The relationship between cash value and accounting conservatism: The role of controlling shareholders

2018 ◽  
Vol 55 ◽  
pp. 233-245 ◽  
Author(s):  
Cho-Min Lin ◽  
Min-Lee Chan ◽  
I-Hsin Chien ◽  
Kuan-Hua Li
Keyword(s):  
Accounting Conservatism ◽  
Controlling Shareholders ◽  
The Relationship

scholarly journals Earning Management and the Role of Accounting Conservatism at Firm Level

2016 ◽  
Vol 8 (2) ◽  
pp. 197 ◽  
Author(s):  
Abdul Haque ◽  
Azhar Mughal ◽  
Zohaib Zahid
Keyword(s):  
Financial Reporting ◽  
Research Study ◽  
Accounting Conservatism ◽  
Earning Management ◽  
Firm Level ◽  
Conservative Group ◽  
Reporting Practices ◽  
High Earning ◽  
The Relationship

<p>Accounting conservatism and earning management are very much pervasive in financial reporting practices. Therefore, this research study aims to investigate the relationship between accounting conservatism and earning management by using a sample of 317 non-financial Pakistani firms consisting of 4204 firm-years over the period 1999-2013. Conservatism at the firm level is estimated by using the C-Score measure and earning management is observed by calculating discretionary accruals. The estimated results show that one fourth (86 firms) of the sample is highly conservative; out of these 76% (65 firms) showed least earning management (Earning management&lt;Q<sub>1</sub>) while 24% (21 firms) showed moderate earning management (Q<sub>1</sub>&lt;Earning management&lt;Q<sub>3</sub>). On the other hand, in the least conservative group, 71% (57 firms) showed high earning management (Earning management &gt; Q<sub>3</sub>) and 29% (23 firms) showed earning management at a moderate level (Q<sub>1</sub>&lt;Earning management&lt;Q<sub>3</sub>). Thus the findings of the study reveal a negative association between accounting conservatism and earning management.</p>

scholarly journals The role of institutional shareholders in the relationship between unconditional conservatism and earnings management

2021 ◽  
Vol 19 (1) ◽  
pp. 94-104
Author(s):  
Raffaela Casciello ◽  
Marco Maffei ◽  
Fiorenza Meucci
Keyword(s):  
Earnings Management ◽  
Institutional Ownership ◽  
Previous Literature ◽  
Accounting Conservatism ◽  
Real Earnings Management ◽  
Conditional Conservatism ◽  
Institutional Shareholders ◽  
The Impact ◽  
The Relationship

This study investigates whether and how institutional shareholders affect the relation between unconditional conservatism and earnings management. We analyze the relation between unconditional conservatism and accrual-based earnings management and the relation between unconditional conservatism and real earnings management, focusing on the role of the institutional shareholders variable in these two relations. First, we find evidence of positive (negative) relations between unconditional conservatism and accrual-based (real) earnings management. Second, we demonstrate that the presence of institutional shareholders has a mitigating (amplifying) impact on the relation between unconditional conservatism and accrual-based (real) earnings management. This study contributes to enrich the previous literature in two ways. First, it extends the strand of research on the relation between accounting conservatism and earnings management (Garcìa Lara, García Osma, & Penalva, 2020; Chen, Hemmer, & Zhang, 2007; Gao, 2013), focusing on unconditional conservatism since it is less prevalent than conditional conservatism in previous literature (Ruch & Taylor, 2015). Second, it extends the strand of research on the impact of institutional ownership on accounting practices (Farooq & El Jai, 2012; Sakaki, Jackson, & Jory, 2017), highlighting the role of the institutional shareholders in the relation between unconditional conservatism and earnings management

scholarly journals The Moderating Effect of the Presence of Female Executives on the Relationship Between Accounting Conservatism and Cash Holdings

2021 ◽  
Vol 11 (3) ◽  
pp. 38
Author(s):  
Souad Chaieb
Keyword(s):  
Cash Holdings ◽  
Moderating Effect ◽  
Accounting Conservatism ◽  
Women Directors ◽  
Female Executives ◽  
Female Administrators ◽  
The Relationship

This paper aims to providing evidence for a relationship that could be established between accounting conservatism and cash holdings and to integrating the moderating effect of the presence of women directors on this relationship. The study was carried out on a sample of 100 French companies listed in the SBF120 index over a 5 year period. In general, the results show that the effect of accounting conservatism on the holding of liquidity is positive and significant and that the role of female administrators reinforces this relationship.

scholarly journals Accounting Conservatism, Information Asymmetry and Cash Holdings

2021 ◽  
Vol 28 (1) ◽  
pp. 63
Author(s):  
Walid Shehata ◽  
Ahmed Rashed
Keyword(s):  
Information Asymmetry ◽  
Cash Holdings ◽  
Accounting Conservatism ◽  
Mediating Effect ◽  
Cash Holding ◽  
The Relationship ◽  
Role Of Information

This paper focuses on explore the association between accounting conservatism and cash holding through a mediating effect of information asymmetry (IA) for Egyptian firms listed in EGX 100 within the period between 2013 -2018 through 124 firms with 703 firm-observations. The results indicates that (1) conservatism doesn’t have an enormous effect on information asymmetry, (2) information asymmetry doesn’t have a serious effect on cash holding, (3) there’s not any mediation role of information asymmetry within the relationship between conservatism and cash, (4) conservatism effect a negatively on cash holding

