Doctoral thesis: Corporate governance, investor protection and auditing mechanisms have a positive effect on asset valuation
In his doctoral thesis "Within and Cross-Country Differences in the Value Relevance of Fair Values”, Jimi Siekkinen addresses how internal and external control mechanisms can be used to minimise potential abuse by senior management when making fair value assessment of financial assets and liabilities. Siekkinen studies whether corporate governance, legislation and good quality auditing can improve the confidence of investors in the reporting of financial instruments.
"Companies with small, independent boards of directors that are diverse in terms of, for example, gender, experience a positive effect on the quality of information about assets assessed at fair value, as well as minimize opportunism and agency costs caused by of senior management," says Siekkinen.
Siekkinen has also studied the link between the use of auditing services and the assessment of complex financial instruments. The results show that companies in economically stable countries benefit from using the so-called Big 4 auditors, while in economically unstable countries the influence is de facto more negative.
In his study of thirty-four countries that apply IFRS regulations, Siekkinen shows that in companies from countries with well-developed investor protection legislation, there is a better quality in the reporting of financial instruments.
"In countries with poor levels of investor protection, investors have no confidence in fair value reporting and instead rely entirely on market value," claims Siekkinen.
The results of the thesis are of relevance for three main groups: Companies can adopt the proposals for good corporate governance in order to guarantee high quality accounting, investors can require companies to follow recommendations in order to improve investor protection, and decision-makers can use the information to develop their auditing standards.
EM Jimi Siekkinen defends his doctoral thesis in accounting: ”Within and Cross-Country Differences in the Value Relevance of Fair Values”.
Date and time: 8 June 2016, 2.00 pm
Venue: Assembly Hall, Hanken School of Economics, Vasa
Opponent: Professor Trond Randøy, University of Agder
Custos: Professor Minna Martikainen, Hanken School of Economics
The doctoral thesis can be downloaded via this link:
http://hdl.handle.net/10138/162990
For more information:
Jimi Siekkinen
e-mail: jimi.siekkinen@hanken.fi