This study examines discretionary segment reshuffling, that is firms altering the internal composition of reportable segments without changing their number or labels. Using a novel method that detects inconsistencies in comparative segment data, we identify 322 reshuffling events (2%) among 15,441 firm-year observations from 2001 to 2023, classifying them as explained (70%) or unexplained (30%) based on qualitative disclosures in the notes to financial statements. We find reshuffling is more likely among larger firms, with lower financial performance, greater obfuscation opportunities, and more opaque information environments. We further show that disclosure is selective. Conditional on reshuffling, firms are less likely to explain segment expense reshuffling, while more material reshufflings are more likely explained. Explanations are also more common when firms have stronger financial performance and greater organizational flux. Overall, our findings highlight the discretionary nature of segment reshuffling and the uneven transparency of segment disclosures under the management approach.

Professor Andrei Filip
IÉSEG School of Management (France) | Google Scholar profile 

Andrei Filip is a Professor of Financial Reporting at IÉSEG School of Management. Holding a PhD in International Accounting from the University of Geneva, his main research interests are institutional settings and financial reporting quality, with a recognised expertise in international accounting and the application of IFRS standards. Before joining IÉSEG, Professor Filip taught financial accounting in Romania (ASE Bucharest), Switzerland (HEC Geneva), Canada (HEC Montréal) and France (ESSEC Business School), where he headed the Accounting and Management Control department (2016–2019). He has worked on projects with both the IASB and ANC (France's standard setting body), and has been closely involved with the IAAER in building research and teaching capacities in transition economies. Professor Filip's research has been published in leading journals including Contemporary Accounting Research, Journal of Corporate Finance, Journal of Business Finance and Accounting, and European Accounting Review. He served as Editor-in-Chief of Accounting in Europe (2022–2025), a journal of the European Accounting Association, and is an editorial board member of several journals.

Source: Adapted from https://www.ieseg.fr/en/faculty-and-research/professor/?id=42640090 and author-provided biography