An International Meeting of the American Accounting Association American Accounting Association 2006 Annual Meeting August 6–9, 2006 Washington, D.C.

Jan M Smolarski
Stockholm University

Neil Wilner
University of North Texas

Abstract: This study examines the use of financial information and the choice of valuation method in the pre-investment process among European and Indian private equity funds. We analyze differences in the choice of valuation methods and in the use of financial information in venture capital and buy-out funds and in three country groupings: the UK, the Pan-Europe and India. The results show that the use of valuation models is relatively homogeneous across countries although the use of financial information appears to be driven by structural differences among countries, fund type, asymmetrical information issues and differences in legal systems. The use of audited financial statements appears to increase as firms mature.

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