The Effects of Accounting Standards on the Financial Reporting Properties of Private Firms – Evidence from the German Accounting Law Modernization Act

Business Research, Vol. 10, Issue 2, pp. 215-248, October 2017

Posted: 2 Nov 2014 Last revised: 2 Nov 2017

See all articles by Julia Zicke

Julia Zicke

Goethe University Frankfurt

Florian Kiy

Goethe University Frankfurt

Date Written: August 07, 2017

Abstract

This study investigates whether the 2009 German Accounting Law Modernization Act has affected the reporting and accounting practices of German private firms. In reforming German accounting standards, numerous accounting options were deleted, several accounting rules were transferred from IFRS to German GAAP with some modifications, and disclosure requirements were extended. In our analysis, we examine the changes in financial reporting and their effects on disclosures. We use four financial reporting property measures: discretionary accruals, the correlation between operating cash flow and accruals, the persistence of earnings, and the predictability of earnings. The results reveal no change across all financial reporting properties. Examining disclosure compliance for capitalized development costs and other provisions reveals substantial variation in compliance.

Keywords: German Accounting Law Modernization Act, German GAAP, Accounting standards, Financial reporting properties, Private firms

JEL Classification: M40, M41, M49

Suggested Citation

Zicke, Julia and Kiy, Florian, The Effects of Accounting Standards on the Financial Reporting Properties of Private Firms – Evidence from the German Accounting Law Modernization Act (August 07, 2017). Business Research, Vol. 10, Issue 2, pp. 215-248, October 2017. Available at SSRN: https://ssrn.com/abstract=2517376 or http://dx.doi.org/10.2139/ssrn.2517376

Julia Zicke (Contact Author)

Goethe University Frankfurt ( email )

Theodor-W.-Adorno-Platz 4
Frankfurt am Main, 60629
Germany

Florian Kiy

Goethe University Frankfurt

Theodor-W.Adorno-Platz 4
Frankfurt am Main, 60629
Germany

Register to save articles to
your library

Register

Paper statistics

Abstract Views
1,438
PlumX Metrics
!

Under construction: SSRN citations while be offline until July when we will launch a brand new and improved citations service, check here for more details.

For more information