National Supervision and Income Smoothing in Banks’ Annual Reports (SpringerBriefs in Accounting)

This book deals with the debated relationship between the characteristics of national supervision and manipulative practices in banks’ annual reports, with a specific focus on income smoothing. The issue is quite challenging as, since the 2008 financial crisis, governmental bodies and regulators have stressed the crucial role of supervision for bank transparency purposes, but the effect of supervision on accounting manipulation is still discussed. Focusing on European banks, the book investigates whether the characteristics of national supervision affect bank propensity to smooth income, also considering the potential role of bank business models. By exploring a broad range of national supervision’s characteristics, the book presents a comprehensive view on the influence of country-level institutional settings on a form of earnings management widely used across the banking industry. Contents Chapter 1: Introduction References Chapter 2: After the Crisis: New Approaches in Accounting Standards Applied by Banks and the New Framework for Banking Supervi... 2.1 The Revision of Accounting Rules Disciplining Bank Annual Reports 2.1.1 The Introduction of the Business Model Approach to Financial Instrument Reporting 2.1.2 The New Standard and the Approach to Classification and Measurement 2.1.3 The Introduction of the Expected Loss Approach to Impairment Model 2.2 The New Framework for Banking Supervision 2.2.1 Supervisors ́ Activity in the Scope of the Supervisory Review and Evaluation Process 2.2.2 Supervisors Assessing Banks ́ Asset Quality: Information at the Entity Level and at the Country Level from the First Comp... 2.2.3 Stress Tests Carried Out by the European Banking Authority 2.2.4 The Business Model Assessment in the Scope of Supervisory Activities References Chapter 3: Financial Supervision and Bank Accounting Numbers: State of the Art 3.1 The Role of Financial Supervisors and the Effects on Banks ́ Performance 3.2 Supervisory Characteristics Banks ́ Accounting Behaviour 3.2.1 Supervisory Strictness 3.2.2 Independence of the Supervisory Authority 3.2.3 Strength of External Auditing 3.2.4 Market Monitoring 3.2.5 Supervisory Effectiveness 3.3 Business Model and Accounting Behaviours 3.3.1 The Concept of Business Model and the Theoretical Debate in the Accounting Literature 3.3.2 Empirical Evidence 3.3.3 Business Model and Banks ́ Accounting Behaviours References Chapter 4: Supervisory Characteristics and Income Smoothing: The Case of European Banks 4.1 Facets of National Supervision and Bank Income Smoothing: The Key Points 4.2 Research Design 4.3 Sample and Data Collection 4.4 Results of the Empirical Analysis References Chapter 5: Exploring the Role of Business Models 5.1 Linking the Business Model to Bank Smoothing Strategies 5.2 Methodological Approaches to the Identification of Bank Business Models: A Review 5.3 Cluster Analysis and Emerging Business Models 5.4 Models and Variables 5.5 Results of the Empirical Analysis References Chapter 6: Conclusions References Appendix