Conservatism In Companies Research Articles

Conservatism as a moderating variable on the determinants of earnings management

This study aims to provide empirical evidence about the determinants that can impact earnings management, through board diligence, ownership concentration, CEO ownership, and CEO tenure, as well as testing conservatism as a moderating variable. Secondary data, specifically information derived from annual financial reports, are utilized in this study. Information for financial reports is acquired from the Indonesia Stock Exchange (IDX) data stream and website from 2013 to 2022, the population of this study comprises all banking institutions listed on the Indonesia Stock Exchange. This study’s findings demonstrate that the presence of board diligence significantly hinders earnings management. Moreover, the findings of this study demonstrate that organizations characterized by a significant concentration of ownership will have the capacity to mitigate the prevalence of earnings management practices. Additionally, this study’s findings demonstrate that a reduction in earnings management activities is associated with greater CEO ownership. The findings of this study offer a practical illustration for stakeholders regarding the responsibilities of shareholders, which may prove beneficial in overseeing an organization’s operations. This study shows that high conservatism in companies actually mitigates the good effects of the ownership concentration and CEO ownership variables on earnings management. In summary, this study establishes that companies characterized by elevated levels of conservatism do not actively engage in earnings management practices that are beneficial to the organization. AcknowledgmentThis research received no specific grant from any funding agency in the public, commercial, or non-profit sectors.

Determinants of the Selection of Accounting Conservatism in Indonesia: A Systematic Literature Review Approach

In the current era of globalization and the internationalization of capital markets, it is crucial to have clear and prompt financial reporting. Accounting conservatism is an essential qualitative characteristic in the field of accounting information. This study employs the Systematic Literature Review (SLR) approach to examine the factors influencing the selection of accounting conservatism within the framework of recognized national journals. By implementing rigorous inclusion and exclusion criteria, this study utilized Google Scholar to identify 10 nationally recognized journals that have received accreditation. The literature search process was meticulously overseen and employed the Publish or Perish application to guarantee precision and consistency in data compilation. The research findings indicate that managerial ownership of shares has a substantial and favorable impact on implementing accounting conservatism practices. Specifically, 81.22% of the companies in the sample were in a state of non-financial distress. Also, factors such as profitability, capital intensity, CEO gender, and board size impact accounting conservatism. Financial and non-financial factors influence such policies, including financial stress, leverage, and institutional ownership. These findings offer valuable insights into the dynamics of accounting conservatism in companies, inform financial decisions and the development of company policies, as well as provide guidance for future research in accounting and finance.

Pengaruh Profitability Terhadap Penerapan Konservatisme Akuntansi Pada Perusahaan Yang Terdaftar Di Jakarta Islamic Index

To find out the company's financial condition in one period, it is reviewed through the financial statements issued by the company. The information for interested parties such as creditors, investors, government and users of financial statements is the responsibility of company management. Components in the presentation of its financial statements that already exist in PSAK No. 1 with issuance from the Indonesian Accounting Association, these components include the company's statement of financial position, the income statement, the report on changes in the company's equity, the report on its cash flows and the notes to the financial statements. 1 As for one of the methods in compiling a financial report issued by companies, namely the preparation of financial reports using the principle of accounting conservatism. Accounting conservatism includes actions taken to present the company's financial statements using the precautionary principle in which the company slows down recognizing profits and assets and accelerates recognizing losses and debts. The consequence of using this principle can result in lower profit and income values while costs tend to be relatively high. 2 The benefits of using conservatism can minimize risks to managers who have excessive optimism. However, excessive use of the principle of conservatism can cause differences in profits and losses by not reflecting the actual state of the company3 Judging from the above phenomenon, profitability can be a consideration in the application of accounting conservatism in companies listed on the Jakarta Islamic Index The purpose of this research is to find out how profitability affects the application of accounting conservatism in companies listed on the Jakarta Islamic Index. The number of samples in the research in this study amounted to 42 samples using a quantitative approach. The technique used in taking the sample uses non-probability sampling techniques, namely techniques in taking samples from the population where members of the population do not have the same opportunity to be used as samples. In this non-probability sampling technique, the researcher uses a purposive sampling technique, namely the sampling technique is based on certain criteria or requirements set by the researcher. The data obtained is processed using Eviews and the research data is panel data. The results of this study indicate that the value of tcount = 2.741973 > table = 1.68957 with probability = 0.0096 <α = 0.05. Based on this comparison it can be stated that Profitability has a significant positive influence on the application of accounting conservatism so that if the Profitability variable increases, the accounting conservatism variable will also increase

