eThesis - School of Business electronic theses

Objectives of the study The main objective of this study is to examine the disclosure quality of goodwill impairment test of Finnish companies. The further study is done aiming to find out what are the characteristics of the firm that are related to the disclosure quality of the firm.

Research method and data The research method used to examine the disclosure quality is to build a disclosure compliance index which contains 9 checklist items based on IAS 36. By assigning a score for each item, a total score ranging from 0 to 9 indicates the disclosure quality of a company. Regression models are employed to examine the firm factors that are related to the disclosure compliance level.

Finding of the study There are different disclosure compliance levels among Finnish companies. Specifically, the disclosure for the information that the key assumptions based on has the lowest compliance level. The further research results shows that company's disclosure compliance level is positively related when the company used one of the ''big 4'' auditing firms for their financial statements auditing. And the goodwill intensity is also positively related to a company's compliance level when considering the industry category that the company belongs to, but when the industry factor is ignored, the relation on longer exists. However, there is not a significant relation between a company's goodwill impairment test disclosure compliance level and the company size, the profitability, the goodwill impairment test result, the company's corporate governance or the industry category the company belongs to.