Risk management: disclosure effects

This thesis explores the effect of disclosure on risk management policies. Following recent theory on risk management, with market imperfections, risk management creates value by reducing the volatility of the cash flows. Those risk policies are conditioned by actual disclosure rules that reduce inf...

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Autor Principal: Diez, Juan Francisco; Gutiérrez, Javier
Formato: Trabajo de grado (Bachelor Thesis)
Lenguaje:Desconocido (Unknown)
Publicado: 2009
Materias:
Acceso en línea:http://babel.banrepcultural.org/cdm/ref/collection/p17054coll23/id/1
id ir-p17054coll23-1
recordtype dspace
spelling ir-p17054coll23-12020-09-29 Risk management: disclosure effects Diez, Juan Francisco; Gutiérrez, Javier This thesis explores the effect of disclosure on risk management policies. Following recent theory on risk management, with market imperfections, risk management creates value by reducing the volatility of the cash flows. Those risk policies are conditioned by actual disclosure rules that reduce information asymmetry between managers and shareholders, providing a comprehensive view of the firm. However, disclosure gives different accounting choices, hence affecting the decision-making process of managers. The purpose of this thesis is to establish if managers adapt their actual risk policy to disclosure rules. Specifically, we discuss how managers make decisions regarding exchange rate risk in forecasted transactions. In addition, we discuss how hedging affects valuation by using an investor perspective. This is done through the analysis of the automotive industry in Sweden, Germany and France and the considerations of analysts and auditors. We found that risk management policies are affected by accounting rules and that analysts are aware of those effects but have problems to measure them. However, not enough evidence was found to prove that managers try to avoid the volatility the fair value option brings when hedging a forecasted flow. Accounting options; Agency costs; Bankrupcy costs; Corporate finance; Disclosure; Fair value accounting; Financial distress; Financial instruments; Hedge accounting; Information assimetry; Market efficiency; Risk management Ciencias sociales; Ciencias sociales / Economía 2009 PDF Tesis ENG - Inglés Suecia Colfuturo © Derechos reservados del autor http://babel.banrepcultural.org/cdm/ref/collection/p17054coll23/id/1
institution Biblioteca Virtual Banco de la República - Colecciones digitales
collection Custom
language Desconocido (Unknown)
topic Accounting options; Agency costs; Bankrupcy costs; Corporate finance; Disclosure; Fair value accounting; Financial distress; Financial instruments; Hedge accounting; Information assimetry; Market efficiency; Risk management
Ciencias sociales; Ciencias sociales / Economía
spellingShingle Accounting options; Agency costs; Bankrupcy costs; Corporate finance; Disclosure; Fair value accounting; Financial distress; Financial instruments; Hedge accounting; Information assimetry; Market efficiency; Risk management
Ciencias sociales; Ciencias sociales / Economía
Diez, Juan Francisco; Gutiérrez, Javier
Risk management: disclosure effects
description This thesis explores the effect of disclosure on risk management policies. Following recent theory on risk management, with market imperfections, risk management creates value by reducing the volatility of the cash flows. Those risk policies are conditioned by actual disclosure rules that reduce information asymmetry between managers and shareholders, providing a comprehensive view of the firm. However, disclosure gives different accounting choices, hence affecting the decision-making process of managers. The purpose of this thesis is to establish if managers adapt their actual risk policy to disclosure rules. Specifically, we discuss how managers make decisions regarding exchange rate risk in forecasted transactions. In addition, we discuss how hedging affects valuation by using an investor perspective. This is done through the analysis of the automotive industry in Sweden, Germany and France and the considerations of analysts and auditors. We found that risk management policies are affected by accounting rules and that analysts are aware of those effects but have problems to measure them. However, not enough evidence was found to prove that managers try to avoid the volatility the fair value option brings when hedging a forecasted flow.
format Trabajo de grado (Bachelor Thesis)
author Diez, Juan Francisco; Gutiérrez, Javier
author_facet Diez, Juan Francisco; Gutiérrez, Javier
author_sort Diez, Juan Francisco; Gutiérrez, Javier
title Risk management: disclosure effects
title_short Risk management: disclosure effects
title_full Risk management: disclosure effects
title_fullStr Risk management: disclosure effects
title_full_unstemmed Risk management: disclosure effects
title_sort risk management: disclosure effects
publishDate 2009
url http://babel.banrepcultural.org/cdm/ref/collection/p17054coll23/id/1
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score 11,577895