Financial Reporting, Supplemental Disclosures, and Bank Share Prices

Beaver, William H.; Eger, Carol; Ryan, Stephen G.; Wolfson, Mark A.

doi:10.2307/2491230

Cited by 327 publications

(178 citation statements)

References 11 publications

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“…5 Support for this measure can be found in Chessen (1987) and Keeton (1989). 6 Support for this measure can be found in Meeker and Gray (1987), Beaver et al (1989), and Nejezchleb and Morgan (1990).…”

Section: Definitions Of Capital and Riskmentioning

confidence: 93%

Does Capital Regulation Matter for Bank Behavior? Evidence for German Savings Banks

2003

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in ______________________________________________________________________ AbstractThe aim of this paper is to assess how German savings banks adjust capital and risk under capital regulation. We estimate a modified version of the model developed by Shrieves and Dahl (1992). In comparison to former research, we impose fewer restrictions with regard to the impact of regulation on capital and risk adjustments. Besides, we complement our analysis with dynamic panel data techniques and a rolling window approach.We find evidence that the coordination of capital and risk adjustments depends on the amount of capital the bank holds in excess of the regulatory minimum (the so-called capital buffer). Banks with low capital buffers try to rebuild an appropriate capital buffer by raising capital and simultaneously lowering risk. In contrast, banks with high capital buffers try to maintain their capital buffer by increasing risk when capital increases.

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Section: Definitions Of Capital and Riskmentioning

confidence: 93%

Does Capital Regulation Matter for Bank Behavior? Evidence for German Savings Banks

2003

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“…Thus, firms with earnings near analyst expectations likely have incentives to manage earnings to beat the benchmark. 8 To date, researchers have examined a number of specific accruals to test for earnings management, including bad debt expense (Teoh, Wong, and Rao 1998), loan loss provisions (Beaver, Eger, Ryan, and Wolfson 1989;Wahlen 1994), and claim loss reserves (Petroni 1992;Beaver and McNichols 1998;Beatty, Ke, and Petroni 2002;Nelson 2000), as discussed by Healy and Wahlen 1999. Much of this literature investigates accounts unique to particular industries.…”

Section: Background and Hypothesismentioning

confidence: 99%

Last‐Chance Earnings Management: Using the Tax Expense to Meet Analysts' Forecasts*

Dhaliwal

Gleason

Mills

2004

Contemporary Accting Res

522

265

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We assert that the tax expense is a powerful context in which to study earnings management, because it is one of the last accounts closed prior to earnings announcements. Although many pre-tax accruals must be posted in the year-end general ledger, managers estimate and negotiate tax expense with their auditors immediately prior to earnings announcements. We hypothesize that changes from third-to fourth-quarter effective tax rates (ETRs) are negatively related to whether and how much a firm's earnings absent tax expense management miss analysts' consensus forecast, a proxy for target earnings. We measure earnings absent tax expense management as actual pre-tax earnings adjusted for the annual ETR reported at the third quarter.We provide robust evidence that firms lower their projected ETRs when they miss the consensus forecast, which is consistent with firms decreasing their tax expense if non-tax sources of earnings management are insufficient to achieve targets. We also find that firms that exceed earnings targets increase their ETR, but this effect is less significant. By studying the tax expense in total, rather than narrow components of deferred tax expense, our results provide general evidence that reported taxes are used to manage earnings. L'ultime instrument de gestion des résultats : l'utilisation de la charge d'impôts pour concrétiser les prévisions des analystes Keywords CondenséUtilise-t-on régulièrement la charge d'impôts de l'exercice pour parvenir aux résultats ciblés ? La chronologie de la préparation des états financiers et de la vérification indépendante porte à croire qu'il serait logique d'axer sur la charge d'impôts l'étude de la gestion des résultats dans le but d'atteindre des résultats ciblés. Compte tenu de la complexité de l'estimation de la charge d'impôts et du moment de la constatation des impôts préalablement à l'annonce des résultats, les auteurs croient que la charge d'impôts est riche et trop peu explorée dans l'étude de la gestion des résultats. Lorsque les gestionnaires sont encouragés à atteindre des résultats cibles déterminés, le compte de la charge d'impôts offre une possibilité ultime de gestion des résultats. La charge d'impôts est l'un des derniers comptes à être fermé avant l'annonce des résultats, étant donné que les autres changements liés aux bénéfices ont une incidence sur les comptes d'impôt.La charge d'impôts de l'exercice respecte également les conditions que Schipper (1989) juge nécessaires à la gestion des résultats. Selon elle, en effet, pour que les gestionnaires puissent « gérer les résultats », l'asymétrie de l'information entre gestionnaires et actionnaires doit persister. La charge d'impôts de l'exercice est difficile à estimer dans les grandes sociétés, en raison de la complexité de l'information que doivent recueillir les gestionnaires entre la fin de l'exercice et la date de l'annonce des résultats. Les éléments de la charge d'impôts totale qui présentent cette complexité et offrent la possibilité de planifier le taux d'imposition englobent la...

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“…But prior research suggests three motives for bank managers' discretionary behavior with respect to loan loss provisions: income smoothing, signaling and capital management. Several empirical studies obtain evidence consistent with a positive relation between stock returns and loan loss provisions (Beaver et al [1989], Elliot et al [1991], Griffin and Wallach [1991], Wahlen [1994]). These papers conjecture that perhaps the market interprets provisions as revelations of bank managers' private information about expected future earnings.…”

Section: Roe F Lllp Size Lev Liq Mge Fee Over Industry Macro =mentioning

confidence: 89%

Determinants of Commercial Banks' Residual Profitability: An Industry Approach

2006

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*Comments are welcome ABSTRACT:This study contrasts the reliability of Abnormal ROE (residual income scaled by beginning-of-period book value of equity) estimates based on value drivers with a contextual approach in the commercial bank industry of the OECD countries. We identify the key theoretical variables from the banking and accounting literature and analyze the impact on the prediction of future abnormal ROEs. After regressing the following year's abnormal ROE on those variables, we verify that some of them, related to the competitiveness of banks and the accounting system, play a determinant role. Our evidence suggests that the identification of 'other information' factors, by a contextual approach, might improve the empirical use of the Ohlson Model in commercial banks, especially when they act in competitive environments and/or relevant intangibles are not captured by accounting.

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Financial Reporting, Supplemental Disclosures, and Bank Share Prices

Cited by 327 publications

References 11 publications

Does Capital Regulation Matter for Bank Behavior? Evidence for German Savings Banks

Does Capital Regulation Matter for Bank Behavior? Evidence for German Savings Banks

Last‐Chance Earnings Management: Using the Tax Expense to Meet Analysts' Forecasts*

Determinants of Commercial Banks' Residual Profitability: An Industry Approach

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