We examine the association between accounting conservatism, expressed in form of asymmetric timeliness recognition economic gains and losses, corporate social responsibility (CSR). provide evidence that, under unfavorable macroeconomic conditions financial constraints, as well increased levels outside pressure from debtholders equity holders, catering for capital providers through conservative ...

The principle of conservatism is the prudence against an uncertain situation to avoid excessive optimism from management and company owners. Consequently, if there a condition that likely cause loss, expense or debt, cost debt must be recognized immediately. variables used in this study include Institutional Ownership, Managerial Leverage, Profitability Accounting Conservatism. This research qu...

Information asymmetry is a negative event that gives manager incentives to use his private information to attempt transferring wealth from investors by overstating financial performance and consequently, stock prices during his tenure at the firm. The manipulations generate agency costs. Conservative reporting is a mechanism that reduces the managers’ ability to manipulate and overstate financi...

information asymmetry is a negative event that gives manager incentives to use his private information to attempt transferring wealth from investors by overstating financial performance and consequently, stock prices during his tenure at the firm. the manipulations generate agency costs. conservative reporting is a mechanism that reduces the managers’ ability to manipulate and overstate financi...

It is expected that more accounting conservation (environmental uncertainty) reduces manager optimism. Prior research, however, has struggled to establish this relation empirically. Moreover, some evidence points to the possibility that the manager optimism is lower for firms with more accounting conservation. In this paper, the author examine the link between accounting conservation, environme...

Recent studies show that regression-based estimates of accounting conservatism reflect both differences in the asymmetric recognition of bad news and differences in asset composition. In particular, a firm’s market value and returns reflect both assetsin-place and expected future rents, while book values tend to reflect only assets-in-place. We propose two tests that remove the effect of asset ...

We examine a firm’s P/E ratio in the context of a model wherein firms make sequential investments in production capacity. In addition to investment growth, our analysis seeks to identify pricing power in the firm’s product markets and accounting conservatism as determinants of the P/E ratio. A benchmark result demonstrates that, given unbiased accounting, the firm’s P/E ratio can be expressed a...

We examine the effect of lending banks’ board representation (affiliated banker on board, or AFB) on conservative accounting. We argue that private information obtained through board representation enhances the monitoring and the influence of lenders and therefore reduces their demand for conservatism-facilitated debt contracting. Consistent with our hypothesis, we find that conservatism is mar...