Till Muenster

Hi, I'm Till Muenster.

I'm an Assistant Professor of Accounting at the University of Mannheim (Germany). I obtained my doctorate at the University of Münster (Germany).

My primary research interest lies at the intersection of financial accounting and taxation. I draw on data from financial statements and other corporate disclosures, capital markets, and labor-related sources to examine firms' reporting practices and their responses to accounting and tax regulation. I am also passionate about artificial intelligence and machine learning, both as a subject of study and as a methodological tool for my research. In teaching, I strive to spark students' enthusiasm for accounting and to convey its central role for organizations, the economy, and society.

Contact Details

University of Mannheim
Schloss, Ostflügel
D-68161 Mannheim
Germany

✉️ till.muenster@uni-mannheim.de

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Country-by-Country Disclosures and Firms' Internal Information Environments
with Christoph Watrin

Abstract

We examine the relationship between country-by-country disclosures and the internal information environments of multinational entities (MNEs). We argue that the introduction of U.S. country-by-country reporting (CbCR) increases affected firms’ need for effective internal information flows, as country-specific information is not readily available for disclosure. However, the disclosure mandate simultaneously adds complexity to firms’ reporting environments. Using a difference-in-differences design, we find that firms affected by U.S. CbCR make more efficient investment decisions, utilize existing resources more efficiently, and report fewer financial restatements than firms not affected by the mandate. These effects are concentrated in the first year following the introduction of U.S. CbCR. Our findings are robust across various placebo tests and alternative research designs. Supplemental regression discontinuity analyses reinforce our main results. Moreover, we find that improvements in internal information quality are concentrated in accounting items directly tied to U.S. CbCR, suggesting that firms improve information flows to meet the mandate’s specific disclosure requirements. Finally, we show that our findings depend on disclosure practices and organizational complexity prior to the mandate. Our results suggest that U.S. CbCR prompts MNEs to alter their internal information processing structures, improving financial reporting and operational efficiency.

Keywords: BEPS; country-by-country reporting; internal control systems; internal information flows; investment efficiency; regulation; resource utilization; restatements; tax transparency

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