The Impact of Managerial Ownership, Monitoring and Accounting Standard Choice on Accrual Mispricing

CEFS Working Paper No. 2009-02

36 Pages Posted: 30 Jan 2009 Last revised: 19 May 2009

See all articles by Bernhard Gegenfurtner

Bernhard Gegenfurtner

Technische Universität München (TUM)

Markus Ampenberger

Technische Universität München - Center for Entrepreneurial and Financial Studies

Christoph Kaserer

Technische Universität München (TUM)

Date Written: January 30, 2009

Abstract

We analyse to what extent the accrual anomaly is related to the choice of the accounting system as well as firm-level heterogeneity in corporate governance mechanisms. Using a unique dataset of listed German firms over the period 1995 to 2005 we first corroborate former results indicating that the accrual anomaly is also present in Germany. However, this anomaly seems to be driven mainly by firms with managerial ownership. In a second step, we test how different corporate governance mechanisms affect the anomaly. For the German experiment on voluntary adoption of IFRS our results confirm previous findings that the anomaly is less likely to be present under a conservative accounting system. While creditor monitoring is able to reduce the accrual anomaly, shareholder monitoring is not. Apart from offering evidence related to the cross-sectional difference in the degree of accrual mispricing, our results give also some insights related to the cross-country variation of this phenomenon.

Keywords: Accrual Anomaly, Earnings Quality, Corporate Governance, Managerial Ownership, Capital Market Efficiency, Accounting Standard, Shareholder Monitoring, Creditor Monitoring

JEL Classification: G32, G34, M4, M41

Suggested Citation

Gegenfurtner, Bernhard and Ampenberger, Markus and Kaserer, Christoph, The Impact of Managerial Ownership, Monitoring and Accounting Standard Choice on Accrual Mispricing (January 30, 2009). CEFS Working Paper No. 2009-02, Available at SSRN: https://ssrn.com/abstract=1335288 or http://dx.doi.org/10.2139/ssrn.1335288

Bernhard Gegenfurtner (Contact Author)

Technische Universität München (TUM) ( email )

Arcisstrasse 21
Munich, DE 80333
Germany
++49 89 289 25478 (Phone)
++49 89 289 25488 (Fax)

HOME PAGE: http://www.cefs.de

Markus Ampenberger

Technische Universität München - Center for Entrepreneurial and Financial Studies ( email )

Arcisstraße 21
München, 80333
Germany
++49 89 289 25483 (Phone)
++49 89 289 25488 (Fax)

HOME PAGE: http://www.cefs.de

Christoph Kaserer

Technische Universität München (TUM) ( email )

Arcisstr. 21
Munich, D-80290
Germany
+49 89 289 25489 (Phone)
+49 89 289 25488 (Fax)

HOME PAGE: http://www.cefs.de

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
348
Abstract Views
1,566
rank
93,367
PlumX Metrics