Relevance of risk information for depositors’ judgment and decision-making

Kathrin Jordan, Susanne Homölle

Abstract


For several years risk reporting of banks has been high on the agenda. Banks must disclose information on their risk exposure to enhance market discipline. As a precondition for this positive effect of risk reporting, the risk information provided by the banks must be relevant for the depositors' and other investors’ judgments and decisions. In this paper, we analyze whether this is really true. Using an experimental design we show that risk information may influence the individuals’ judgments and decisions. We find that positive (negative) risk information lead to more positive (more negative) evaluations. In the case of conspiring risk and financial statement information the judgments and decisions are most pronounced. However, this enhancing effect of risk information is not significant. Considering opposing risk and financial statement information we find that positive (negative) risk information lead to more positive/less negative (more negative/less positive) judgments and decisions. Risk information can even reverse the effect of opposing financial statement information on the individuals’ judgment of the banks’ risk exposure.


Keywords


Risk disclosure; Risk reporting; Risk management.

Full Text:

PDF

References


American Accounting Association. Committee to Prepare a Statement of Basic Accounting Theory, (1966). A Statement of Basic Accounting Theory No. 6. American Accounting Association, Sarasota.

Anderson, R.C., Pearson, P.D., (1984). A schema-theoretic view of basic processes in reading comprehension, in: Pearson, P.D. (Ed.), Handbook of reading research. Longman Inc, New York, pp. 255-291.

Ashton, R.H., Kramer, S.S., (1980). Students as surrogates in behavioral accounting research: some evidence. Journal of Accounting Research, 18: 1-15.http://dx.doi.org/10.2307/2490389

Backhaus, K., Erichson, B., Plinke, W., Weiber, R., (2011). Multivariate Analysemethoden: Eine anwendungsorientierte Einführung. Heidelberg: Springer. http://dx.doi.org/10.1007/978-3-642-16491-0

Baetge, J., Fischer, T.R., Paskert, D., (1989). Der Lagebericht: Aufstellung, Prüfung und Offenlegung. Stuttgart: Schäffer.

Ball, R., Brown, P., (1968). An empirical evaluation of accounting income numbers. Journal of Accounting Research, 6: 159-178.http://dx.doi.org/10.2307/2490077, http://dx.doi.org/10.2307/2490232

Ballwieser, W., (2002). Informations-GoB – auch im Lichte von IAS und US-GAAP. KoR, 3: 115-121.

Basel Committee on Banking Supervision, (2004). International convergence of capital measurement and capital standards: a revised framework. Bank for International Settlements, Basel.

Beaver, W.H., (1968). The information content of annual earnings announcements. Journal of Accounting Research, 6: 67-92. http://dx.doi.org/10.2307/2490070

Bieg, H., (2010). Bankbilanzierung nach HGB und IFRS. München: Verlag Franz Vahlen.

Bruns, W.J., DeCoster, D.T. (Eds.), (1969). Accounting and its behavioral implications. New York: McGraw-Hill.

Bühner, R., Möller, P., 1985. The information content of corporate disclosures of divisionalisation decisions. Journal of Management Studies, 22: 309-326. http://dx.doi.org/10.1111/j.1467-6486.1985.tb00078.x

Bundestag, D., (1998). Gesetzesentwurf der Bundesregierung – Entwurf eines Gesetzes zur Kontrolle und Transparenz im Unternehmensbereich (KonTrag). Bundestagsdrucksache, 13(9712).

Bundestag, D., (2004). Gesetzesentwurf der Bundesregierung – Entwurf eines Gesetzes zur Einführung internationaler Rechnungslegungsstandards und zur Sicherung der Qualität der Abschlussprüfung (BilReG). Bundestagsdrucksache, 15(3419).

Christensen, L.B., (2007). Experimental Methodology. Pennsylvania: Pearson.

Coenenberg, A.G., Brandi, E.H., (1979). The Information Content of the Annual Income Numbers of German Corporations: A Review of German Accounting Standards and some Preliminary Empirical Results. The Annuals of the School of Business Administration, Lanchester: 1-27.

Coenenberg, A.G., Haller, A., (1993a). Empirische Forschung, in: Chmielewicz, K., Schweitzer, M. (Eds.), Handwörterbuch des Rechnungswesen. Stuttgart: Schäffer-Poeschel, pp. 506-517.

Coenenberg, A.G., Haller, A., (1993b). Externe Rechnungslegung, in: Hauschildt, J., Grün, O. (Eds.), Ergebnisse empirischer betriebswirtschaftlicher Forschung. Stuttgart: Schäffer-Poeschel, pp. 557-599.

Coenenberg, A.G., Haller, A., Schultze, W., (2009). Jahresabschluss und Jahresabschlussanalyse: Betriebswirtschaftliche, handelsrechtliche und international Grundsätze – HGB, IFRS, US-GAAP. Stuttgart: Schäffer-Poeschel.