Ownership structure and R&D investment: the role of identity and contestability in Spanish listed firms

2020 ◽  
Vol 33 (3/4) ◽  
pp. 405-426
Author(s):  
Laura García-García ◽  
Macarena Gonzalo Alonso-Buenaposada ◽  
M. Elena Romero-Merino ◽  
Marcos Santamaria-Mariscal
Keyword(s):  
Ownership Structure ◽  
Family Firms ◽  
Institutional Investor ◽  
Content Type ◽  
Controlling Shareholders ◽  
Listed Firms ◽  
Low Levels ◽  
The Relationship ◽  
D Investment

PurposeThe purpose of this paper is to analyze the relationship between the ownership structure and the investment in research and development (R&D) for a sample of listed Spanish companies.Design/methodology/approachFollowing the agency theory and the socioemotional wealth (SEW) perspective, the authors propose that R&D investment is affected by ownership structure, specifically by the identity of the controlling owner (family firms and firms with an institutional investor) and the level of contestability by other shareholders. In order to test these hypotheses, the authors build an original database identifying, at a 10% threshold, the ultimate shareholders of a sample of 96 Spanish firms listed during 2008–2018 (1,002 obs).FindingsThe results show that there is no significant relationship between the ownership concentration and the R&D investment. Only when the authors consider the nature of the main shareholder, the authors find that in family firms there is an inverted U relationship between ownership and R&D, so that at low levels of ownership, the R&D increases, while at high levels of ownership (that we compute around 54%) the R&D decreases. Also, when the main shareholder is an institutional investor, the greater its ownership, the higher the R&D investment. Finally, the authors test that, contrary to what mainstream suggests, contestability in family firms is higher when ownership in the hands of other family shareholders increases.Originality/valueThe work uses an original database to test a nonlinear relationship between ownership and R&D investment in family firms. Also, the study addresses a topic hardly ever discussed in the literature about R&D as it is the role of the contestability by other controlling shareholders.

Research on the Relationship between Controlling Shareholder and Accounting Conservatism in China

2011 ◽  
Vol 65 ◽  
pp. 579-584 ◽  
Author(s):  
Ya Ling Wu
Keyword(s):  
Accounting Conservatism ◽  
Stock Exchanges ◽  
Controlling Shareholder ◽  
Controlling Shareholders ◽  
Listed Firms ◽  
Business Transactions ◽  
Growth Opportunity ◽  
Negative Effect ◽  
Aggressive Accounting ◽  
The Relationship

In this paper, we examined the relationship between controlling shareholders and accounting conservatism in China. Using 5762 firm-years data about listed firms in China stock exchanges from 2001 to 2005, we find that the percentage of the largest shareholder ownership has significantly negative effect on accounting conservatism. After controlled by size, leverage and growth opportunity, the result is still robust. We thus provide evidence of an entrenchment effect, where the largest shareholder may influence firms to adopt aggressive accounting policies that reflect the wishes of the largest shareholder rather than reflect the economic substance of the business transactions.

scholarly journals Relationship Between Accounting Conservatism and Investment Efficiency with the Moderating Role of IFRS Adoption in Pakistan

2020 ◽  
Vol 6 (4) ◽  
pp. 1139-1150
Author(s):  
Khalid Latif ◽  
Ghulam Mujtaba Chaudhary ◽  
Aon Waqas
Keyword(s):  
Stock Exchange ◽  
Accounting Conservatism ◽  
Policy Implications ◽  
Investment Efficiency ◽  
Return On Assets ◽  
Ifrs Adoption ◽  
Mandatory Adoption ◽  
The Relationship ◽  
Moderating Role

ABSTRACT This study investigated the mandatory role of IFRS adoption in the association of accounting conservatism and investment efficiency in Pakistan. The study applied the model of Basu's (1997) to measure the conditional accounting conservatism for timely recognition of expected loss and gain. For empirical analysis, the study took a sample of 165 firms listed at Pakistan Stock Exchange and employed panel data methodology over the data of 2008-2017. Firms size, leverage, return on assets, and growth are taken as control variables to assess the relationship between accounting conservatism and investment efficiency. Findings of the study revealed that conditional accounting conservatism significantly affected the firms’ investment efficiency with the mandatory adoption of IFRS in Pakistan. IFRS adoption enhanced the firms’ investment efficiency and motivated to adopt the principle of accounting conservatism for recognizing the expected losses in timely manner in order to achieve investment efficiency. Timely recognition of expected losses played an important role in reducing agency problems and asymmetric information. In Pakistani setting, it is the pioneer study which highlighted the importance of accounting conservatism in protecting the surplus resources of investors and enhancing the overall investment efficiency under mandatory adoption of IFRS. These findings offer policy implications for focusing on the adaptation of IFRS in Pakistan.

Choosing a Markov blanket

2020 ◽  
Vol 43 ◽  
Author(s):  
Thomas Parr
Keyword(s):  
Markov Blanket ◽  
Target Article ◽  
The Relationship

Abstract This commentary focuses upon the relationship between two themes in the target article: the ways in which a Markov blanket may be defined and the role of precision and salience in mediating the interactions between what is internal and external to a system. These each rest upon the different perspectives we might take while “choosing” a Markov blanket.

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