Table 1 Survey statement frequencies and...

Table 1

Survey statement frequencies and descriptive statistics

Statement	Relative frequencies (%)					Mean	S.D.	N	t-statistic
Statement	1	2	3	4	5	Mean	S.D.	N	t-statistic
S1: “In my opinion, valuation based on expected cash flows in US GAAP financial statements is a good practice.”	2.1	10	10	45	32.9	3.97	1.01	289	16.33***
S2: “Determining the fair value of assets in the balance sheet is a good practice.”	1.7	9.7	10	35.2	43.5	4.09	1.04	290	17.85***
S3: “Management does not recognize a goodwill impairment loss if earnings have an impact on executive compensation.”	17.7	13.5	27.7	29.8	11.4	3.04	1.26	289	0.540
S4: “CEOs are unwilling to take a goodwill impairment charge if it worsens his/her position in the company.”	13.6	14	20.3	35.3	16.8	3.28	1.28	286	3.70***
S5: “Companies tend to avoid goodwill impairment losses if possible.”	3.1	6.6	21.7	36.6	32.1	3.88	1.03	290	14.487***
S6: “Executive compensation does not influence the decision to impair goodwill in listed companies.”	9.7	28.1	36.8	14.2	11.1	3.01	1.16	288	0.15
S7: “Valuation based on estimates made by management in US GAAP financial statements is not reliable.”	11.4	24.2	24.9	31.1	8.3	3.44	1.03	289	7.26***
S8: “The rules of goodwill accounting under US GAAP improve information content of financial statements.”	5.6	11.1	30.6	39.6	13.2	3.52	0.99	288	8.91***
S9: “Impairment testing that complies with US GAAP is reliable.”	0.4	14.5	25.6	42.6	14.5	3.43	0.97	289	7.54***
S10: “The rules of goodwill accounting under US GAAP enable earnings management.”	4.5	8.7	38.5	35.8	12.5	3.92	1.02	288	7.524***
S11: “Companies are afraid of how investors react to goodwill impairment charges.”	2.4	8.3	17	39.1	33.2	3.59	0.97	289	15.31***
S12: “Impairment testing enables excessive discretion in valuation.”	2.1	11.8	27.4	42	16.7	3.62	0.92	288	11.44***
S13: “The rules of goodwill accounting under US GAAP may lead to inconsistencies in the financial information provided in financial statements.”	1.8	10.5	26.3	46.3	15.1	3.16	1.12	285	2.41**
S14: “A goodwill impairment loss is recognized when the reported earnings would have been negative in any case.”	9.9	14.5	37.1	26.5	11.7	3.32	0.99	283	5.54***
S15: “The rules of goodwill accounting under US GAAP lead to increasing earnings management.”	4.9	12.3	39.8	32	10.9	3.97	1.01	284	16.18***

Statement	Relative frequencies (%)					Mean	S.D.	N	t-statistic
Statement	1	2	3	4	5	Mean	S.D.	N	t-statistic
S1: “In my opinion, valuation based on expected cash flows in US GAAP financial statements is a good practice.”	2.1	10	10	45	32.9	3.97	1.01	289	16.33***
S2: “Determining the fair value of assets in the balance sheet is a good practice.”	1.7	9.7	10	35.2	43.5	4.09	1.04	290	17.85***
S3: “Management does not recognize a goodwill impairment loss if earnings have an impact on executive compensation.”	17.7	13.5	27.7	29.8	11.4	3.04	1.26	289	0.540
S4: “CEOs are unwilling to take a goodwill impairment charge if it worsens his/her position in the company.”	13.6	14	20.3	35.3	16.8	3.28	1.28	286	3.70***
S5: “Companies tend to avoid goodwill impairment losses if possible.”	3.1	6.6	21.7	36.6	32.1	3.88	1.03	290	14.487***
S6: “Executive compensation does not influence the decision to impair goodwill in listed companies.”	9.7	28.1	36.8	14.2	11.1	3.01	1.16	288	0.15
S7: “Valuation based on estimates made by management in US GAAP financial statements is not reliable.”	11.4	24.2	24.9	31.1	8.3	3.44	1.03	289	7.26***
S8: “The rules of goodwill accounting under US GAAP improve information content of financial statements.”	5.6	11.1	30.6	39.6	13.2	3.52	0.99	288	8.91***
S9: “Impairment testing that complies with US GAAP is reliable.”	0.4	14.5	25.6	42.6	14.5	3.43	0.97	289	7.54***
S10: “The rules of goodwill accounting under US GAAP enable earnings management.”	4.5	8.7	38.5	35.8	12.5	3.92	1.02	288	7.524***
S11: “Companies are afraid of how investors react to goodwill impairment charges.”	2.4	8.3	17	39.1	33.2	3.59	0.97	289	15.31***
S12: “Impairment testing enables excessive discretion in valuation.”	2.1	11.8	27.4	42	16.7	3.62	0.92	288	11.44***
S13: “The rules of goodwill accounting under US GAAP may lead to inconsistencies in the financial information provided in financial statements.”	1.8	10.5	26.3	46.3	15.1	3.16	1.12	285	2.41**
S14: “A goodwill impairment loss is recognized when the reported earnings would have been negative in any case.”	9.9	14.5	37.1	26.5	11.7	3.32	0.99	283	5.54***
S15: “The rules of goodwill accounting under US GAAP lead to increasing earnings management.”	4.9	12.3	39.8	32	10.9	3.97	1.01	284	16.18***

Note(s): Measurement scale: 1 = Disagree; 2 = Somewhat disagree; 3 = Undecided; 4 = Somewhat agree; 5 = Agree. The column “t-statistic” provides a one-sample t-test examining whether the mean value of responses differs from the neutral response “3”. *** p-value < 0.01, ** p-value < 0.0.05, * p-value < 0.1

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