Derya Vural’s research while affiliated with Stockholm School of Economics and other places

För cirka 10 år sedan antog Bokföringsnämnden (BFN) det allmänna rådet BFNAR 2012:1 Årsredovisning och koncernredovisning (K3) med tillhörande vägledning. Det var första gången Sverige fick ett heltäckande regelverk för koncernredovisning i icke-noterade företag. I denna artikel redovisas resultaten av en studie av olika effekter av införandet av K3 i koncernredovisningen. https://backend.tidningenbalans.se/app/uploads/2023/03/Inforandet-av-K3-i-koncernredovisningen-vilka-blev-effekterna.pdf

In 2014, all larger Swedish private firms were required, at short notice, to adopt a new reporting standard (K3) based on IFRS for SMEs (2009 version). Using this shock to the reporting environment, we study the effects of the new reporting standard on groups’ financial reporting properties and cost of debt financing. We find that, following the introduction of K3, private groups exhibit reporting changes consistent with improved accounting quality; their financial statement comparability increases; and their cost of debt declines. Our results suggest that the cost-of-debt decline is related to changes in accounting numbers that are imputed to lending models. Our findings add to the literature on factors shaping private firms’ financial reporting and inform the ongoing discussion on accounting regulation for private firms.

We study how executive compensation disclosure (ECD) is affected by the economic incentives of owners and managers in a Swedish setting where agency conflicts are not so much between managers and owners, but between controlling and non-controlling owners. In our sample, control is often enhanced through mechanisms such as dual share classes. The analysis relies on detailed hand-collected ECD data from 2,837 annual reports. As expected, disclosure decreases with ownership concentration and the owner’s excess voting rights. In Sweden, overpaid Chief Executive Offices (CEOs) improve ECD quality, but this is not the case when the controlling owner has excess control rights. This suggests that when managers have a bond with controlling owners, ECD is part of the agency problem between controlling and non-controlling owners, and executive compensation plays a different role than in previously studied Anglo-Saxon settings.

I investigate the effect of family ownership on firms’ disclosure practices in their annual reports. In specific, I study Swedish publicly listed firms, which are typically characterized by controlling owners that have a strong influence in the corporate governance decisions of the firm, including corporate disclosures. To measure disclosure, I construct a comprehensive disclosure index covering information on (1) corporate governance, (2) strategic and financial targets and (3) notes to the financial statements. The results reveal that overall, family firms provide less disclosure in annual reports than non-family firms do. The finding is consistent with the premise that through their management positions, family owners can directly monitor managers and avoid costly public disclosures. Overall, the results suggest that ownership structure of firms is important to consider in understanding firms’ disclosure incentives, particularly in settings where controlling owners play a significant role in the governance of the firm.