The Impact of Non-Financial Stakeholders on Accounting Conservatism: The Case of Labor Unions

Farber, David; Hsieh, Hsin-Yi; Jung, Boochun; Han, Yi

doi:10.2139/ssrn.2001940

Cited by 5 publications

(5 citation statements)

References 90 publications

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“…Također, s istim ciljem osnovan je Corporate Reporting Dialogue (CRD) 3 , koji okuplja vodeće svjetske regulatore u području poslovnog izvještavanja. 4 Ovim se radom, uvažavajući ciljeve svjetskih priznatih organizacija, elaborira koncept izvještavanja koji je usklađen s informacijskim interesima većine dionika. Fokus ovog rada je na računovodstvenim politikama koje poduzeće primjenjuje poštujući načela izvještavanja usklađena s interesima skupina dionika.…”

Section: Uvodunclassified

Accounting Concept of Long-Term Conservation Values of Enterprises

Čičak

2018

pi-be

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Računovodstvo pruža mogućnosti evidentiranja poslovanja poduzeća na različite načine. Primjenom različitih alternativnih računovodstvenih politika postižu se različiti učinci na iskazani poslovni rezultat i na vrijednost poduzeća u cjelini. Teorijski, primjena različitih računovodstvenih politika u kratkom roku ima učinak na iskazani poslovni rezultat i na vrijednost poduzeća, dok je u dugom roku učinak primjene različitih standardnih računovodstvenih politika u sustavu stalnih cijena neutralan. Ipak, teorija ne uzima u obzir stohastičnost poslovnog okruženja i moguće promjene u zakonskoj regulativi. Teorijski modeli su ceteris paribus modeli kojima je najčešće nemoguće točno predvidjeti gospodarska kretanja i poziciju poduzeća na dugi rok. Stoga utjecajne skupine, koje određuju poslovnu politiku poduzeća, kombiniranjem dostupnih alternativnih računovodstvenih politika, utječu na kratkoročni rezultat poduzeća i na vrijednost poduzeća u cjelini. Ovim se radom opisuju mogući koncepti fi nancijskog izvještavanja koji su u najvećoj mogućoj mjeri usklađeni s pojedinačnim ciljevima dionika poduzeća, a koji će biti usklađeni s maksimalnom dugoročnom održivosti poduzeća. Opisanim će se konceptima u najvećoj mjeri uvažiti dugoročni interesi utjecajnih skupina. Analiza dugoročnih interesa svih dionika daje za njih prihvatljiv računovodstveni koncept, kojemu su osnove opisane ovim radom.

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Section: Uvodunclassified

Accounting Concept of Long-Term Conservation Values of Enterprises

Čičak

2018

pi-be

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“…Basu (2001) find that firms audited by Big Eight auditors have greater conditional conservatism, consistent with Big Eight auditors having bargaining advantages compared to non-Big Eight auditors and consequently being able to impose conservatism. Farber (2012) suggests that strong labor unions restrict management from substituting high risk investments for low risk investments, which can reduce the demand for accounting conservatism from creditors. Therefore, stronger unions are associated with lower level of conservatism.…”

Section: Summary Of Foreign Studiesmentioning

confidence: 99%

Bargaining Power of Suppliers and Buyers, and Accounting Conservatism—Evidence from Chinese Manufacturing Listed Companies

Zhao¹,

Wu²,

Sha³

2015

JFRM

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Using the panel data of Chinese manufacturing listed companies from 2003 to 2012, this paper examines the effects of suppliers' and franchisers' (buyers') bargaining power on accounting conservatism. The empirical research proves that there is an inverted U-shape relationship between suppliers' bargaining power and conditional conservatism, with lower left wing and higher right wing. The relationship between franchisers' (buyers') bargaining power and conditional conservatism is not significant. On the contrary, there is a U-shape relationship between suppliers', franchisers' (buyers') bargaining power and unconditional conservatism. The relationship between suppliers' bargaining power and unconditional conservatism has higher left wing and lower right wing. Our research results explain how strong suppliers and franchisers (buyers) affect companies' accounting practices in the Chinese context. In the meantime, our results provide support to the contracting explanation for accounting conservatism.

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“…Klasa et al (2006) show that the managers of firms with unionized employees tend to hold more cash than non-unionized peers in order to shelter firm resources form rent-seeking labor unions. More recently, research by Farber, Hsieh, Jung and Yi (2012) suggests that higher levels of union strength are associated with lower level of accounting conservatism (i.e., lower earnings quality). Hamm, Jung, and Lee (2013) argue that strong labor unions increase the incentives of managers to smooth incomes.…”

Section: Related Literature and Hypothesesmentioning

confidence: 99%

Do Labor Unions Affect Stock Price Crash Risk?

Ben‐Nasr¹,

Aldahmash²,

Ghouma³

2015

International Journal of Financial Research

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This paper examines the influence of labor unions on stock price crash risk. Using a large sample of U.S. firms over the period 1984-2013, we provide the evidence that labor unions increase the likelihood to experience future stock price crashes. This finding is consistent with the argument that firms facing strong labor unions tend to report lower accounting information, in order to preserve bargaining power when negotiating contracts with labor unions. Further, we find that the adverse effects of labor unions on stock price crash risk are less pronounced for firms with strong external monitoring mechanisms, such as high institutional ownership and high analyst coverage.

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The Impact of Non-Financial Stakeholders on Accounting Conservatism: The Case of Labor Unions

Abstract: for their helpful comments and suggestions. We especially thank David Farber for his inputs on earlier versions of this paper. All remaining errors are our own.

Cited by 5 publications

References 90 publications

Accounting Concept of Long-Term Conservation Values of Enterprises

Accounting Concept of Long-Term Conservation Values of Enterprises

Bargaining Power of Suppliers and Buyers, and Accounting Conservatism—Evidence from Chinese Manufacturing Listed Companies

Do Labor Unions Affect Stock Price Crash Risk?

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