Goodwill Impairment Test Disclosures Under IAS 36: Disclosure Quality and its Determinants in Europe

Gros, Marius; Koch, Sebastian

doi:10.2139/ssrn.2636792

Cited by 1 publication

(1 citation statement)

References 71 publications

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“…When the enforcement system is stronger, also financial analysts' estimates are more accurate (Byard et al, 2011;Demmer et al 2015;Preiato et al, 2015), the institutional investors' ownership increase (Florou & Pope, 2012), and earnings management behaviours decrease (Cai et al, 2008;Houqe et al 2012). Finally, in countries with a stronger enforcement, financial disclosure improves as well (Glaum et al, 2013;Gros & Koch, 2015). From all those studies, the importance of the enforcement system clearly emerges.…”

Section: Literature Reviewmentioning

confidence: 98%

Measuring the Effectiveness of National Enforcers in the IFRS Context: A Proactive Approach

Quagli¹,

Avallone²,

Ramassa³

et al. 2018

IBR

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It is widely acknowledged that an effective enforcement system represents a crucial element to achieve significant improvements in financial reporting through the adoption of high-quality accounting standards. Indeed, the quality of financial reporting is considerably influenced not only by the standards to be adopted but also by their actual implementation, and consequently by enforcement mechanisms.The topic has generated considerable interest among scholars, who devoted their attention to developing different measures of the quality of the enforcement system. Building upon this literature, this paper aims at exploring the accounting enforcement system and focuses on controls over financial reporting considering two levels, namely the auditing activity and the controls performed by national enforcers.This paper extends the prior literature by proposing a dynamic measure of the accounting enforcement system capturing controls at those two levels. More specifically, the index here proposed focuses on the quality of the accounting enforcement operated by national enforcers in terms of proactivity, intended as the national enforcers’ capability to detect problems not highlighted in the auditors’ opinions, thus shifting the focus from an input to an output perspective. Indeed, the activities of auditors and national enforcers are strictly connected, given that the auditors’ opinion is the first public output of accounting controls and that is normally one of the bases for further investigation by national enforcers. An illustrative empirical analysis is carried out on the German and the Italian contexts to show the potential of the index for enforcement studies.

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