Ownership Structure and Accounting Method Choice: A Study of European Real Estate Companies

Mäki, Juha; Somoza-Lopez, Antonio; Sundgren, Stefan

doi:10.1080/17449480.2016.1154180

Cited by 14 publications

(16 citation statements)

References 40 publications

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“…Therefore, the size hypothesis is not supported. A possible reason is that large firms may consider that better performance ratios of the fair value model will have a positive impact on access to and the price of external funds (Mäki et al, 2016).…”

Section: Regression Resultsmentioning

confidence: 99%

“…Previous studies also suggest that firms having concentrated ownership relying less on the reporting of fair values through the financial statements to mitigate information asymmetry (e.g. Müller et al, 2008;Mäki et al, 2016). Missonier-Piera (2004) and Isa (2014) find that the more the firm's ownership structure is diluted, the more its managers will tend to adopt income increasing strategies.…”

Section: Ownership Concentrationmentioning

confidence: 99%

“…Missonier-Piera (2004) and Isa (2014) find that the more the firm's ownership structure is diluted, the more its managers will tend to adopt income increasing strategies. Müller et al (2008), Israeli (2015) and Mäki et al (2016) find that firms that have more dispersed ownership are more likely to choose the fair value model. Therefore, the following hypothesis is tested: H5: Ownership concentrated firms are more likely to choose the cost model Sandra Alves 5…”

Section: Ownership Concentrationmentioning

confidence: 99%

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Accounting for Investment Property: Determinants of Accounting Policy Choice by Portuguese Listed Firms

Alves¹

2019

IJAT

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This study examines the determinants of accounting choices for investment property by Portuguese listed firms within the framework of Positive Accounting Theory. The results support the debt hypothesis under the Positive Accounting Theory, where high leverage firms significantly increase the probability the firms to choose the fair value model. The outcome also suggests that size and information asymmetry significantly increase the probability the firms to choose the fair value model, whereas ownership concentration significantly increase the probability the firms to choose the cost model. Overall this study suggests that the decision to use the fair value method seems to be guided mainly by the need to signal the firm's financial health, especially its additional borrowing capacity, and to reduce information asymmetry between the company and outside investors. However, the equity/bonus plan and the number of non-executive directors on the board do not seem to matter.

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Section: Regression Resultsmentioning

confidence: 99%

Section: Ownership Concentrationmentioning

confidence: 99%

Section: Ownership Concentrationmentioning

confidence: 99%

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Accounting for Investment Property: Determinants of Accounting Policy Choice by Portuguese Listed Firms

Alves¹

2019

IJAT

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“…This study adds to a growing body of research on accounting quality and ownership structure (e.g. Ali, Chen, & Radhakrishnan, 2007;Hope, 2013;Mäki, Somoza-Lopez, & Sundgren, 2016;Wang, 2006;Weiss, 2014). In particular, I study the question of how ownership structure, specifically family ownership, impacts disclosure on corporate governance, strategic information and notes to the financial statements.…”

Section: Introductionmentioning

confidence: 97%

Disclosure Practices by Family Firms: Evidence from Swedish Publicly Listed Firms

Vural

2018

Accounting in Europe

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I investigate the effect of family ownership on firms' disclosure practices in their annual reports. In specific, I study Swedish publicly listed firms, which are typically characterized by controlling owners that have a strong influence in the corporate governance decisions of the firm, including corporate disclosures. To measure disclosure, I construct a comprehensive disclosure index covering information on (1) corporate governance, (2) strategic and financial targets and (3) notes to the financial statements. The results reveal that overall, family firms provide less disclosure in annual reports than non-family firms do. The finding is consistent with the premise that through their management positions, family owners can directly monitor managers and avoid costly public disclosures. Overall, the results suggest that ownership structure of firms is important to consider in understanding firms' disclosure incentives, particularly in settings where controlling owners play a significant role in the governance of the firm.

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“…When a company is attractive to investors, the managers respond to the needs of a broad range of interested investors (Daske et al, 2013). In contrast, when a company is closely held by a majority shareholder, the managers may focus on that key relationship rather than cater to the needs of minority shareholders (Mäki et al, 2016). Institutional investors can also exert pressure on the management (Kalay, 2015).…”

Section: Introductionmentioning

confidence: 99%

Management’s choice of tone in letters to shareholders: sincerity, bias and incentives

2021

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El objetivo de este artículo es identificar los factores que impulsan las decisiones de los directivos en materia de información en un entorno caracterizado por la concentración de la propiedad y la escasa aplicación de la ley. Investigaciones anteriores indican que el tono de la carta a los accionistas está correlacionado con los resultados. Sin embargo, el tono puede estar sesgado hacia lo positivo cuando una empresa es muy sensible a los incentivos del mercado de valores o está controlada por inversores mayoritarios. El sesgo puede reducirse gracias a las actividades de supervisión de los inversores institucionales en las empresas de capital cerrado. El estudio tiene dos implicaciones importantes. En primer lugar, cuando los directivos sesgan el texto, pierden la capacidad de comunicar noticias positivas sobre su empresa. En el marco de las expectativas racionales, los inversores pueden detectar el sesgo basándose en los incentivos situacionales conocidos y desestimar la información sesgada. En segundo lugar, los resultados sugieren que los directivos manipulan el tono estratégicamente, y no de forma inconsciente, para satisfacer las necesidades de los principales grupos de accionistas. This paper aims to identify the drivers of management reporting choices in a setting characterized by ownership concentration and weak enforcement. Previous research indicates, that tone of the letter to shareholders is correlated with performance. However, tone can be biased towards the positive when a company is highly responsive to stock market incentives or controlled by majority investors. Bias can be reduced by the monitoring activities of institutional investors in closely held companies. There are two major implications of the study. First, when managers bias the text, they lose the ability to communicate positive news about their company. Under rational expectations investors can detect bias based on known situational incentives and disregard the biased information. Second, the results suggest that managers manipulate tone strategically, rather than unconsciously, to satisfy the needs of key shareholder groups.

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Ownership Structure and Accounting Method Choice: A Study of European Real Estate Companies

Cited by 14 publications

References 40 publications

Accounting for Investment Property: Determinants of Accounting Policy Choice by Portuguese Listed Firms

Accounting for Investment Property: Determinants of Accounting Policy Choice by Portuguese Listed Firms

Disclosure Practices by Family Firms: Evidence from Swedish Publicly Listed Firms

Management’s choice of tone in letters to shareholders: sincerity, bias and incentives

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