Cready, W.M., Mynatt, P.G., (1991). The Information Content of the Annual Reports: A Price and Trading Response Analysis. The Accounting Review, 66: 291-312.

Cunningham, S.M., (1967). The Major Dimensions of Perceived Risk, in: Cox, D.F. (Ed.), Risk Taking and Information Handling in Consumer Behavior. Harvard Business School, Boston, pp. 82-108.

Ellrott, H, (2010). §289 Lagebericht, in: Ellrott, H., Förschle, G., Kozikowski, M., Winkeljohann, N (Eds.), Beck'scher Bilanz-Kommentar. Beck, München, pp. 1393-1465.

Ernst, E., Gassen, J., Pellens, B., (2009). Verhalten und Präferenzen deutscher Aktionäre. Eine Befragung privater und institutioneller Anleger zu Informationsverhalten, Dividendenpräferenz und Wahrnehmung von Stimmrechten. Frankfurt am Main: Deutsches Aktieninstitut e.V.

Ferris, K.R. (Ed.), (1988). Behavioral Accounting Research: A Critical Analysis. Ohio: Century VII Publishing Company.

Field, A., (2009). Discovering Statistics Using SPSS. London: SAGE Publications.

Gillenkirch, R.M., Arnold, M.C., (2008). State of the Art des Behavioral Accounting. WiSt 37: 128-134. http://dx.doi.org/10.15358/0340-1650-2008-3-128

Hodder, L., Koonce, L., McAnally, M.L., (2001). SEC Market Risk Disclosures: Implications for Judgement and Decision Making. Accounting Horizons, 15: 49-70. http://dx.doi.org/10.2308/acch.2001.15.1.49

Hofmann, Y.E., (2007). Behavioral Accounting, in: Köhler, R., Küpper, H., Pfingsten, A. (Eds.), Handwörterbuch der Betriebswirtschaft. Stuttgart: Schäffer-Poeschel, pp. 77-85.

Hofstedt, T.R., (1976). Behavioral Accounting Research: Pathologies, Paradigms and Prescriptions. Accounting, Organizations and Society, 1: 43-58. http://dx.doi.org/10.1016/0361-3682(76)90006-4

Holzer, H.P., Lück, W., (1978). Verhaltenswissenschaft und Rechnungswesen: Entwicklungstendenzen des Behavioral Accounting in den USA. DBW, 38: 509-523.

Hovland, C.I., Irving, J.L., Kelley, H.H., (1953). Communication and Persuasion. New Haven/London: Yale University Press.

Jensen, M.C., Meckling, W.H., (1976). Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure. Journal of Financial Economics, 3: 305-360. http://dx.doi.org/10.1016/S0022-5193(76)80085-9

Kaufmann, C., (2011). The Influence of Information Presentation, Psychological Mechanisms, and Personal Characteristics on Households' Financial Decision Making. Mannheim: Universität Mannheim.

Keller, E., Möller, H.P., (1993). Die Auswirkungen der Zwischenberichterstattung auf den Informationswert von Jahresabschlüssen am Kapitalmarkt: Konzeption und Ergebnisse einer kapitalmarktorientierten empirischen Untersuchung zum Informationsgehalt der Jahresabschlüsse deutscher Aktiengesellschaften. Zeitschrift für betriebswirtschaftliche Forschung - Sonderheft, 31: 35-60.

Kercher, J., (2013). Verstehen und Verständlichkeit von Politikersprache. Wiesbaden: Springer. http://dx.doi.org/10.1007/978-3-658-00191-9

Koonce, L., Lipe, M.G., McAnally, M.L., (2005a). Judging the Risk of Financial Instruments: Problems and Potential Remedies. The Accounting Review, 80: 871-895. http://dx.doi.org/10.2308/accr.2005.80.3.871

Koonce, L., McAnally, M.L., Mercer, M., (2005b). How do Investors Judge the Risk of Financial Items?. The Accounting Review, 80: 221-241. http://dx.doi.org/10.2308/accr.2005.80.1.221

Kumar M., S., Kumar, M., (2012). The Impact of Perceived Purchase Risk on Investment Behaviour of Mutual Fund Investors. Decision, 39: 3-20.

