September 2020: Prof. Dr. Sönke Sievers

Sönke Sievers, Professor for International Accounting at Paderborn University, is principal investigator of the project B05 “Transparency and the Equity Market”. In his project he examines how financial reporting transparency affects the information asymmetry on equity markets. In project C03, he is committed to effective science communication.


At the intersection: finance and accounting

Originally, I come from the field of corporate finance. At least that’s where it all started for me. Company valuations in particular aroused my interest early on. Assessing how much a company is worth on the basis of all available information intrigued me. In the course of my doctorate, I realized quite quickly that accounting information facilitated my research in finance. In order to be able to forecast how a company will behave in the future, it is important to understand and use the detailed information from financial statements (e.g. balance sheets and profit and loss accounts). Or, put differently, accounting information is very often the core information set of a business that is needed to empirically investigate research questions in applied economics (e.g. accounting and finance). For this reason, I have been working at the intersection between finance and accounting for about 15 years. A conscious decision I would definitely make again.


TRR 266: broad exchange, new chances

Precisely because I am highly interested in interdisciplinary research, the TRR 266 offers me a perfect environment. Within our research network I can exchange ideas with leading researchers from all over Germany – with theoreticians and other empiricists, with other accounting specialists and tax experts. This broad mix makes it possible to develop and work on highly interesting issues that might otherwise never have arisen. I consider this a great opportunity. For me personally, but also for transparency research – and for practice, which can benefit from the findings of our research.

Contrary to what is widely assumed, even too much transparency can ruin a lot.

Effective transparency regulation

The example of the Samwer brothers shows once again how important effective transparency regulation is. Almost six years after going public, the brothers intend to delist the MDax company Rocket Internet from the equity market. One of the reasons stated in the press: they increasingly perceived the transparency obligations as a burden. Investors – especially those from the start of the stock listing – are now likely to suffer losses due to the history of the stock price development. This shows how important it is to find the right balance – between too little and too much information. Contrary to what is widely assumed, even too much transparency can ruin a lot. For example, due to high production costs within the firms or the loss of a company’s competitive edge if it discloses too much information. It is therefore extremely important for regulators to know how much transparency makes sense and when it becomes a problem. With our work within the TRR 266 we can make an important contribution regarding these issues.

We provide empirical evidence of what shareholders pay attention to and what information they need for their investment decisions. As a result, we are
able to give regulators concrete advice.

Everlasting challenge: research on intangible assets

In project B05 we investigate the impact of financial reporting transparency on the equity market, in particular certain sub-components of annual financial statements. For example, one of the studies we are currently working on investigates intangible asset accounting and its impact on the equity investor. Intangible assets include, for example, the number of patents, acquired know-how or customer lists. They have been a continuous challenge of accounting for decades. They are extremely difficult to grasp, this therefore makes it complicated to recognize them on balance sheets. How much are customer relationships actually worth? Should marketing measures be listed as assets on the balance sheet? Or should they be written off as expenses, since their effect fizzles out immediately?

At present, this challenge is solved by – roughly speaking – identifying and valuing the individual intangible asset items separately in the case of a company takeover and lumping the remaining intangible assets in a summary item, the so-called goodwill.  But what this means for the decision-making of shareholders has not yet been sufficiently empirically investigated. Currently, a change in regulation is being considered again. But, actually discussed proposals are based on little evidence so far. With our study we try to fill this gap. We provide empirical evidence of what shareholders pay attention to and what information they need for their investment decisions. As a result, we are able to give regulators concrete advice. Our results provide guidance, which intangible assets should be shown separately on the balance sheet – and which assets can be combined into goodwill because they seem to be not relevant to shareholders.

Our B05 research can provide empirical evidence in current discussions.

Empirical evidence in current discussions

Together with Per Olsson, I am currently investigating the role accounting information can play in assessing risks for equity investors. As accounting information reflects the past, many people assume that it is not really suitable for modelling risks. But our research shows that the opposite is true. If accounting information is understood and modelled correctly, it can actually help to assess risks. So, our B05 research can provide empirical evidence in current discussions. This is one of our primary tasks as researchers, which is extremely important to me. I also attach great importance to ensuring that my research is theoretically sound and empirically up to date. I am always looking for the method that can answer my question most accurately and reliably.

But we must not negate complexity – we must succeed in making it consumable.

Science communication against fake news

I consider science communication a central task that is becoming increasingly important. Especially in a time where fake news and filter bubbles threaten our knowledge-based society. Researchers need to counter this trend. That is why it is important to me to make an active contribution to the subproject C03 as well. The project helps us understand how we can reach people with our research. And how scientifically sound findings can oppose populism. A great challenge! After all, we are moving in a tense relationship that has to be precisely balanced. Complex scientific contexts have to be edited so they can also be understood by a lay audience. But we must not negate complexity – we must succeed in making it consumable.



The article reflects the opinion of the researcher and not necessarily the views of the TRR 266. As a scientific association, the TRR 266 is committed to both freedom of speech and political neutrality.

Researcher of the Month August

Participating Institutions

TRR 266‘s main locations are Paderborn University (Coordinating University), HU Berlin, and University of Mannheim. All three locations have been centers for accounting and tax research for many years. They are joined by researchers from LMU Munich, Frankfurt School of Finance and Management, Goethe University Frankfurt, WHU – Otto Beisheim School of Management and University of Cologne who share the same research agenda.

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