Supply and demand for European accounting research. Evidence from EAA congresses

We study the supply and demand for European accounting research, referring to author nationality and the country origin of the data to define research as ‘European’. We study both the supply (conference proceedings) and the demand (published papers) for European research. To assess the supply side, we study all papers presented at the 1998, 2000, 2002 and 2005 EAA congresses. Out of the total 1622 papers, 257 (16%) are European, with an increase after 2000. We find that European papers are more often co-authored than local papers. 50% of the European papers are in Financial Accounting (vs. 35% for local papers, 57% for other papers); 46% use the empirical archival methodology (vs. 33% for local papers and 48% for other papers). Out of the 158 European papers presented at the 1998, 2000 and 2002 EAA congresses, 55 (34%) have been published by 2006. As expected, the EAR is the major outlet for European papers, closely followed by British and US journals. The number of co-authors and their nationality are the only significant variables associated with the likelihood of publication. This study furthers understanding of the ongoing construction of the European accounting research community, by studying not only published papers, but also conference proceedings.Accounting research; Co-authorship; Bibliometry; European Research; EAA; Publication

Value Relevance of R&D Reporting : A Signaling Interpretation

Accounting for research and development (R&D) costs is an open issue. SFAS N°2 mandates that all R&D costs are immediately expensed. International standards prescribe a capitalization of R&D costs if they meet certain criteria (IAS 38). Recent research papers (Healy et al., 2002; Lev and Sougiannis, 1996, 1999; Aboody and Lev, 1998, Zhao, 2002) show that capitalization of R&D costs and software development costs is value relevant. However critics can be leveled at previous research because prior empirical tests are based on simulated or partial data. Our purpose is to test empically R&D accounting issues on a sample of 95 French firms on a three years period (1998-2000). French context provides an experimental field for studying the value relevance of R&D capitalization, because both accounting treatments of R&D costs (expensing and capitalization) are allowed. We find that capitalized R&D is positively associated with stock returns and stock prices, whereas expensed R&D is negatively related to stock prices and stock returns. R&D accounting reduces the information asymmetry on the successfulness of R&D projects: it acts as a signal to investors. This paper extends previous literature by using real data on capitalized R&D, instead of estimated data. Moreover, we show not only that capitalized R&D is value relevant but also that expensing of R&D projects conveys a negative signal.Value relevance; R&D; France; Financial reporting; Capital markets; Accounting choice

Levels of voluntary disclosure in IPO prospectuses : an empirical analysis

This paper focuses on how forecasts information is disclosed in IPO prospectuses. In France, managers report either detailed forecasts or only a brief summary. We investigate the determinants and consequences of the varying levels of detail provided in these forecasts. Based on a sample of 82 IPOs on the Euronext Paris market (2000-2002), we show that only two variables are associated with highly detailed forecast disclosures: forecast horizon and firm age. We also find that the forecast error decreases as the level of detail in the forecast disclosures increases. This finding is robust to our reverse causality test (Heckman two-stage self-selection procedure) and suggests that the level of detail in forecast disclosures enhances the reliability of earnings forecasts.IPO; forecast disclosure; forecast error

Existe-t-il une recherche comptable globale en Europe ? Une étude des communications présentées à l'EAA

Au milieu des années 1990, de nombreux articles ont montré que la recherche comptable était très locale (Lukka and Kasanen, 1996; Panozzo, 1997; Carmona et al. 1999). Ce constat contraste avec l'internationalisation croissante de la profession comptable (normes IFRS, convergence US GAAP /IFRS,...). Dans cet article, nous réexaminons la nature locale de la recherche comptable à l'heure de la mise en place des normes comptables internationales (IFRS) à partir de l'analyse des communications aux congrès de l'EAA. L'étude de communications (plutôt que des articles publiés) est intéressante dans la mesure où elle permet de donner une image fidèle de l'activité des chercheurs. En effet, de nombreux auteurs ont montré que les revues académiques sont largement dominées par les auteurs nord-Américains (Lukka et Kasanen, 1996 ; Raffournier et Schatt, 2006). Par ailleurs, de nombreux chercheurs de pays européens et non européens participent aux congrès de l'EAA qui nous semble dès lors être un forum ‘global' de la recherche comptable. A partir des congrès de 2000 et de 2005, nos résultats montrent qu'une part croissante des communications peut être qualifiée de globale. Deux facteurs semblent expliquer la globalisation de la recherche comptable. Tout d'abord, elle dépend du thème de recherche : la recherche en comptabilité financière est deux fois plus globale que la recherche en contrôle de gestion. Ensuite, la stratégie de collaboration de recherche (coauteurs) compte : les papiers qualifiés de globaux ont plus de coauteurs que les papiers locaux. Cette étude enrichit la compréhension de la dynamique de la recherche comptable et illustre la relation complexe qui existe entre la globalisation de la pratique comptable et celle de la communauté de recherche comptable.Recherche comptable; Association européenne de comptabilité

