Prof. Dr. Thorsten Sellhorn Institut für Rechnungswesen ... · Modul “Markt- und finanzorientierte ... • Implement this design by sampling and gathering data ... affects variable

Prof. Dr. Thorsten Sellhorn Institut für Rechnungswesen und Wirtschaftsprüfung

Hauptseminar zur Rechnungslegung (B.Sc.)

Seminar in Financial Accounting

Modul “Markt- und finanzorientierte Betriebswirtschaftslehre”

SS 2014

Prof. Dr. Thorsten Sellhorn (instructor) Ludwigstr. 28 HG, Zi. 418 Email: [email protected] Tel.: +49 261 6509 230

Xiaomin Lin, M.Sc. (teaching assistant) Ludwigstr. 28 VG, Zi. 211a (tentative) Email: [email protected] Tel.: +49 89 2180 3769

Katharina Hombach, M.Sc. (teaching assistant) Office tba. Email: [email protected] Tel.: +49 261 6509 237

Dipl.-WiWi. Christian Stier (teaching assistant) Ludwigstr. 28 VG, Zi. 211a (tentative) Email: [email protected] Tel.: +49 89 2180 3363

Yvonne Hildesheim (administrative assistant) Office tba. Email: [email protected] Tel.: +49 89 2180 6323

Sandra Bauer (assistant of the institute) Office tba. Email: [email protected] Tel.: +49 89 2180 6308

Please do not hesitate to get in touch!

Team

# 2 SS 2014 Hauptseminar zur Rechnungslegung

• Online

http://www.rwp.bwl.uni-muenchen.de

• On campus

Institut für Rechnungswesen und Wirtschaftsprüfung Department für Betriebswirtschaft Ludwig-Maximilians-Universität München Ludwigstr. 28 Rückgebäude (RG) – 4. Etage 80539 München Germany


How to find us?

http://www.rwp.bwl.uni-muenchen.de/

1. Introduction

2. Research in Accounting

3. Topics, Literature and Supervisors

4. Evaluation Criteria

5. Concluding Remarks


Agenda

• To practice research work and scientific writing in a field that interests you, thus preparing you for your Bachelor thesis

• „§ 14 Bachelorarbeit

– (…) (2) Die Bachelorarbeit soll zeigen, dass die oder der Studierende in der Lage ist, innerhalb einer vorgegebenen Frist (Abs. 7) ein Problem aus ihrem oder seinem Fach selbständig nach wissenschaftlichen Methoden zu bearbeiten.“

• Dealing with time and space restrictions / project management

• Presenting and discussing in front of an audience


Learning objectives


Learning objectives

• Project requirements • Project proposal / sketch after about 1 week

• Thesis

• Presentation

• Secondary presentation (Korreferat)

• Aktive Mitarbeit bei allen Präsentationen des Seminars

• Format requirements • See the document „Formererfordernisse“ (http://www.rwp.bwl.uni-

muenchen.de/aktuelles/ausblick_ss14/seminar_ss14/formerfordernisse.pdf)

• Information on module • 6 ECTS for the module „Markt- und finanzorientierte

Betriebswirtschaftslehre“ (PO Bachelor 2008)


Requirements

http://www.rwp.bwl.uni-muenchen.de/aktuelles/ausblick_ss14/seminar_ss14/formerfordernisse.pdf





• Recommended textbook Theisen, M. R.: Wissenschaftliches Arbeiten: Erfolgreich bei Bachelor- und Masterarbeit, 16. Aufl., München 2013.


Course materials

Datum/Zeit Raum Veranstaltung/Tätigkeit

Mi., 26.02.2014, 16.00 Uhr Ende der Frist zur Anmeldung am Seminar

Sa., 01.03.2014 Zu- bzw. Absage zur Aufnahme zum Seminar durch den Lehrstuhl

Mi., 05.03.2014 Verbindlich Zu- bzw. Absagen zum Seminar durch die Studierenden

Mo., 14.04.2014, 18.00 Uhr Leopoldstraße 13, Haus 1 - 1212

Themenvergabe und verbindliche Vorbesprechung zur Hausarbeit

Di., 13.05.2014, 12.00 Uhr Abgabe der Arbeit

Mi.,14.05.2014, 18.00 Uhr Leopoldstraße 13, Haus 1 - 1212

Verbindliche Vorbesprechung zur Präsentation

Do./Fr., 05/06.06.2014, 08.00 - 18.00 Uhr

Edmund-Rumpler- Straße 9 - A 081

Präsentationen


Course structure

1. Introduction






Agenda

„A number of authors describe accounting researchers as ‚parasites‘ who prey on the work of others to generate their findings. …

accounting researchers have little theory of their own (they rely on economics, finance, psychology, sociology and organizational behaviour as their major sources);

they have no methods of their own (they are all adapted from the natural and social sciences) …“

