{"id":{"repo_id":"siu-theses","oai_identifier":"oai:opensiuc.lib.siu.edu:dissertations-1807"},"canonical_url":"https://search.dev.ndltd.org/etd/siu-theses/oai:opensiuc.lib.siu.edu:dissertations-1807","repository":{"repo_id":"siu-theses","name":"Southern Illinois University","base_url":"https://opensiuc.lib.siu.edu/do/oai/"},"display":{"title":"RISKY BUSINESS: HOW REVENUE MEASUREMENT AND RISK DISCLOSURE IMPACT EQUITY INVESTORS' VALUE JUDGMENT OF PRIVATE COMPANIES","abstract":"The Financial Accounting Standards Board (FASB) and the Public Company Accounting Oversight Board (PCAOB) have proposed standards that could alter the judgments of users of financial statements. This study examines how certain regulations including revenue measurement choices made by management combined with risk disclosure as proposed by the PCAOB could interact with the propensity of the user to rely on financial information to affect how a class of private company financial statement users - seed equity investors - value a private company. Through experimental methods manipulating revenue measurement choice and risk disclosure, I find that seed equity investor value judgments of early stage companies are significantly influenced by accounting disclosures. Specifically, accounting disclosures regarding level of risk and revenue measurement that accompany financial models in the valuation process significantly alter a seed equity investor's value judgment of early stage companies. This segment of financial statement users tends to place the majority of their reliance on non-financial, subjective factors as predictors of future success of early stage companies. Further, their judgments are swayed by wholly different financial disclosures than their \"Wall Street\" investor counterparts in that conservative and low risk information creates large revisions in value judgment. The implication of this study is to suggest that \"Main Street\" investors consume financial information and their related disclosures differently than \"Wall Street\" investors - an inference important for standards setters to understand as they craft regulations that govern private companies.","abstract_html":"The Financial Accounting Standards Board (FASB) and the Public Company Accounting Oversight Board (PCAOB) have proposed standards that could alter the judgments of users of financial statements. This study examines how certain regulations including revenue measurement choices made by management combined with risk disclosure as proposed by the PCAOB could interact with the propensity of the user to rely on financial information to affect how a class of private company financial statement users - seed equity investors - value a private company. Through experimental methods manipulating revenue measurement choice and risk disclosure, I find that seed equity investor value judgments of early stage companies are significantly influenced by accounting disclosures. Specifically, accounting disclosures regarding level of risk and revenue measurement that accompany financial models in the valuation process significantly alter a seed equity investor's value judgment of early stage companies. This segment of financial statement users tends to place the majority of their reliance on non-financial, subjective factors as predictors of future success of early stage companies. Further, their judgments are swayed by wholly different financial disclosures than their "Wall Street" investor counterparts in that conservative and low risk information creates large revisions in value judgment. The implication of this study is to suggest that "Main Street" investors consume financial information and their related disclosures differently than "Wall Street" investors - an inference important for standards setters to understand as they craft regulations that govern private companies.","abstract_has_math":false,"creators":["Cataldi, Bryan Daniel"],"institution":null,"degree_name":"Doctor of Philosophy","degree_level":"Campus Only Dissertation","degree_discipline":"Accountancy","degree_department":null,"school":null,"contributors":["O'Donnell, Ed"],"advisors":[],"committee_chairs":[],"committee_members":[],"year":2014,"date_issued":"2014-05-01T07:00:00Z","date_published":"2014-05-01T07:00:00Z","updated_at":"2026-07-24T04:34:20Z","subjects":["Angel","Angel Investor","Revenue","Risk Disclosure","Seed Equity Investor"],"languages":[],"rights":[],"rights_urls":[],"identifier_entries":[]},"links":{"outbound_url":"https://opensiuc.lib.siu.edu/dissertations/804","outbound_label":"Repository record","outbound_source":"dc:identifier"},"metadata_groups":[{"id":"people","label":"People","entries":[{"key":"dc:contributor","label":"Contributor","values":["O'Donnell, Ed"]},{"key":"dc:creator","label":"Author","values":["Cataldi, Bryan Daniel"]}]},{"id":"academic_context","label":"Academic