR-redovisning enligt två olika kategorier, det vinstmaximerande och ansvarsfulla företaget. Det fanns å ena sidan företag som ville framstå mer lönsamt och i större grad fokusera på att tillfredsställa sina aktieägare. Å andra sidan fanns det företag som ville framstå som mer ansvarsfulla, med fokus på att skapa mervärde längs hela värdekedjan. Det visade sig även att karaktärsdragen ägarkoncentration, könsfördelning i styrelse, styrelsestorlek och Vd varaktighet har en inverkan för vilken strategi företagen väljer att utmärka sig enligt. / Background and problem: More and more companies report information about CSR in their annual reports. Where a large part of previous studies assumed that companies use CSR-reporting in a standardized way. Which can be explained by the emergence of CSR- standards which provides a framework for how companies should report this information. At the same time, increased competition may lead companies to become more prone to differentiate themselves, to obtain various benefits. Studies have also found that companies use their CSR-reports in a differentiated manner. Therefore, it might be interesting to go in an opposite direction and examine how companies can use the CSR- report as a strategy. Where companies through CSR-reporting can differentiate by using a certain strategy to communicate its CSR-work. It may also be interesting to investigate how the characteristics of the company's decision-making bodies (General Meeting, Board of directors &amp; CEO) affect how the company differentiate. As previous studies have shown, characteristics have an impact to the strategic choices a company makes. Purpose: The purpose of the study is to identify how the Swedish listed companies choose to differentiate in their CSR-reporting and investigate the characteristics of the company's decision-making bodies who might be behind this strategic choice. Method: The study was based on an abductive research approach, where we alternately used theory and empirics. This is because the dominant corporate governance theories along with subjective assessments of the company's financial statements where used to create an understanding of how companies can differentiate within its CSR-reporting. A statistical study has also been made, where the data collection was gathered from 183 companies’ financial statements. To examine how the decision-making bodies characteristics can be linked to the way companies differentiate in their CSR-reporting. Result and conclusion: The study found that companies can differentiate in their CSR- reporting according to two different categories, the profit maximizing and responsible company. There was, on the one hand, companies that wanted to appear more profitable with a greater degree of focus on satisfying their shareholders. On the other hand, there were companies that wanted to seem more responsible, with a focus on creating added value along the entire value chain. It was also found that the characteristics of ownership concentration, gender distribution within the board, board size and duration of the CEO has an impact on what strategy the companies choose to differentiate in accordance with.

Studien har gjorts för att minska bristen på forskning om vilseledande information via figurer i årsredovisningar och på så vis bidra till diskussionen om hur figurer tillämpas i redovisningen. Syftet med uppsatsen är att förklara hur vilseledande av information via figurer i årsredovisningar påverkas av företagsspecifika egenskaper. Studien har tagit ett positivistiskt perspektiv och tillämpat en deduktiv ansats för att kunna uppfylla studiens syfte. Vidare antas det att företagsledningen agerar opportunistiskt och kommer vilseleda informationen i figurerna som presenteras i årsredovisningarna. Därför bygger den bakomliggande teorin på agentteorin, Positive Accounting Theory och Impression Management. För att skapa hypoteserna har tidigare forsking gällande frivillig redovisning och vilseledande av figurer använts. Den empiriska metod som användes var en dokumentstudie där syftet var att samla in kvantitativa data från årsredovisningar. Studien är gjord på totalt 152 företag som är listade på Stockholmsbörsen och hela 1149 figurer mättes för att upptäcka mängden vilseledande information. Studiens resultat visar att företag som anlitar en revisionsbyrå från Big 4 presenterar färre vilseledande figurer. Dessutom verkar det som att företag som betalar ut en hög ersättning till styrelsemedlemmar och VD redovisar en större andel vilseledande figurer. Studien kan också påvisa att i företag med en större ägarspridning förekommer det färre vilseledande figurer. Avslutningsvis bidrar studien med bevis som indikerar att högre agentkostnader påverkar hur företagsledningen agerar, eftersom en högre ägarspridning leder till mindre vilseledande information via figurer. Där finns även bevis för att företagsledningen använder sig av vilseledande av figurer för att förbättra intrycket av sig själva och på så vis rättfärdiga en hög ersättning. / To reduce the lack of research on graph distortion this study is made to contribute to the discussion about graph practice. The purpose of the thesis is to explain what firm characteristics affect graph distortion in annual reports. In order to fulfil this purpose, a positivistic perspective and a deductive approach was applied. With the assumptions that management act opportunistically and distorts the information disclosed in the graphs presented in the annual reports, Agency Theory, Positive Accounting Theory and Impression Management are used as underlying theories. Further, prior research regarding voluntary corporate disclosure and graph distortion are used in order to derive the hypotheses. The empirical method used has been a document study where the purpose was to collect quantitative data. In total 152 companies listed on the Stockholm Stock Exchange were included in the study and a comprehensive amount of 1149 graphs measured to detect their distortion. The findings of the study show that companies hiring an audit firm from the Big 4 disclose less distorted graphs. In addition, companies that pay a higher compensation to the board members and CEO seem to present more distorted graphs. The study also found that for companies with a more dispersed ownership less graph distortion occurs. However, the findings do not support the view that firm size and debt ratio affect the level of graph distortion within the annual report. Concluding, the study contributes with evidence indication that higher agency costs affect management’s actions regarding graph distortion because a more dispersed ownership leads to less graph distortion. Also there is evidence that managers try to justify high compensation by improving impression of themselves through graph distortion.