Size management by European private firms to minimize proprietary costs of disclosure

• 成果类型: Article
• 署名作者: Bernard, Darren; Burgstahler, David; Kaya, Devrimi
• 署名单位: University of London; London Business School; University of Washington; University of Washington Seattle; Ruhr University Bochum
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2018.03.001
• 发表日期: 2018
• 关键词: product market predation; earnings management; Audit quality; Trade credit; determinants; INFORMATION; environment; motives; RISK; LAW

摘要

We examine size management by European private firms for which disclosure requirements increase at size thresholds. Our estimates suggest at least 8% of firms near thresholds that impose income statement disclosure manage size downward, and the average firm that manages size sacrifices more than 6% of its assets. We find that multiple determinants of proprietary costs predict this behavior, and that size management to avoid mandatory audits, which are similarly imposed at size thresholds, is of comparable magnitude. Our results triangulate the economic significance of proprietary costs in a setting largely without confounding capital market, agency, or compliance costs.