Kürsten, W., (1994). Finanzkontrakte und Risikoanreiz problem: Mißverständnisse im informationsökonomischen Ansatz der Finanztheorie. Wiesbaden: Gabler. http://dx.doi.org/10.1007/978-3-322-89500-4

Küster-Rohde, F., (2010). Die Wirkung der Glaubwürdigkeit in der Marketing kommunikation. Wiesbaden: Gabler. http://dx.doi.org/10.1007/978-3-8349-8493-7

Leuz, C., Wüstemann, J., (2004). The Role of Accounting in the German Financial System, in: Krahnen, J. P., Schmidt, R. H. (Eds.), The German Financial System. Oxford University Press, Oxford, pp. 450-481. http://dx.doi.org/10.1093/0199253161.003.0014

Lev, B., (1989). On the Usefulness of Earnings and Earnings Research: Lessons and Directions from Two Decades of Empirical Research. Journal of Accounting Research, 27: 153-192. http://dx.doi.org/10.2307/2491070

Libby, R., Bloomfield, R., Nelson, M.W., (2002). Experimental Research in Financial Accounting. Accounting, Organizations and Society, 27: 775-810. http://dx.doi.org/10.1016/S0361-3682(01)00011-3

Lowin, A., (1969). Further Evidence for an Approach-Avoidance Interpretation of Selective Exposure. Journal of Experimental and Social Psychology, 5: 265-271. http://dx.doi.org/10.1016/0022-1031(69)90052-3

Maines, L.A., (1995). Judgment and Decision-Making Research in Financial Accounting: A Review and Analysis, in: Ashton, R.H., Ashton, A.H. (Eds.), Judgment and Decision Making Research in Accounting and Auditing. Cambridge University Press, Cambridge, pp. 76-101. http://dx.doi.org/10.1017/cbo9780511720420.006

Maines, L.A., McDaniel, L.S., (2000). Effects of Comprehensive- Income Characteristics on Nonprofessional Investors' Judgments: The Role of Financial-Statement Presentation Format. The Accounting Review, 75: 179-207. http://dx.doi.org/10.2308/accr.2000.75.2.179

Mölls, S.H., Strauß, M., (2005). Zur empirischen Analyse der Entscheidungsrelevanz der Rechnungslegung. PhD thesis. University Marburg.

Moxter, A., (1976). Fundamentalgrundsätze ordnungsmäßiger Rechenschaft, in: Baetge, J., Moxter, A., Schneider, D. (Eds.), Bilanzfragen. IDW-Verlag, Düsseldorf, pp. 87-100.

Mrazek, J., (1979). Verständnis und Verständlichkeit von Lesetexten. Frankfurt am Main: Lang.

Newell, S.J., Goldsmith, R.E., (2001). The Development of a Scale to Measure Perceived Corporate Credibility. Journal of Business Research, 52: 235-247. http://dx.doi.org/10.1016/S0148-2963(99)00104-6

Pellens, B., Fülbier, R.U., (2000). Differenzierung der Rechnungslegungsregulierung nach Börsenzulassung. Zeitschrift für Unternehmens- und Gesellschaftsrecht, 29: 572-593. http://dx.doi.org/10.1515/zgre.2000.025

Schildbach, T., (2004). Der handelsrechtliche Jahresabschluss. Herne: Neue Wirtschafts-Briefe.

Schnotz, W., Ballstaedt, S.P., Mandl, H., (1981). Kognitive Prozesse beim Zusammenfassen von Lehrtexten, in: Mandl, H. (Ed.), Zur Psychologie der Textverarbeitung. Urban & Schwarzenberg, München, pp. 108-167.

Slovic, P., (1987). Perception of Risk. Science, 236: 280-285. http://dx.doi.org/10.1126/science.3563507

Staubus, G., (2000). The Decision-Usefulness Theory of Accounting: A Limited History. New York: Routledge.

Thayer, J., (2011). Determinants of Investors' Information Acquisition: Credibility and Confirmation. The Accounting Review, 86: 1-22. http://dx.doi.org/10.2308/accr.00000015

Thiry, D., (2009). Eine empirische Analyse der Marktdisziplinierung deutscher Sparkassen. Wiesbaden: Gabler. http://dx.doi.org/10.1007/978-3-8349-8368-8

Türr, H., (2014). Die Risikoberichterstattung von Sparkassen. Eine empirische Analyse. Aachen: Shaker.

Weber, D., (2010). Risikopublizität in der Krise (Teil 1): Problemfelder der gegenwärtigen Offenlegungspraxis. Risiko-Manager, 21: 1, 10-19.

Zepp, M., (2007). Der Risikobericht von Kreditinstituten: Anforderungen, Normen, Gestaltungsempfehlungen. Berlin: Erich Schmidt Verlag.




DOI: http://dx.doi.org/10.18533/jefs.v3i03.158

Article Metrics

Metrics Loading ...

Metrics powered by PLOS ALM

Refbacks

  • There are currently no refbacks.
';



Copyright (c) 2015 Kathrin Jordan, Susanne Homölle

.............................................................................................................................

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

.............................................................................................................................

If you find difficulties in submitting manuscript please forward your doc file to support@journalofeconomics.org. Our support team will assist you in submission process and other technical matters. Please note that documents uploaded by yourself are reviewed more quickly than replies by e-mail.

In order to get notifications on inbox please add  this domain journalofeconomics.org in your email safe list.

.............................................................

ISSN 2379-9463(Print)
ISSN 2379-9471(Online)

...........................................................