Report on the 3rd Dutch Accounting Research Conference

One of the best protected secrets of the Dutch accounting community is that the Netherlands is among the best European countries when it comes to accounting research and that Dutch universities also perform excellent when making worldwide comparisons. The current situation is the result of the hard work of many people at the different Dutch universities during the last three decades. Despite the fact that accounting research flourishes in the Netherlands and despite the geographic concentration of the different universities, initiatives to bring accounting researchers together were lacking. The Dutch Accounting Research Conference (DARC) aims at filling this gap

Why do politicians intervene in accounting regulation? The role of ideology and special interests

Political economy explains the behavior of politicians by regulatory capture and by ideology. Politicians frequently intervene in the regulation of financial accounting. Prior evidence from the accounting literature shows that regulatory capture by special interests explains these interventions. Politicians tend to view accounting regulation as a technical issue where ideological views play a minor role. However, many accounting rules directly lead to economic or social consequences, such as income distribution or private-sector subsidies. The perception of these consequences varies with a politician’s ideology. Therefore, if accounting rules produce those consequences, ideology plausibly spills over and also explains a politician’s stance on the technical accounting issue, beyond special interest pressure. We use two prominent political debates about fair value accounting during the financial crisis and the expensing of employee stock options to disentangle the role of ideology from special interest pressure. In both debates, ideology explains politicians’ involvement at exactly those points when the debate focuses on the economic consequences of accounting regulation (i.e., bank bail-outs and top-management compensation). Once the debates focus on more technical issues, political connections to special interests remain the most dominant force

The environment of corporate financial reporting in capital markets : regulation, communication, and processing of accounting information

USA ; Fair-Value-Bewertung ; Bilanzrecht ; Regulierung ; Ökonomische Theorie der Politik ; Public-Choice-Theorie ; Börsenkrach ; Finanzkrise ; Investor Relations ; Insidergeschäft ; Anlageberatung ; Kommunikatio

Value and momentum from investors' perspective: Evidence from professionals' risk-ratings

We conduct a controlled experiment with financial professionals to examine more directly whether value and momentum reflect risk factors or mispricing. By eliciting their risk perceptions and return expectations for company stocks, we identify what constitutes a risky investment from the point of investors. Contrary to the risk factor hypothesis, value and momentum stocks are regarded as less risky. However, other factors, such as size and beta, fall in line with their traditional interpretation as risk factors. Consistent with empirical findings, we observe higher return expectations for momentum stocks, raising questions on analysts believing in a risk-return trade-off

Report on the 3rd Dutch Accounting Research Conference

One of the best protected secrets of the Dutch accounting community is that the Netherlands is among the best European countries when it comes to accounting research and that Dutch universities also perform excellent when making worldwide comparisons. The current situation is the result of the hard work of many people at the different Dutch universities during the last three decades. Despite the fact that accounting research flourishes in the Netherlands and despite the geographic concentration of the different universities, initiatives to bring accounting researchers together were lacking. The Dutch Accounting Research Conference (DARC) aims at filling this gap

Speaking with One Voice? Individual Preferences and Managers’ Personal Communication Style

We examine whether and to what extent personal communication of corporate information by individual managers is affected by personal preferences for impression management. Using earnings conference calls as a setting to observe individual managers’ personal communication and controlling for firm-specific and manager-specific factors, we document that the communication style of managers selling corporate stock shortly after the call is significantly more optimistic than the communication of non-selling managers participating in the same call. The effect is more pronounced in the less scripted and more flexible question and answer section. Taken together, our findings suggest that differences in individuals’ personal communication style are not only caused by individual managers’ personality or career backgrounds, but may also emerge from managers’ conscious or unconscious preferences for impression management