Exploring the use of additional voluntary financial disclosures by Finnish public companies

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School of Business | Bachelor's thesis
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Authors

Date

2019

Department

Mikkelin kampus

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Mcode

Degree programme

(Mikkeli) Bachelor’s Program in International Business

Language

en

Pages

60 + 9

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Abstract

Objectives This Thesis investigated APM disclosures by Finnish public companies in terms of drivers, limitations, benefits and impacts. It also sought to identify the most common types of APM publications. Key drivers included the role of management’s strategic motives, management bias, entity-specific information, increased transparency and pressure from regulators. Key limitations included differences in calculation methods, a possibility of incorrect stock valuations, inconsistencies between APMs and GAAP figures and insufficient external audits. In addition, the effects of ESMAs guidelines on APMs were explored. Summary Research methods consisted primarily of a questionnaire and complementary interviews. 20 experts from accountancies, consultancies and banks were surveyed replicating a study conducted by Munyaradzils (2016) following recommendations for future research by Marquez A. (2017). Researcher also added additional questions concerning the effects of ESMAs 2015 guidelines. The surveys were analyzed through descriptive statistics, a correlation matrix, system diagrams, decision trees and comparisons with prior research. Results of the surveys were also discussed with officials from the FSA, EU and professionals working closely with APM disclosures in Finland. Conclusions Main findings of this thesis supported previous research by the FSA (2017) and Härkälä (2018) suggesting that the effects of ESMAs guidelines on APMs in Finnish public companies have been limited so far. Most common APMs were similar to previous research conducted within the EU and in the original study. Respondents noted differences in calculation methods and publication of exclusively favorable APMs as biggest limitations of these voluntary disclosures. However most experts saw APMs as a mean of increasing transparency and complementing IFRS disclosures rather than distorting financial information published within financial statements.

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Thesis advisor

Stepanov, Roman

Keywords

alternative performance measures, voluntary financial reporting, financial reporting guidelines, ESMA guidelines on alternative performance measures

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Permanent link to this item

https://urn.fi/URN:NBN:fi:aalto-201910135643

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[kand] Kauppakorkeakoulu / BIZ