Board characteristics and the value relevance of fair values

Jimi Siekkinen ()
Additional contact information
Jimi Siekkinen: Hanken School of Economics

Journal of Management & Governance, 2017, vol. 21, issue 2, No 7, 435-471

Abstract: Abstract This study investigates whether board characteristics affect the value relevance of fair value estimates in financial firms under International Financial Reporting Standard (IFRS) 13. Specifically, the study will focus on whether a better and more efficient monitoring of managers, after the adoption of this new regulation, has an effect on the information quality of fair values. IFRS 13 requires firms to disclose a fair value hierarchy containing three levels: Level 1 (quoted prices in active markets), Level 2 (inputs other than quoted prices that are observable either directly or indirectly) and Level 3 (unobservable inputs generated by entities). The results indicate that, in a post IFRS 13 era, board independence and gender diversity have a positive effect on the value relevance of fair value estimates (Level 3). In addition, firms with larger boards have lower information quality of firm-generated fair value estimates. Moreover, initial analysis shows that all fair values are value relevant to investors and the adoption of IFRS 13 has blurred the lines between the three levels in the fair value hierarchy. Hence, IFRS 13 has successfully reduced the information asymmetry related to fair value estimates.

Keywords: Fair value accounting; Fair value hierarchy; IFRS 13; Board characteristics; Value relevance (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://link.springer.com/10.1007/s10997-016-9350-8 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:jmgtgv:v:21:y:2017:i:2:d:10.1007_s10997-016-9350-8

Ordering information: This journal article can be ordered from
http://www.springer. ... 29/journal/10997/PS2

DOI: 10.1007/s10997-016-9350-8

Access Statistics for this article

Journal of Management & Governance is currently edited by Lino Cinquini

More articles in Journal of Management & Governance from Springer, Accademia Italiana di Economia Aziendale (AIDEA) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().