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Accounting Tradition and other drivers of the Fair Value choice: An Opportunistic Management perspective

Marco Fasan () and Carlo Marcon ()
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Marco Fasan: Dept. of Management, Università Ca' Foscari Venice
Carlo Marcon: Dept. of Management, Università Ca' Foscari Venice

No 13, Working Papers from Department of Management, Università Ca' Foscari Venezia

Abstract: The present study tests the impact of accounting tradition, financial leverage and book to market ratio on the fair value choice for a sample of 427 Anglo-Saxon and Continental European companies. We show that, in terms of accounting choices, differences between Anglo-Saxon and Continental European firms still exist, with the former being more likely to choose fair value, consistently with their accounting tradition. By relying on the opportunistic management and accounting choice literature, we test the impact of other two drivers of the fair value choice (financial leverage and price to book ratio) in the two different contexts (Anglo-Saxon and Continental European) and we find that these two drivers have different implications conditional on the context. This implies that empirical evidence gathered in the Anglo-Saxon context cannot be generalized sic et simpliciter to the Continental European context.

Keywords: accounting choice; fair value; accounting (search for similar items in EconPapers)
JEL-codes: M41 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2014-07
New Economics Papers: this item is included in nep-acc
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