(Malcolm Smith, Research methods in accounting, 2003, S. 1)


Characterizing accounting research

• Categories used by the European Accounting Association:

empirical theoretical Other empirical archival

(database) non-empirical –

analytical other

empirical archival (archive) non-empirical – theory

empirical experiment empirical field study/

case study empirical survey


Research methods in accounting

• Categories used by the European Accounting Association (adapted):


Research topics in accounting

Normative

• Statements containing ‚should‘, ‚ought to‘

• ‚A priori‘ theorization

• Value judgments based on predefined criteria

• Examples

• How should profit be measured?

• Should goodwill be amortized?

• Should firms reward managers based on

shareholder value?

• Should their be explicit accounting choices?

• Is the new IFRS X a good standard?

Positive

• Try to understand what ‚is‘, and ‚why‘ it is so

• Empirical observation and statistical testing

• Hesitant to make value judgments

• Examples

• Do earnings announcements affect stock

prices?

• Which firm record impairments of goodwill?

• What explains managers‘ accounting choices?

• Why do firms publish integrated reports?

• How did the new IFRS X affect Y?

Ball and Brown (2014: FN 15 p. 16): "An analogy that might help explain the relation between the two propositions is given by motor industry R&D. It was as if academics were saying ‚we have not collected data on whether or how consumers use cars as they currently are designed, but we know a priori that these cars are useless and all cars henceforth should be redesigned as sixteen wheel trucks.‘ Suppose the data reveal consumers actually find cars to be useful, as in fact they are. That result does not necessarily imply social welfare would not be improved if cars were radically redesigned as sixteen wheelers, but it does cast some doubt on the reasoning behind the conclusion that welfare would be improved."


Basic research questions

Accounting Phenomenon

Determinants Consequences

Empirical tests of theories about factors assumed to influence the phenomenon • IF questions • WHY questions

Description of an accounting phenomenon and any relevant legal requirements

Empirical tests of theories about the influence of the phenomenon on other phenomena • IF questions • WHY questions


Empirical accounting research: A closer look

Auditor Gender Determinants Audit Quality

IFRS Adoption Determinants Cost of Capital

R&D Capitalization Earnings Management Incentives

Predictive ability of earnings

Accounting-based bonus plans

Determinants Earnings Management


Empirical accounting research: Examples

1. Identifying a problem, a research question Example: BilMoG created a firm-level choice to capitalize certain development expenditures → How did firms implement it?

2. Derive testable hypotheses from theory Example: Positive accounting suggests that firms manage their earnings to avoid the costs associated with violating debt covenants. Therefore, we expect that leverage is positively associated with the decision to capitalize, and with the amount capitalized.

3. Empirical hypothesis tests Example: (1) Collect leverage ratios and amounts capitalized (2) Estimate a regression equation explaining the amount capitalized by leverage (and any control variables) → Significant association found: Hypothesis cannot be rejected!


Generating new knowledge

• Identify and define the research problem

• Motivate why it is interesting and important

• Develop the conceptual and theoretical structure, including causal links and chains

• State the specific hypotheses to be tested

• Operationalize the theoretical constructs/variables and the relationships among them

• Construct the research design

• Implement this design by sampling and gathering data

• Analyze observations in order to test hypotheses

• Evaluate the results by applying the qualitative criteria, primarily internal and external validity

• Highlight the contribution made

• Consider and specify limitations and constraints

• Suggest areas for future research


„Scientific Method“ according to Abdel-Khalik/Ajinkya (1979)

Contribution

• Lack of sufficient incremental contribution to the accounting literature

• „What the paper shows is not interesting, innovative; has been shown before …“

• Imperative: Show something interesting!

Validity threat

• Concerns with the validity of the findings and resulting conclusions

• „The paper addresses a potentially important question, but I am not convinced that its conclusions are supported by the empirical results.“

• Imperative: Whatever you show, show it convincingly!

