Prof. Dr. Kaya publishes Paper in leading Journal


Are mandatory disclosures and final audits obstacles to the growth of medium-sized companies? Empirical evidence on Size Management.

The paper „Size Management by European Private Firms to Minimize Proprietary Costs of Disclosure“ compiled by Prof. Kaya, Prof. Darren Bernard (London Business School) and Prof. David Burgstahler (University of Washington) has been published in the „Journal of Accounting and Economics“, one of the world’s leading journals.

The article reveals that middle-sized companies in Europe – particularly those at the threshold between small and middle-sized – manage size downward in order to be classified as small companies. In this way they are not obliged to disclose sensitive competitive information (eg. sales revenue). In addition they avoid having to prepare costly annual audits. The analysis shows that companies sacrifice up to 7% of their assets to avoid having to pay competitive and audit costs.

The empirical results are not only of interest from an economic point of view but are also significant for middle-sized companies, audit companies and the legislature.

Please click here to access the article online.