Accounting Choices: Public Versus Private Firms

Penno, Mark; Simon, Daniel T.

doi:10.1111/j.1468-5957.1986.tb00518.x

Cited by 77 publications

(58 citation statements)

References 10 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…For these reasons, accounting quality of pubic equity firms may be lower than that of private equity firms if earnings are managed with an eye to achieving higher stock prices. This "opportunistic behavior" hypothesis is supported by the findings of Beatty et al (2002) and the survey results of Penno and Simon (1986). 5 International evidence is consistent with insider access and high quality public financial reporting being substitutes for reducing information asymmetries.…”

supporting

confidence: 76%

“…Several studies such as Beatty et al (2002) and Penno and Simon (1986) explore how the ownership structure, public or private, influences the quality of accounting numbers. Because financial data of privately-owned firms is generally unavailable, these studies are restricted to regulated industries such as banking and insurance where financial reports of both public and private companies are filed with industry regulators.…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Does Public Ownership of Equity Improve Earnings Quality?

Givoly

Hayn

Katz

2010

The Accounting Review

259

162

View full text Add to dashboard Cite

To better understand how equity investors influence earnings quality, we compare the quality of accounting numbers produced by two types of public firms -those with publicly-traded equity and those with privately-held equity that are nonetheless considered public by virtue of having publicly-traded debt. We develop and test two hypotheses. The "demand" hypothesis holds that earnings of public equity firms are of higher quality than earnings of private equity firms due to the stronger demand by investors and creditors stemming from, among other concerns, higher litigation risk. The "opportunistic behavior" hypothesis posits that public equity firms have lower earnings quality than their private equity peers due to management intervention in the earnings process as a result of capital market considerations as well as their own equity-based compensation. We identify a number of attributes associated with the notion of earnings quality -persistence and estimation error of accruals, prevalence of earnings management, timeliness of loss versus gain recognition (conditional conservatism) and the extent of conservatism due to the use of asset-decreasing accounting principles (unconditional conservatism). The results indicate that, consistent with the "opportunistic behavior" hypothesis, private-equity firms have higher quality accruals and a lower propensity to manage income than public equity firms. However, in line with the "demand" hypothesis, public equity firms' financial reports are generally more conservative.

show abstract

supporting

confidence: 76%

Section: Introductionmentioning

confidence: 99%

Does Public Ownership of Equity Improve Earnings Quality?

Givoly

Hayn

Katz

2010

The Accounting Review

259

162

View full text Add to dashboard Cite

show abstract

“…Whereas, some of the studies find that the earnings quality of unlisted companies is low due to the lack of capital market pressures and institutional factors. It is also observed that demand factor and opportunistic factor are the explanations for low earnings quality (Penno et al, 1986;Ball & Shivakumar, 2005;Burgstahler et al, 2006;Hope et al, 2013). The listed companies report higher quality of earnings when there is demand for high quality of earnings from external stakeholders and report lower quality of earnings when they are opportunistic.…”

Section: Review Of Literature and Hypothesis Developmentmentioning

confidence: 91%

Applying Benford’s Law to Examine the Quality of Reported Income Numbers of Unlisted Firms

Kuntluru

Shette

Achalapathi

2015

IJEF

View full text Add to dashboard Cite

The present study makes an attempt to examine the quality of reported income numbers of unlisted firms in India. The Benford"s Law is applied to examine the digital occurrence of reported income numbers of unlisted firms. The analysis is based on 43,996 reported annual income numbers of 22,147 sample firms during the financial years from 2000-01 to 2011-12. Further, the results are analyzed under four different scenarios viz., ownership, size, age and nature of industry. The empirical results show that the observed proportionate occurrence of zero is significantly less than the expected proportionate occurrence. These results are contrary to the findings of the related studies of listed companies. The results indicate lower quality of reported income numbers of unlisted firms. Based on the scenario analysis, the empirical results indicate that the proportionate occurrence of second single digits of state-owned unlisted firms confirm the Benford"s Law. The present study contributes to the literature by examining the quality of reported income numbers of unlisted firms using the Benford"s Law.

show abstract

“…A dependência de mercados externos como fonte de financiamento também pode ser uma explicação para diferentes escolhas contábeis em companhias abertas e fechadas (PENNO; SIMON, 1986), principalmente pelo enfoque da relação recurso-dependência do 144 isomorfismo coercitivo. Guerreiro, Rodrigues e Craig (2012) afirmam que, embora o IFRS seja um padrão internacional, voltado principalmente para o atendimento das necessidades dos investidores, contextos institucionais podem influenciar a escolha por tal padrão, reforçando a ideia de que as escolhas organizacionais não são direcionadas apenas por racionalidade econômica.…”

unclassified

Escolhas Contábeis: reflexões para a pesquisa

Silva

Martins

Lemes

2016

R. Contemp. Contab.

View full text Add to dashboard Cite

Neste ensaio, é promovida uma discussão crítica a respeito das teorias e das principais obras que tratam do estudo das escolhas contábeis, com o objetivo de despertar provocações e reflexões para o desenvolvimento de pesquisas sobre esse tema. A literatura da área ofereceu contribuições ao longo dos anos, porém questões, como a existência de uma teoria consolidada das escolhas contábeis e os determinantes das múltiplas escolhas contábeis, ainda não estão claras. As principais contribuições deste estudo são: oferecer uma triangulação teórica com base em discussões fundamentadas sobre a Teoria Contratual da Firma, sobre as teorias econômicas que consubstanciam a chamada ‘Teoria Positiva da Contabilidade’ e sobre a Teoria Institucional; e propor reflexões para o estudo de múltiplos fatores determinantes e consequências econômicas das escolhas contábeis, empregando diferentes abordagens metodológicas. Acredita-se que as amarrações teóricas e hipotéticas (assim como suaslimitações) derivadas da interação entre as teorias aqui criticadas possam despertar a necessidade de reestruturações das pesquisas em escolhas contábeis, tanto em termos teóricos quanto metodológicos.

show abstract

Accounting Choices: Public Versus Private Firms

Cited by 77 publications

References 10 publications

Does Public Ownership of Equity Improve Earnings Quality?

Does Public Ownership of Equity Improve Earnings Quality?

Applying Benford’s Law to Examine the Quality of Reported Income Numbers of Unlisted Firms

Escolhas Contábeis: reflexões para a pesquisa

Contact Info

Product

Resources

About