Trade-off: Sweeping, “interesting” conclusions using strong assumptions, OR “convincing” inferences under restrictive limitations.


Reasons for rejection of an (empirical) paper

Construct validity Construct

validity

Statistical conclusion

validity

Internal validity

External validity refers to the overall correspondence between the conceptual and operational levels, i.e. generalizability.

Source: Libby (1976)


A helpful framework

„Verificationist“ approach

• Centers on „preferred“ causal explanation

• „Parental affection“ (Chamberlin 1890)

• “Incredible certitude” (Manski 2013)

• “Warfare” and “construction” analogies

• “Confirmation bias” (Wason 1960)

• Occupied with „selling“ a desired result (significant coefficient): „Astronomy“

• Uncertainty something to be avoided

• Examples

• IFRS adoption research: „IFRS adoption

affects variable Y“ („IFRS matters“)

• Müller et al. (2013): „Pricing discount on

disclosed FVs due to lower reliability“

• Consistent with Null hypothesis testing (significance testing)

• Requires strong assumptions

„Falsificationist“ approach

• Considers range of plausible explanations

• Applies exclusion strategies (Wason 1960), e.g., „logical trees“ (Platt 1964)

• Occupied with understanding the phenomenon of interest, its determinants and consequences; scientific curiosity

• Uncertainty natural; to be openly reported

• Examples

• IFRS adoption research: „Variable Y

driven by a number of factors including

IFRS adoption“

• Müller et al. (2013): „Pricing discount on

disclosed FVs driven by a number of

factors including FV reliability“

• Consistent with reporting ranges of (bounds on) coefficients

• OK with weaker assumptions


The bigger picture: "Mindsets" in research

1. Introduction






Agenda

Zur empirischen Messung des Konzepts "Prüfungsqualität" - ein Literaturüberblick [Measuring audit quality for empirical analysis - a literature review]

• Review of various measurement approaches of audit quality for

empirical analysis in the prior studies

• Systematic summary of relationship between audit quality and relevant phenomenon (e.g., audit failure, audit fees, litigation risk)

• Critical discussion of audit qulity measurement in different research questions and settings


Supervisor: Xiaomin Lin

Topic 1

Rechnungslegung von Kirchen [Financial reporting by the Church]

• Discussion of the objective of financial reporting by the Church (i.e., to whom shall information be disseminated and why?)

• Analysis of the legal framework for financial reporting by the Church

• Crictical evaluation of the existing framework: Does it meet its objective(s)?


Supervisor: Katharina Hombach

Topic 2

Bilanzierung von Forschungs- und Entwicklungsausgaben nach IFRS - ein Branchenver-gleich [Accounting for research and development expenditures under IFRS - an industry comparison]

• Explanation of accounting treatments of R&D costs under IAS 38

• Data collection and descriptive analysis of R&D capitalization ratios of a sample of German firms across certain industries (horizontally) and time period (vertically)

• Analysis of determinants: Why does the R&D capitalization ratio vary across industries?



Topic 3

Alternative Ansätze zur Folgebewertung des derivativen Goodwills [Approaches to subsequent measurement of acquired goodwill]

• Analysis of the impairment-only approach as it is currently in place

• Analysis and critical evaluation of different approaches to subsequent measurement of acquired goodwill



Topic 4

Außerplanmäßige Goodwillabschreibungen im IFRS-Abschluss [Goodwill impairment charges - presentation and disclosure under IFRS]

• Presentation of the legal background (accounting for goodwill impairment charges under IFRS)

• Own empirical analysis of goodwill impairment charges in the annual reports of German companies

• Crictical evaluation of how the rules of goodwill impairment accounting are reflected in real-world financial statements



Topic 5

Aufbau der Kapitalflussrechnung nach IFRS [The structure of cash flow statements under IFRS]

• Descriptive analysis of the accounting choices made within the cash flow statement

• Analysis and/or discussion of the drivers of the accounting choices


Supervisor: Christian Stier

Topic 6

Gliederungstiefe von IFRS-Abschlüssen - eine deskriptive Untersuchung [The structure of IFRS financial statements – a descriptive analysis]

• Development of a measure for the structure/complexity of financial statements

• Analysis and/or discussion of the drivers of the structure/complexity of financial statements

