Las rutas de inoculación intramuscular e intraperitoneal permiten infectar de forma efectiva doradas juveniles de diversa talla con LCDV-Sa Las infecciones

4.

Conclusions

4.1. Discussion of the thesis concepts and results !

The conclusion we can draw basing above all on the first chapter is that the goodwill notion has changed over the time. However, the definition and treatment of goodwill still today are thorny matters and a definite agreement seems hard to be reached. Moving to the empirical researches I find that the ownership structures and the governance mechanisms affect the unexpected discretionary portion of the impairment losses (see Appendix A for the results). The international comparison reveals the complexity of such effect. Insider ownership is positively associated to discretionary assets write-off suggesting a uniform behaviour regardless of the ownership level, in UK and Italy, while this result is not confirmed for the German sample. Further, I find that in the UK and in the German samples, institutional investors ownership is associated to lower discretionary asset write-offs. This result is consistent with the expectation that institutional investors devote a greater attention to the financial reporting quality exercising a stronger control over the financial information. Nonetheless, this finding is not significant in the Italian sample. I suggest that in Italy the high ownership concentration, risks of wealth expropriation and lack of board independence, limit the institutional investors in influencing the decision-making process. Consistently with the political theory, state ownership is associated to increased discretionary impairment losses in the Italian sample. Either driven by the politicians’ interests or by “common good objectives”, state owned companies have incentives to manipulate assets write-offs. This result is not confirmed in the German sample where the supervisory board not only monitors the management, but also reconcile the interests of different stakeholders in the discussion of key managerial decisions. The German two-tier system may be efficient for the monitoring activity exerted by institutional investors. This could explain why institutional investors ownership is a significant variable affecting discretionary impairment losses unlike the other ownership variables considered. Overall, the European comparison indicates possible relations among ownership structures and corporate governance in influencing the accounting decisions. The

governance system and environment lead to a diverse influence of ownership structures on the accounting decision-making process.

I then questioned the CFOs their perceptions on the impairment of goodwill; their responses might be useful for standard setters, regulators, practitioners and academics (see Appendix B3 for the survey results). For example, about 54% of the respondent CFOs believes that the prohibition of goodwill write-offs reversals increases the likelihood of untimely and/or underestimated write-offs, hence, standard setter might consider the possibility of accounting for goodwill as the other intangibles with indefinite useful lives or allowing the reversals under determined conditions. With reference to the ownership structures CFOs perceive higher risks when managerial, concentrated or state ownership are prevalent. CFOs perceptions also may intimate when the financial reporting reliability is weakened and hence where substitute corporate governance mechanisms should play a relevant role in constraining the use of discretionary accounting choices. Another interesting point of view is on the external auditor role. From the CFOs responses I got the reply of the significance of auditor expertise in both the industry and in the task of assessing the write-offs, as a consequence, regulators might require certain skills/expertise from auditor in order to better perform their assessments. Also, CFOs perceive as significantly important in constraining the write-off manipulation the mandatory auditor rotation.

More than half of the participants to the survey reveal that alternative way to account for goodwill could provide more valuable information and 47% of the respondents indicate also the importance of requiring additional disclosure, this result should be considered examining also the importance of voluntary vs. mandatory disclosure. The final question on the CFOs preference between the impairment test and the amortization of goodwill directly answers to the EFRAG recent debate on the possible reintroduction of the goodwill amortization. Although the difficulties underlined to implement the test, the 66% of the respondents overall prefer the impairment of goodwill. However, it should not be undervalued that the remaining 34% still prefer the amortization process.

