Reporting Quality and Organisational Form Choice: Evidence From Open-end and Closed-end Firms
1 Jul 2024
11:00 -12:15
Times are shown in local time.
Open to: All
Castle Teaching Room (Cambridge Judge Business School)
Trumpington St
Cambridge
CB2 1AG
United Kingdom
Join our Accounting seminar
Speaker: Professor Igor Goncharov, Lancaster University Management School
About the seminar topic
Investors buy and sell shares of closed-end firms at prices determined in secondary markets, but they transact directly with open-end firms at prices determined by these firms using their accounting records. While Fama and Jensen (1983) predict that firms with hard-to-value assets must choose a closed-end organisational form to overcome the valuation problem by using secondary market prices, we observe the emergence of open-end firms with hard-to-value assets (for example real estate). We predict and find that investors of such open-end firms face higher demand for their accounting information and report higher quality financial statements than comparable closed-end firms.
We also show that the emergence of open-end firms with hard-to-value assets coincides with the introduction and improvements of fair value reporting. These findings extend prior theory by suggesting that high financial reporting quality broadens the spectrum of feasible organisational forms for firms with hard-to-value assets.
Speaker bio
Igor Goncharov holds a position of Professor of Accounting at Lancaster University Management School. After obtaining his PhD from the University of Bremen, he worked as an Assistant Professor of Accounting at the University of Amsterdam in the Netherlands and as a Professor of Financial Accounting at the WHU – Otto Beisheim School of Management in Germany. Igor Goncharov’s research focuses on the economic consequences of financial reporting and fair value accounting in different settings including firms, investment companies, and central banks.
Igor Goncharov’s work has been published in various international journals, including Journal of Accounting Research, The Accounting Review, Review of Accounting Studies, and The Journal of Finance. He is the Associate Editor of Accounting and Business Research, and has received numerous awards for excellence in research and teaching.
Register
No registration required. If you have any questions about this seminar, please email Eleanor Stefiuk.