• Comparison of selected industry peers



Topic 7

Globale Verbreitung der IFRS - eine Auswertung der jurisdiction profiles des IASB [Global proliferation of IFRS – an analysis of the IASB's jurisdiction profiles]

• Demonstrate the mechanism to assess the commitment to the IFRS

• Descriptive summary of the existing jurisdiction profiles

• Systematic evaluation of the worldwide progress towards IFRS harmonization based on the summary



Topic 8

Das De- und Downlisting deutscher Aktiengesellschaften – eine Analyse jüngerer BGH-Rechtsprechung ['Going dark' in Germany – an analysis of recent decision making by the Federal Court of Justice]

• Description of the „Frosta ruling“ (Frosta-Entscheidung) by the German Federal Court of Justice

• Analysis of the implications of this ruling for the (future) costs and benefits of delisting/downlisting of German firms, including but not limited to their incentives to avoid IFRS adoption



Topic 9

De facto-Branchenstandards in der Rechnungslegung – das Bewertungswahlrecht für Renditeimmobilien nach IAS 40 [Industry best practice in financial reporting – Accounting choice for investment properties under IAS 40]

• Comparison of firms that adopt the fair value model and firms that stay with the cost model

• Analysis of annual reports regarding reasons for the model choice

• Interviews with the investor relations departments of the firms



Topic 10

Abweichende Ansichten im Standardsetting-Prozess des IASB [Dissenting opinions in the IASB's standard-setting]

• Examination and classification of the arguments in the dissenting opinions

• Descriptive analysis of the relation between the types of arguments and the personal characteristics of the IASB members



Topic 11

Verwendung und Definition gängiger Performancemaße in deutschen Unternehmen [Com-mon key performance indicators used by German firms]

• Compare the definitions, concepts and objectives of various performance indicators and explain the role they play in value-based management

• Data collection and descriptive analysis of the various performance indicators applied by the German firms



Topic 12

1. Introduction






Agenda

• We are looking for evidence of independent scientific work and ‘spirit of research’

• Qualitative criteria • Diligence and effort

• Clarity and focus

• Reasoning

• Intellectual honesty and open-mindedness

• Creativity, curiosity and ‚drive‘

• Form is a symptom of content


Being successful in this seminar

1. Introduction






Agenda

• Start early

• Allow yourself to get excited • Do not merely work on „a topic“ (maybe only because it was assigned)

– „I work on the topic ‚audit quality‘“

• Find your own question within the topic – this will set you apart

– „Because I want to find out how researchers measure audit quality, and whether those measures are consistent with how practitioners think about audit quality

• Show why question is important/interesting (also to others); address „so what“ question

– „So that I can help improve our understanding of audit quality and its determinants and effects“

• Follow a plan

• Take pride (it is OK to be perfectionist, just this once)

• Support your claims

• Your supervisors are veterans in scientific work – ask them!


Speaking from experience …

Abdel-Rhalik, A. and Ajinkya, B. (1979) Empirical research in accounting: A methodological viewpoint, American Accounting Association.

Ball, R. and Brown, P. R. (2014) Ball and Brown (1968): A Retrospective, The Accounting Review, 89(1), pp. 1-26.

Chamberlin, T. C. (1890) The method of multiple working hypotheses, Science, 15, pp. 92-96.

Libby, R. (1976) Discussion of cognitive changes induced by accounting changes: Experimental evidence on the functional fixation hypothesis, Journal of Accounting Research Supplement, 14, pp. 18-24.

Manski, C. F. (2013) Identification of treatment response with social interactions, The Econometrics Journal, 16(1), pp. 1-23.

Müller, M. A., Riedl, E. J. and Sellhorn, T. (2013) Recognition versus Disclosure of Fair Values, Working Paper.

Platt, J. R. (1964) Strong Inference, Science, 146(3624), pp. 347-354.

Smith, M. (2003) Research methods in accounting, Sage Publications.

Wason, P. C. (1960) On the failure to eliminate hypotheses in a conceptual task, Quarterly Journal of Experimental Psychology, 12(3), pp. 129-140.


References

Documents

Prof. Dr. Thorsten Sellhorn Institut für Rechnungswesen ... · Modul “Markt- und finanzorientierte ... • Implement this design by sampling and gathering data ... affects variable