After the empirical research on the internal corporate governance influences on the impairment decisions I discuss how certain auditor characteristics can encourage auditors to deliver lenient (“friendly”) audits on goodwill write-offs. Indeed, an inclination towards delivering a lenient audit can be aligned with managers’ interest

to use goodwill write-offs for earnings management purposes. Finally, I briefly examine how the financial analysts’ estimates could adversely affect the impairment decision process driving the management to satisfy the market earnings expectations. To sum up the above relations in Table 4.1 I link the earnings management policies with differing incentives related to differing corporate governance subjects. Specifically, in the course of this dissertation I explored the association between overestimated and underestimated impairment losses and the incentives that are associated to these earnings management practices. To outline a final discussion, I enclose amongst the incentives to report underestimated goodwill write-offs the following incentives: big bath, income smoothing, CEO changes, auditor conservatism and pessimistic analysts earnings forecasts in the previous year. Amongst the incentives to report underestimated goodwill write-off I mention the following: debt covenants, bonus-based remuneration scheme, insider ownership, state ownership and institutional ownership, inexpert or inexperienced auditor, non- independent auditor, optimistic earnings forecasts in the year prior to the impairment loss. In certain circumstances, the impairment losses actually reflect the underlying economics of the firm. It might happen that managers’ incentives are not preponderant, the auditor is neutral and independent and discover the breach constraining the manipulation and the analysts’ earnings forecasts are sufficiently accurate that do not create incentive to beat. Also, certain ownership structures (e.g. institutional and state ownership) might control the financial reporting process and exert pressure for reliable estimates.

Table 4.1: Discretionary use of goodwill write-offs and corporate governance subjects: earnings effects EARNINGS EFFECT CORPORATE GOVERNANCE SUBJECTS OVERESTIMATED WRITE-OFFS “FAIR” WRITE-OFFS UNDERESTIMATE D WRITE-OFFS MANAGERS • Big Bath • Income Smoothing • CEO Changes • No managers incentives • Debt covenants • Bonus based remuneration OWNERSHIP TYPES • State ownership • Institutional ownership • Insider ownership • State ownership • Institutional ownership EXTERNAL AUDITOR • Auditor conservatism

• Neutral auditor • Inexpert,

inexperienced or not-independent auditor FINANCIAL ANALYSTS • Pessimistic earnings forecasts in t-1 Earnings forecasts error tend to zero

• Optimistic earnings

forecasts in t-1

4.2.The contribution of the study to the field of knowledge

!

Carnegie and Napier (2012) stress the unifying power of history among past, present and future and the importance of appreciating the contemporary accounting practices through retrospective lens. In this sense, I attempt to contribute to the accounting history studies by providing an historical analysis of the goodwill and impairment test concepts as conceived by several prominent Italian scholars. I also attempt to essentially delineate some similarities and differences that the same concepts assumed among International scholars. Hence, recent discussions over the value of the long-lived assets and over the concept of recoverable amount through their use

(value in use) or their sale (fair value) might be better informed if accountants, regulators and more generally market participants were conscious of the past debates on the issue.

The empirical researches carried out can contribute to prior literature in several ways. Firstly, it is provided evidence that ownership types and corporate governance are intervening variables in the accounting decision-making process leading to assets impairment. Secondly, the findings show possible interdependencies among ownership structures and corporate governance in influencing the accounting choices. On the one hand, the ownership types influence on discretionary assets write-offs appear to be facilitated or constrained by the legal and the governance environment; on the other hand, ownership structures can prevent effective monitoring by governance mechanisms.

This study contributes to the literature by providing the CFOs perceptions on the impairment of goodwill as far as I know till today no prior studies investigated this perspective. Also, the results may be significant for practitioners and academics. The responses indicate that also from a practitioner point of view the impairment of goodwill vs. the amortization is a thorny issue.

The results may be of interest to market participants, policy makers and audit firms, interested in researches about the financial reporting reliability. The findings may contribute to the ongoing debate concerning financial reporting transparency and reliability before and after the economic crisis.

!

4.3.Limitations !

The first limitation of this study concerns with the first chapter where I do not contemplate the perspective of the practitioners and of professional bodies regarding the notion and treatment of goodwill. Nonetheless, this limitation only in part and with reference to the present is attenuated by the empirical results presented in the third chapter. For example, I find that overall nowadays CFOs believes that the impairment test, with all its difficulties and drawbacks, is preferable to the amortization of goodwill.

Then, as already anticipated in the first chapter, the historical excursus on the concept of goodwill should not be considered all-embracing as many other renowned Authors pronounced on the topic and as it is mainly Italian based.