Conditional accounting conservatism: Exploring the impact of changes in institutional frameworks in four countries

Melissa Moy, Richard Heaney, Ann Tarca and Warrick van Zyl ()

Journal of Contemporary Accounting and Economics, 2020, vol. 16, issue 3

Abstract: This study examines the links between conditional conservatism in financial accounting and certain changes in the institutional frameworks in Australia, France, Japan and the United States of America (US) during the period 1981–2008. We identify specific time periods where changes in market regulation and financing structure; harmonisation and convergence of accounting standards; and corporate governance occurred. We find that conditional conservatism, measured using the Basu (1997) model, decreased in all four countries over the study period. Indeed, by the end of the period studied, there was little support for the existence of conditional conservatism in any of the four countries. However, it is important to note that the pattern and timing of the changes varied across the four countries.

Keywords: Conditional conservatism; Asymmetrical timeliness; Institutional framework; Harmonization; Convergence; IFRS (search for similar items in EconPapers)
JEL-codes: M41 M48 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jocaae:v:16:y:2020:i:3:s181556692030028x

DOI: 10.1016/j.jcae.2020.100214

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