Effects of Corporate Governance and Managerial Optimism on Accounting Conservatism and Manipulation

2013 ◽  
Author(s):  
Judson Caskey ◽  
Volker Laux
Keyword(s):  
Corporate Governance ◽  
Accounting Conservatism ◽  
Managerial Optimism

PENGARUH KONSERVATISMA AKUNTANSI TERHADAP EARNINGS RESPONSE COEFFICIENT (ERC) DENGAN CORPORATE GOVERNANCE SEBAGAI VARIABEL PEMODERASI

2008 ◽  
Author(s):  
Olliza Mayesti ◽  
Resti Yulistia Muslim
Keyword(s):  
Corporate Governance ◽  
Stock Exchange ◽  
Negative Influence ◽  
Accounting Conservatism ◽  
Managerial Ownership ◽  
Net Income ◽  
Manufacturing Companies ◽  
Earnings Response Coefficient ◽  
Response Coefficient ◽  
Earnings Response

The objective of this study is to examine whether corporate governance influence the relation between accounting conservatism and Earnings Response Coefficient (ERC). The accounting conservatism proxy used in this research is accruals obtained from differences between net income and cash flow. Sample consists of 31 manufacturing companies that listed in Indonesian Stock Exchange since 2003­2006. Hypotheses are examined by using multiple regressions. The result shows that there is a negative influence of accounting conservatism to Earnings Response Coefficient. Managerial ownership as a moderating variable did not affect the relation between accounting conservatism and Earnings Response Coefficient, but independent board of commissioner composition as a moderating variable affected the relation between accounting conservatism and Earnings Response Coefficient.

Can Corporate Governance Affect Managerial Optimism?

2012 ◽  
Author(s):  
Ezzeddine Ben Mohamed ◽  
Abdelfatteh Bouri ◽  
Richard J. Fairchild
Keyword(s):  
Corporate Governance ◽  
Managerial Optimism

Conditional Conservatism and Audit Fees

2014 ◽  
Vol 29 (1) ◽  
pp. 83-113 ◽  
Author(s):  
Hye Seung (Grace) Lee ◽  
Xu Li ◽  
Heibatollah Sami
Keyword(s):  
Corporate Governance ◽  
Potential Benefit ◽  
Audit Fees ◽  
Accounting Conservatism ◽  
Audit Risk ◽  
Debt Contracting ◽  
Conditional Conservatism ◽  
Governance Quality ◽  
Corporate Governance Quality ◽  
The Impact

SYNOPSIS In this study, we examine the impact of conditional conservatism on audit fees and, more importantly, the influence of corporate governance on this relationship. Prior literature presents evidence regarding explanations for the existence and pervasiveness of accounting conservatism such as compensation and debt contracting, shareholder litigation, taxation, and accounting regulation. However, there is very limited evidence or discussion of the potential benefit of accounting conservatism on audit risk and thus audit fees, and how the potential benefit can be attenuated by corporate governance quality. Using a sample of firm-year observations over the period of 2004–2009, we provide evidence consistent with conditional conservatism and firms' commitment to such conservatism reducing their audit fees. However, our evidence shows that this reduction in audit fees is moderated by higher corporate governance quality. These results have implications for auditors, regulators, standard setters, and firms' managers. In addition, our study extends the literature on the determinants of audit fees. JEL Classifications: M41; M42; D81; D22.

Accounting conservatism, corporate governance and political connections

2017 ◽  
Vol 25 (2) ◽  
pp. 288-318 ◽  
Author(s):  
Nor Farizal Mohammed ◽  
Kamran Ahmed ◽  
Xu-Dong Ji
Keyword(s):  
Corporate Governance ◽  
Emerging Market ◽  
Political Influence ◽  
Ordinary Least Squares ◽  
Accounting Conservatism ◽  
Political Connections ◽  
Board Independence ◽  
Political Connection ◽  
Content Type ◽  
The Relationship

