Conditional accounting conservatism and future negative surprises: An empirical investigation

Kim, Bong Hwan; Pevzner, Mikhail

doi:10.1016/j.jaccpubpol.2010.03.003

Cited by 46 publications

(50 citation statements)

References 55 publications

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“…However, IPO companies associated with conservative earnings management are more likely to be merged or acquired and earn positive abnormal returns. Indeed, Kim and Pevzner (2010) find that conservatism is associated with lower probability of future bad news.…”

Section: Earnings Management and Delisting Risk Of Iposmentioning

confidence: 94%

Earnings management and performance of French IPO companies

Djerbi¹,

Jarboui²

2013

J. Account. Taxation

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In this paper, we examine the impact of discretionary current accruals on the performance of French IPO companies. We first note income-increasing earnings management in the first year as a public company and not in the year before the IPO (Initial Public Offerings). Based on a sample of 139 French IPOs over the period 1999 to 2007, including 38 failures, we also document that companies associated with aggressive earnings management in the IPO process, tend to suffer from subsequently poor returns and to delist for performance failure after IPO. However, we find no evidence to suggest that the level of initial return is negatively related to discretionary current accruals.

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Section: Earnings Management and Delisting Risk Of Iposmentioning

confidence: 94%

Earnings management and performance of French IPO companies

Djerbi¹,

Jarboui²

2013

J. Account. Taxation

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“…In particular, accounting conservatism leads to contracting benefits for borrowers in the form of lower interest rates (Zhang, 2008) and firms that institute higher standards of corporate governance have exhibited higher levels of accounting conservatism (García Lara et al, 2009). Moreover, Kim and Pevzner (2010) find a reduction in future bad earnings news for firms with conservative accounting practices. Chung and Wynn (2008) find that directors' and officers' liability insurance coverage and cash indemnification for Canadian firms reduces expected legal liability, causing a decrease in conservative earnings.…”

Section: Introductionmentioning

confidence: 92%

Conservatism, SEC investigation, and fraud

Alam

Petruska

2012

Journal of Accounting and Public Policy

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“…Accounting conservatism mitigates the information asymmetry between informed and uninformed equity investors (Kim and Pevzner 2010;LaFond and Watts 2008) and helps monitor managers' behavior. By requiring higher verification standards for gains recognition, accounting conservatism reduces managers' ability and incentives to withhold information on expected losses, inflate earnings, or overstate net assets (Ahmed et al 2002;Holthausen and Watts 2001;Watts 2003;Watts and Zimmerman 1986).…”

Section: Accounting Conservatism Literaturementioning

confidence: 99%

CEO Gender, Ethical Leadership, and Accounting Conservatism

et al. 2014

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Because male CEOs dominate corporate leadership, the literature on top management decision-making suffers from an implicit masculine bias. Although research indicates that males and females are biologically and psychologically different, the leadership characteristics of female CEOs are largely unexplored. Two of these characteristics, risk aversion and ethical sensitivity, are tied to key accounting issues, such as conservatism in financial reporting and steadfast opposition to fraud. In this study, we examine the relationship between CEO gender and accounting conservatism, and find a positive association between the two. Consistent with conventional wisdom, this association appears to be stronger in firms with high rather than low litigation and takeover risks. This study contributes to the ethics literature by highlighting the benefits of gender diversity in upholding the integrity of financial reporting.

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Conditional accounting conservatism and future negative surprises: An empirical investigation

Cited by 46 publications

References 55 publications

Earnings management and performance of French IPO companies

Earnings management and performance of French IPO companies

Conservatism, SEC investigation, and fraud

CEO Gender, Ethical Leadership, and Accounting Conservatism

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