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Revisiting the effectiveness of the German accounting enforcement reforms: a replication study

Author

Listed:
  • Marius Gros

    (University of Bremen)

  • Alexander Nevrela

    (University of Bremen)

Abstract

In this paper, we replicate and extend the study “Economic Consequences of Accounting Enforcement Reforms: The Case of Germany” published by Ernstberger, Stich and Vogler (ESV) in the European Accounting Review in 2012. ESV (in Eur Account Rev 21(2):217–251, 2012) is, among others, widely cited for the evidence it provides on the weak but consistently positive effects of the German accounting enforcement reforms on earnings quality, stock liquidity and market valuation. The results were to be expected and are in line with the literature prior to 2012. More recent empirical archival and survey studies question these weak positive effects and, in particular, their persistence. Hence, we believe it is beneficial to provide further evidence on whether regulatory measures in the field of financial reporting show the intended “impact” and contribute to regulators’ objectives. As a first step, we replicate ESV (2012), and in a second step, we extend the analysis to a longer-term investigation period. While some of our findings are similar to ESV (2012), we are not able to provide consistent evidence for an increase in earnings quality, stock liquidity or market valuation.

Suggested Citation

  • Marius Gros & Alexander Nevrela, 2020. "Revisiting the effectiveness of the German accounting enforcement reforms: a replication study," Management Review Quarterly, Springer, vol. 70(1), pages 135-164, February.
    • Handle: RePEc:spr:manrev:v:70:y:2020:i:1:d:10.1007_s11301-019-00162-9
    DOI: 10.1007/s11301-019-00162-9
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    Cited by:

    1. Kimouche Bilal, 2021. "Accounting Reforms And Accounting Quality: Evidence From Algeria," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 27, pages 33-53, June.
    2. Hardeep Singh Mundi, 2023. "Risk neutral variances to compute expected returns using data from S&P BSE 100 firms—a replication study," Management Review Quarterly, Springer, vol. 73(1), pages 215-230, February.

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    More about this item

    Keywords

    Replication; Enforcement; Regulation; Earnings management; Stock liquidity; Market valuation;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation

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