Discussion of an Economic Framework for Conservative Accounting and Bushman and Piotroski (2006)

Loading...
Thumbnail Image
Penn collection
Accounting Papers
Degree type
Discipline
Subject
financial reporting
conservatism
timeliness of loss and gain recognition
international accounting
political and legal institutions
contracting
compensation and incentives
debt contracts
Accounting
International Business
Funder
Grant number
License
Copyright date
Distributor
Related resources
Author
Guay, Wayne R
Verrecchia, Robert E
Contributor
Abstract

We offer an economic framework for generating predictions about the demand for conservative accounting reports. We define conservatism as: More timely recognition of losses than gains as a result of the costs and benefits of reporting verifiable information by managers and/or firms being asymmetric. We also discuss Bushman and Piotroski's interpretation of the speeds of “good news recognition” and “incremental bad news recognition” in “Basu-type” regressions as separate signals about accounting conservatism. Finally, we suggest avenues for future research that seeks to investigate the links between institutions and contracts, and between contracts and conservatism

Advisor
Date Range for Data Collection (Start Date)
Date Range for Data Collection (End Date)
Digital Object Identifier
Series name and number
Publication date
2006-10-01
Journal title
Journal of Accounting and Economics
Volume number
Issue number
Publisher
Publisher DOI
Journal Issue
Comments
Recommended citation
Collection