Abstract
[Purpose] This study conducted an analysis of the effect of corporate accounting conservatism on split bond rating. Accounting conservatism directly or indirectly plays a role in reduction of information uncertainty and asymmetry and thus it can affect bond rating to be differently given by credit-rating agencies.
 [Methodology] A multivariate logit analysis was performed on 1,732 firm-year samples with corporate bond ratings from multiple credit rating agencies in the KOSPI market from 2012 to 2021.
 [Findings] The empirical result shows that accounting conservatism had a negative relationship with the split bond rating. This means that the higher the accounting conservatism, the less information uncertainty and asymmetry, resulting in a decrease in split bond rating. In order to make it more clear the cause and effect relationship between accounting conservatism and split bond rating, an additional analysis was conducted in which the degree of split bond rating was set as a dependent variable. As a result of additional analysis, it was found that the degree of split bond rating decreased as the accounting conservatism increased.
 [Implications] This study makes a kind of distinguishment by verifying that accounting conservatism is a component of the cause of split bond rating and reversely by suggesting that information uncertainty and asymmetry arising from the accounting conservatism can affect split bond rating. It also implies that the accounting conservatism should be considered in the process of interpreting credit ratings from an investor's point of view. Also, this research is valuable by giving an insight to management who plan to raise debt capital and to regulatory agencies that design disclosure systems.
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