Context","entries":[{"key":"thesis:degree_discipline","label":"Discipline","values":["Accountancy"]},{"key":"thesis:degree_level","label":"Degree Level","values":["Campus Only Dissertation"]},{"key":"thesis:degree_name","label":"Degree Name","values":["Doctor of Philosophy"]}]},{"id":"subjects_keywords","label":"Subjects and Keywords","entries":[{"key":"dc:subject","label":"Dc Subject","values":["Angel","Angel Investor","Revenue","Risk Disclosure","Seed Equity Investor"]}]},{"id":"identifiers","label":"Identifiers","entries":[{"key":"dc:identifier","label":"Identifier","values":["https://opensiuc.lib.siu.edu/dissertations/804"]}]},{"id":"additional","label":"Additional Metadata","entries":[{"key":"dc:description.abstract","label":"Abstract","values":["The Financial Accounting Standards Board (FASB) and the Public Company Accounting Oversight Board (PCAOB) have proposed standards that could alter the judgments of users of financial statements. This study examines how certain regulations including revenue measurement choices made by management combined with risk disclosure as proposed by the PCAOB could interact with the propensity of the user to rely on financial information to affect how a class of private company financial statement users - seed equity investors - value a private company. Through experimental methods manipulating revenue measurement choice and risk disclosure, I find that seed equity investor value judgments of early stage companies are significantly influenced by accounting disclosures. Specifically, accounting disclosures regarding level of risk and revenue measurement that accompany financial models in the valuation process significantly alter a seed equity investor's value judgment of early stage companies. This segment of financial statement users tends to place the majority of their reliance on non-financial, subjective factors as predictors of future success of early stage companies. Further, their judgments are swayed by wholly different financial disclosures than their \"Wall Street\" investor counterparts in that conservative and low risk information creates large revisions in value judgment. The implication of this study is to suggest that \"Main Street\" investors consume financial information and their related disclosures differently than \"Wall Street\" investors - an inference important for standards setters to understand as they craft regulations that govern private companies."]},{"key":"dc:title","label":"Title","values":["RISKY BUSINESS: HOW REVENUE MEASUREMENT AND RISK DISCLOSURE IMPACT EQUITY INVESTORS' VALUE JUDGMENT OF PRIVATE COMPANIES"]}]}],"canonical_facts":{"dc:contributor":["O'Donnell, Ed"],"dc:creator":["Cataldi, Bryan Daniel"],"dc:description.abstract":["The Financial Accounting Standards Board (FASB) and the Public Company Accounting Oversight Board (PCAOB) have proposed standards that could alter the judgments of users of financial statements. This study examines how certain regulations including revenue measurement choices made by management combined with risk disclosure as proposed by the PCAOB could interact with the propensity of the user to rely on financial information to affect how a class of private company financial statement users - seed equity investors - value a private company. Through experimental methods manipulating revenue measurement choice and risk disclosure, I find that seed equity investor value judgments of early stage companies are significantly influenced by accounting disclosures. Specifically, accounting disclosures regarding level of risk and revenue measurement that accompany financial models in the valuation process significantly alter a seed equity investor's value judgment of early stage companies. This segment of financial statement users tends to place the majority of their reliance on non-financial, subjective factors as predictors of future success of early stage companies. Further, their judgments are swayed by wholly different financial disclosures than their \"Wall Street\" investor counterparts in that conservative and low risk information creates large revisions in value judgment. The implication of this study is to suggest that \"Main Street\" investors consume financial information and their related disclosures differently than \"Wall Street\" investors - an inference important for standards setters to understand as they craft regulations that govern private companies."],"dc:identifier":["https://opensiuc.lib.siu.edu/dissertations/804"],"dc:subject":["Angel","Angel Investor","Revenue","Risk Disclosure","Seed Equity Investor"],"dc:title":["RISKY BUSINESS: HOW REVENUE MEASUREMENT AND RISK DISCLOSURE IMPACT EQUITY INVESTORS' VALUE JUDGMENT OF PRIVATE COMPANIES"],"thesis:degree_discipline":["Accountancy"],"thesis:degree_level":["Campus Only Dissertation"],"thesis:degree_name":["Doctor of Philosophy"]},"updated_at":"2026-07-24T04:34:20Z"}