Accounting Comparability, Conservatism, Executive Compensation-Performance, and Information Quality

Abbas Ali Daryaei, Yasin Fattahi, Davood Askarany (), Saeed Askary and Mahdad Mollazamani
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Abbas Ali Daryaei: Faculty of Social Sciences, