This course builds on the foundation provided in Business in Global Markets I and advances students’ knowledge on the role of accounting in global business. The course is a mixture of theoretical input and case studies and will teach students how to approach, analyse and solve problems in this context.

In this course we will focus on transparency and disclosure of multinational groups on their core business activities, and the effects of such disclosure, including: 

• Financial Disclosure: This session explores the role of financial disclosures and accounting standards in capital markets, beginning with the importance of information like financial statements and earnings reports in guiding investors’ decision-making. We’ll cover key concepts such as information asymmetry and theories like the Efficient Market Hypothesis to understand how markets react to disclosures and review evidence on how such announcements drive price adjustments.
• Pay Transparancy and Pay Equity: Compensation is a fundamental aspect of management accounting, designed to attract, motivate, and retain employees at all hierarchical levels within an organization. In particular, pay transparency and pay equity have garnered significant public attention following the introduction of the EU Pay Transparency Directive. We will explore compensation from an economic perspective, while also considering the implications of recent developments in this area.
• Auditor Reporting: This session delves into the critical role of the auditor's report in enhancing the transparency and reliability of financial statements for publicly listed companies. We will examine the key components of the auditor's report, including the auditor's opinion, basis for opinion, and any key audit matters that are communicated. Furthermore, we will discuss recent developments in auditing standards within the EU, such as the EU Audit Directive and Regulation, and address challenges related to audit quality, independence, and the expectation gap between auditors and stakeholders.
• Sustainability Disclosure: Sustainability-related topics (e.g., climate change, human rights in companies' supply chains) have become increasingly important. Likewise, transparency about corporate sustainability has received great attention due to recent EU legislation such as the Taxonomy Regulation and the Corporate Sustainability Reporting Directive (CSRD), which introduced mandatory European Sustainability Reporting Standards (ESRS). We will explore the challenges that multinationals face under current EU sustainability disclosure requirements.
• Interconnectivity of Financial and Non-Financial Information: This session examines how the integration of financial and non-financial disclosures enhances transparency for investors and other stakeholders. We will explore the new types of information that addressees can use to analyze business practices in more detail. Furthermore, we will show how digitalization is impacting reporting practices.
• Tax Disclosure: Multinational entities have to disclose detailed, country-specific information on their business and the respective tax burden. We will discuss the content of country-by-country disclosure and tax strategy reports, and their effect on tax avoidance activities of multinationals.

Students are expected to participate actively in class. Therefore, attendance of at least 70% of classes is required in order to be able to pass the course. In case of illness/injury preventing a student from taking the final exam, a medical certificate is required as documentary evidence.

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