Title: Disclosure quality of goodwill impairment testing: evidence from Turkey

Authors: Caner Akbaba; Cemal İbiş; Serhat Yanık; Yusuf Aytürk

Addresses: Faculty of Economics and Administrative Sciences, Muğla Sıtkı Koçman University, 48000, Mugla, Turkey ' School of Business, Altınbaş University, Gayrettepe Social Sciences Campus, Istanbul, Turkey ' Faculty of Political Sciences, Istanbul University, Beyazit Main Campus, Istanbul, Turkey ' Faculty of Political Sciences, Istanbul University, Beyazit Main Campus, Istanbul, Turkey

Abstract: Goodwill-related disclosure quality is an emerging research question that needs to be investigated. In practice, audit firms control the disclosures in financial reports by using a checklist that results in a boilerplate reporting format of insufficient information. This study examines possible determinants of goodwill-related disclosure quality in Turkey. We use a unique hand-collected panel dataset of listed Turkish non-financial companies for the period between 2014 and 2018 and calculate a disclosure index. Our results show that firm-specific variables of size, ownership structure, and level of debt are related to disclosure quality of goodwill impairment testing and the magnitude of the goodwill reported is positively linked to disclosure quality. More important, our results indicate that auditor size improves the disclosure quality and boilerplate goodwill-related disclosures are prevalent among Turkish public companies.

Keywords: goodwill impairment; disclosure quality; auditor size; Turkey.

DOI: 10.1504/IJMFA.2023.127527

International Journal of Managerial and Financial Accounting, 2023 Vol.15 No.1, pp.88 - 111

Received: 07 Aug 2021
Accepted: 05 Apr 2022
Published online: 07 Dec 2022 *