Optimal accounting policies under financial constraints: aggressive versus conservative

Masatomo Akita () and Yusuke Osaki ()
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Masatomo Akita: Graduate School of Economics, Osaka University
Yusuke Osaki: Faculty of Economics, Osaka Sangyo University

Economics Bulletin, 2011, vol. 31, issue 4, 3179-3191

Abstract: We examine how severity of financial constraints influences firms' choices of accounting policies. This paper shows that firms with mild financial constraints choose an aggressive accounting policy and those with severe financial constraints choose a conservative accounting policy.

Keywords: accounting policy; financial constraints (search for similar items in EconPapers)
JEL-codes: D8 M4 (search for similar items in EconPapers)
Date: 2011-11-22
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