Fair Value Opinion Shopping

<p>This study reports the results of a series of experiments designed to provide empirical evidence related to fair value opinion shopping. Experiment 1 provides initial evidence that managers fair value opinion shop for external valuation professionals in the current regulatory environment. Further, the results of Experiment 1 suggest that informing managers that they are required to disclose to the board and/or auditor the fact that they obtained multiple opinions generally deters managers from fair value opinion shopping for personal benefits, but not for shareholder benefits. Results of Experiment 2 show that a regulatory change requiring boards to approve or reject a manager's request to seek a second fair value opinion will serve as an effective control against fair value opinion shopping. However, paradoxically, results of Experiment 2 show that boards are more likely to approve a manager's request to fair value opinion shop when it is transparently disclosed. Experiment 3 shows that a regulatory change requiring firms to inform their auditor when they obtain multiple fair value opinions results in increased audit procedures and a reduction in auditors beliefs about the reliability of the second external valuation professional's fair value opinion.</p>

Name thesis:degree_name

Ph.D.

Level thesis:degree_level

Campus Access Dissertation

Discipline thesis:degree_discipline

Moore School of Business

Year

2010

Author dc:creator

• Salzsieder, Leigh

Contributors dc:contributor

• Scott Jackson

• Business
• Business Administration, Management, and Operations
• Deterrence
• Fair Value Measurement
• Governance
• Opinion Shopping

Statement dc:rights

• © 2010, Leigh Salzsieder

Repository record dc:identifier

https://scholarcommons.sc.edu/etd/255

OAI identifier oai:identifier

oai:scholarcommons.sc.edu:etd-1256