Purpose The purpose of this paper is to examine the relationship between accounting conservatism, corporate governance and political connection in listed firms in Malaysia where political influence plays a significant role in the capital market and in many business dealings. Design/methodology/approach By utilizing 824 firm-year observations comprising large listed companies over a period of four years from 2004, this study uses ordinary least squares regression models to investigate the relationship between accounting conservatism, corporate governance and political connections in Malaysia. Multiple measures of conservatism developed by Basu (1997) and Khan and Watts (2009) are employed. Findings The results show evidence of accounting conservatism (bad news being recognized earlier than good news) in Malaysia. Further, the results reveal that better corporate governance structure in terms of board independence is positively associated with accounting conservatism while management ownership is negatively associated with it. However, political connection has a negative moderating effect on the positive relationship between accounting conservatism and board independence. The results also suggest political connections have a positive association with firm’s future performance. Originality/value This study is the first in investigating the effect of political connections on accounting conservatism in Malaysian context and how political connections negatively affect the monitoring role of the corporate boards. By directly measuring political connection and controlling for various corporate governance mechanisms and firm-specific attributes, this study contributes to enhance the authors’ understanding of the political influence in financial reporting quality and firm performance in an emerging market setting.

Corporate Governance and Accounting Conservatism: Evidence from the Banking Industry

2013 ◽  
Vol 21 (3) ◽  
pp. 264-286 ◽  
Author(s):  
Stergios Leventis ◽  
Panagiotis Dimitropoulos ◽  
Stephen Owusu-Ansah
Keyword(s):  
Corporate Governance ◽  
Banking Industry ◽  
Accounting Conservatism

scholarly journals INFLUENCE OF AUDITOR INDEPENDENCE AND GOOD CORPORATE GOVERNANCE TOWARD ACCOUNTING CONSERVATISM IN INDONESIA

2019 ◽  
Vol 1 (1) ◽  
pp. 20-29
Author(s):  
Dovi Septiari ◽  
Wirdani Atika Sari
Keyword(s):  
Corporate Governance ◽  
Internal Control ◽  
Stock Exchange ◽  
Sample Selection ◽  
Financial Statements ◽  
Auditor Independence ◽  
Accounting Conservatism ◽  
Managerial Ownership ◽  
Good Corporate Governance ◽  
Internal Control System

Accounting conservatism is the precautionary principle to the profit recognition and one of the corporate governance to reduce the ability of the manager in manipulate and exaggerating the financial statements. Corporate governance is a internal control system which has its business objectives through securing company’s assets. This research is aiming to see the correlation among auditor independence and good corporate governance in accounting conservatism. Characteristics of good corporate governance in this are managerial ownership, profitability, company size and leverage. This research uses two measurements of conservatism non operating accrual and market to book ratio. This research as carried out at manufacture company in the Indonesia Stock Exchange in 2010-2014. Sample selection do by purposive sampling method and obtained 49 companies in criteria accordingly. This research used data analysis and multiple liniear regression program eviews 9. The result showed that the effect of auditor independence is not significant in accounting conservatism in indonesia. Good corporate governance influential only the size of the company and ownership. The measurement of non operating accrual and market to book ratio show different results. Further research is expected to use another proxy for other variables to measure accounting conservatism.

scholarly journals Business Strategy, Accounting Conservatism and Performance

2020 ◽  
Vol 9 (2) ◽  
pp. 23
Author(s):  
Han Li
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Internal Control ◽  
Business Strategy ◽  
Joint Effect ◽  
Accounting Conservatism ◽  
Governance Mechanism ◽  
Negative Effect ◽  
Corporate Governance Mechanism ◽  
And Performance

This research consists with prior business strategy typology and accounting conservatism theories. It investigates the joint effect of business strategy and accounting conservatism on the firm’s financial performance. The paper finds that accounting conservatism as a prudent accounting reporting principle plays an important corporate governance mechanism. The conservatism can mitigate the negative effect of the aggressive business strategy. The joint effect between business strategy and accounting conservatism is positively related with financial performance. The result is robustness when the different measurements of the strategy and the conservatism are applied. When the firm has weak internal control quality, the joint effect on financial performance also exists significantly.

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