Why do firms opt for Alternative-Format Financial Statements ? Some Evidence from France

Historically, the format of financial statements has varied from one country to another. Recently, due to the attractiveness of their capital markets, the strength of their accounting professions and the influence of their institutional investors, Anglo-American countries have seen the impact of their accounting practices on other nations increase steadily, even influencing the actual format of financial statements. Given that French accounting regulations allow a certain degree of choice in consolidated balance sheet format (‘by nature’ or ‘by term’) and income statement format (‘by nature’ or ‘by function’), this study examines a sample of 199 large French listed firms in an attempt to understand why some of these firms do not use the traditional French formats (‘by nature’ for the balance sheet and ‘by nature” for the income statement), instead preferring Anglo-American practices (‘by term’ format for the balance sheet and ‘by function’ format for the income statement). We first analyze the balance sheet and income statement formats separately using a logit model, then combine the two and enrich the research design with a generalized ordered logit model and a multinomial logit regression. Our results confirm that the major driving factor behind the adoption of one or two alternative formats is the firm’s degree of internationalization, not only financial (auditor type, foreign listing and the decision to apply alternative accounting standards) but also commercial (company size and the internationalization of sales).Disclosure; Determinants; Financial Statements; Alternative format; France; Logit; Generalized ordered logit; Multinomial logit

Really “Lost in translation”? The economic consequences of issuing an annual report in English

In this paper, we investigate the economic consequences of using English as an external reporting language for firms from non- English speaking countries. We use a difference-indifferences technique to estimate the effect of language. We use a sample of 166 firms that start publishing an annual report in English in addition to an annual report in their local language. We benchmark these firms to a sample of control firms defined via a propensity score matching procedure to control for endogeneity in the choice of the reporting language. We show that information asymmetry (measured as the bid-ask spread) is reduced, analyst following is enlarged and a greater investor base (measured as a higher number of foreign investors) is attracted. Our findings suggest that language per se may contribute to an increase in market efficiency by providing information accessible to more market participants.rapport annuel, conséquences économiques, traduction, anglais, fourchette de prix, suivi des analystes, actionnariat étranger, différences dans les différences, score de propension.

Why do you speak English (in your annual report)?

In this study the authors analyze the factors associated with the publication of an English-language annual report in non-English-speaking countries. Using a sample of 3,994 firms from 27 countries in 2003, they find that about 50% of the sample firms issue annual reports in English. Our findings suggest that the decision to publish an English annual report is related to the internationalization process (via foreign sales), language barriers (via language distance and language importance), governance (via ownership structure) and financial concerns (via the need for external financing, capital market size and cross-listing).International financial reporting; annual report; language; cost-benefit analysis; logistic regression

GESTION DU RESULTAT : MESURE ET DEMESURE

Cet article est consacré aux difficultés conceptuelles, méthodologiques et empiriques des modèles d'accruals discrétionnaires. Les principaux modèles utilisés par la littérature sont présentés et discutés. Les problèmes de cohérence de ces modèles entre eux et par rapport au modèle comptable sont aussi approfondis.gestion du résultat; accruals discrétionnaires

CONTRIBUTION A L'ANALYSE DE LA GESTION DU RESULTAT DES SOCIETES COTEES

Cette communication étudie la gestion du résultat de sociétés cotées au premier marché. Le cadre théorique repose sur la théorie positive et le désir d'atteindre des seuils. La dimension temporelle des politiques comptables, la nature de l'auditeur et de la firme, la présence d'administrateurs indépendants sont intégrés à l'analyse.gestion du résultat ; incitations ; contraintes

An Experiment in the Economic Consequences of Additional Disclosure: The Case of the Fair Value of Unlisted Equity Investments

We investigate the economic consequences of additional disclosure about assets with no active market in terms of liquidity, perception of information reliability and relevance. We use an experimental design: 181 MBA students are asked to value 24 investments. We manipulate the level of disclosure on the fair value of assets (Limited versus Full), the perception of expected profit (Gain versus Loss) and the firm's business risk (Low versus High). In the case of Limited (resp. Full) disclosure, participants are given a point estimate for the fair value of the investment (resp. plus a range of possible fair values). We find that in the Full disclosure situation, participants tend to make an offer more frequently, to bid prices lower than the fair value and to earn a lower return on their investments compared to the Limited disclosure case. These consequences vary with the environment (expected profit and risk).fair value; fair value measurement; disclosure; relevance; reliability; risk; SFAS 157; IFRS 7