Financial Statement Restatements and Conditional Conservatism in Companies Listed on B3

This study investigated the association between financial statement restatements and conditional conservatism in Brazilian publicly traded companies listed on B3. A sample of 192 non-financial companies was used from 2012 to 2020. The conditional conservatism was measured using Ball and Shivakumar's (2005) model. The study employed five dimensions of restatement measures, comprising both voluntary and compulsory restatement modalities, and six-panel data regression models was conducted. The results revealed that there is no relationship between voluntary restatement and conservatism. However, there is generally a positive association between compulsory restatement and conservatism. Thus, companies mandated to restatement their reports by the regulator tend to be more conservative, indicating the lower quality of financial reports. These findings provide valuable insights for various external users of accounting information, as restatements can assist companies in understanding negative signals in the market, help investors in better resource allocation, and assist regulators in devising appropriate measures for prevention or punishment.

STRUKTUR KEPEMILIKAN DAN KONSERVATISME AKUNTANSI

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The Investigation of Effective Indices on Conservatism in Companies Acquired in Tehran Stock Exchange

In this research, the effect of conservatism on earnings management and capital structure of listed companies in Tehran Stock Exchange has been investigated. The research population consisted of all companies listed in Tehran Stock Exchange during the period of 2005-2015. The research method is descriptive-survey and correlation type. The sample size is 120 companies based on the Cochran formula. The required data from the software was extracted. Datasheet analysis was used to analyze the data. Chow model, Hausman and combined regression were used. In the first model, coefficients of short and long-term debt ratio ratios to capital, and in the second model, the ratio of debt to capital, company size and asset return at a significant level of 5%, the remaining coefficients are not significant, and the amount of the R2 (coefficient of determination). The model suggests that 87% of the variations of the dependent variable with the independent and controllable variables can be explained, and the Durbin-Watson statistics reject the assumption of self-correlation between the components of the model. The results showed that conservatism on the structure of capital and the management of the profits of private companies were accepted in Tehran Stock Exchange. Keywords : Conservatism, Profit, Accepted Companies, Tehran Securities. DOI : 10.7176/RHSS/9-12-09 Publication date :June 30 th 2019

Independent directors’ board networks and accounting conservatism

This paper studies the influence of network centrality of independent directors on accounting conservatism. Using A-share list companies from 2007–2012 as the sample, we find that: (1) the higher the network centrality of independent directors, the lower the accounting conservatism; (2) considering the different environment in which the companies operate, network centrality of independent directors only has a significant influence on accounting conservatism in regions with a poor financial development environment and a poor legal environment; (3) considering the different environment within the companies, the network centrality of independent directors only has a significant influence on accounting conservatism in companies without bank connections. The findings of this paper enrich the studies of determinants of accounting conservatism from the perspective of association with characteristics of independent directors, and show the substitution effect of an institutional environment and other networks to the function of network centrality of independent directors.

Accounting Conservatism Analysis in Indonesia after Adoption of IFRS and Relation to the Characteristics of the Board As One of the Mechanism of Corporate Governance (Empirical Study on Manufacturing Companies Listed on the Stock Exchange)

This study aims to analyze the level of accounting conservatism in companies listed on the Stock Exchange. Analysis of accounting conservatism was performed using quantitative methods. Accounting conservatism roomates applied in different levels are influenced by external and internal factors. The external factors used in this study is the adoption of IFRS, while the internal factors are used that good corporate governance mechanisms such as the proportion of independent directors, the intensity of board meetings, managerial ownership, educational background of financial accounting and audit committee members and the size of the company. This study measured conservatism based on the accrual that was developed by Gipoly and Hyan (2002). The population of this study were manufacturing companies listed on the stock exchange Indonesia in 2005-2012. The sample was 38 manufacturing companies determined by purposive sampling. Data analysis was performed with the classical assumption and hypothesis testing with multiple linear regression models. The results of this study indicate that the IFRS, the intensity of board meetings, and institutional ownership have significant effects on the level of accounting conservatism. On the other hand, the proportion of independent directors, the educational background of financial accounting and audit committee members and the size of the company does not have a significant effect on the level of accounting conservatism after the adoption of IFRS.

