Publication Type
Conference Paper
Publication Date
1-2017
Abstract
Prior research suggests that there are significant differences in how investors perceive the reliability of fair values across the fair value hierarchy. An unaddressed question in this stream of research is whether cross-country differences in institutional factors are able to mediate differences in reliability for the fair value hierarchy measurements. Based on an international sample of banks across 20 different countries, we find that the probability of crash risk is lower among countries with better financial development infrastructure, greater level of trust, tighter security regulations and higher level of disclosure requirements. These results apply to Level 1 assets but not to Level 2 and Level 3 assets. We also document that these cross-country factors improve the trading volume of our sample banks. Our study suggests that while ongoing concerns toward the more opaque fair values are not fully eliminated by institutional differences,they matter in influencing investor willingness to trade in these stocks.
Keywords
Fair value accounting, Institutional factors, Realibility
Discipline
Accounting | Finance and Financial Management
Research Areas
Corporate Governance, Auditing and Risk Management
Publication
7th International Conference of the Japanese Accounting Review 2017, Kobe, Japan, 2017 January 7;Journal of Contemporary Accounting and Economics (JCAE) Doctoral Consortium and Annual Symposium, Taipei, Taiwan, 2017 January 4-6;The 29th Australasian Finance and Banking Conference, Sydney, Australia, 2016 December 14-16;The 2017 AsiaPacific University-Industry Engagement Conference, Adelaide, Australia, 2017 February 15-17
First Page
1
Last Page
29
City or Country
Kobe, Japan
Citation
LIM, Chu Yeong; NG, Tee Yong Jeffrey; OW YONG, Keng Kevin; and PAN, Gary.
Differences in the reliability of fair value hierarchy measurements: A cross country study. (2017). 7th International Conference of the Japanese Accounting Review 2017, Kobe, Japan, 2017 January 7;Journal of Contemporary Accounting and Economics (JCAE) Doctoral Consortium and Annual Symposium, Taipei, Taiwan, 2017 January 4-6;The 29th Australasian Finance and Banking Conference, Sydney, Australia, 2016 December 14-16;The 2017 AsiaPacific University-Industry Engagement Conference, Adelaide, Australia, 2017 February 15-17. 1-29.
Available at: https://ink.library.smu.edu.sg/soa_research/1613
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Comments
7th International Conference of the Japanese Accounting Review 2017, Kobe, Japan, 2017 January 7; Journal of Contemporary Accounting and Economics (JCAE) Doctoral Consortium and Annual Symposium, Taipei, Taiwan, 2017 January 4-6; The 29th Australasian Finance and Banking Conference, Sydney, Australia, 2016 December 14-16; The 2017 Asia Pacific University-Industry Engagement Conference, Adelaide, Australia, 2017 February 15-17