PENGARUH KONVERGENSI IFRS, BONUS PLAN, DEBT COVENANT, DAN POLITICAL COST TERHADAP KONSERVATISME AKUNTANSI

This research aims to analyze and get empirical evidence about the effect of IFRSconvergence, bonus plan, debt covenant, and political cost on accounting conservatism incompanies which are listed at BEI. Independent variables in this research are IFRSconvergence, bonus plan which is proxied by the structure of managerial ownership, debtcovenant which is proxied by leverage, and political cost whichis proxied by firm size.Dependent variable in this research is accounting conservatism. Sample used in this researchare companies which are listed at BEI in 2012. By using purposive sampling, found that 127companies are proper sample of the research. The multiple regression analysis is the methoduse to analyse the hypotesis. The results shows that IFRS convergence and political cost havenegative effect and significantly on accounting conservatism. On the other hand, bonus planand debt covenant didn’t effect significantly on accounting conservatism DOI: 10.15408/akt.v7i3.2736

An Investigation into the Effect of Audit Quality on Accounting Conservatism in Companies Listed in Tehran Stock Exchange

The present study sought to investigate the effect of audit quality on accounting conservatism in Iranian capital market. In this study, given the hypotheses and theoretical foundations of the study, three hypotheses were formulated and the effect of each of the factors of industry-specialist auditor, auditor rank, and auditor tenure was examined on accounting conservatism of companies. The period for investigation was from 2009 to 2013. Its population was determined as all companies listed in Tehran Stock Exchange and the statistical sample of the study included 100 companies. The data required for this study were extracted from website of Tehran Stock Exchange and after collecting events through available resources and entering data in Excel software; its functions were used to calculate the variables of the study. Then, the results from measuring variables were entered into Eviews software for statistical calculations and the relationship between variables were evaluated using this software. The results of the study showed that there is a positive relationship between accounting conservatism and auditing attributes such as auditor rank and auditor tenure. Also, the obtained results indicated that there is no significant relationship between accounting conservatism and customer industry-specialist auditor.

The Relationship between Ownership Structure and Conservatism of Companies in Iran

Purpose - Since Iran's economy is only now developing, and its stock market is only now emerging, we should deal with the relationship between...

Investigation of the Impact of Effective Variables on Levels of Accounting Conservatism in Companies Listed in Tehran Stock Excancge

Investigation of the Impact of Effective Variables on Levels of Accounting Conservatism in Companies Listed in Tehran Stock Excancge

The Effect of Degree of Convergence to IFRS and Governance System to Accounting Conservatism: Evidence From Asia

Motivated by increasing pressure for full convergence to IFRS, I investigate the effect of degree of convergence from local standards to IFRS on accounting conservatism. I also examine the impact of governance system, both at country and firm level, on conservatism. This research's sample covers a number of East and South East Asia countries: Hong Kong, India, Indonesia, Japan, Korea, Malaysia, Philippines, Singapore, Taiwan and Thailand. This study concludes that the degree of convergence positively affects accounting conservatism. Governance system, both at country level and firm level, also has positive influence on accounting conservatism. Interestingly, the influence of the extent of convergence of local GAAP to IFRS and corporate governance practice on conservatism is stronger for companies in countries with weak investor protection. In addition, I find that the adoption of international standards will increase accounting conservatism in companies with weak corporate governance practice.

Earnings Conservatism and Equity Raisings of Cross-Listed Firms

We examine conditional accounting conservatism (Basu, 1997) of UK firms cross-listed in the US. More specifically, we compare the degree of conservatism for UK cross-listed firms that raise equity capital versus conservatism of companies that do not raise equity capital. We expect that equity raising firms exhibit high levels of conservatism since they face important reputation and litigation consequences and are likely to be followed intensively by financial intermediaries around the time of equity raising activities. To mitigate confounding effects from debtholders' demand for conservative accounting, we control for debt-raising activities of our sample firms. Using data on equity deals from cross-listed firms during the years, our results show that firms that raise equity capital have more conservative earnings than comparable firms that don't issue new equity. Moreover, firms that exclusively raise capital through equity issues are significantly more conservative than firms that raise funds solely through debt issues. This finding puts the demand from debtholders as the only drive for conservative accounting into perspective. Our evidence suggests that firms provide credible and verifiable earnings information to investors to deal with information asymmetries that arise in issuing equity capital in an efficient way.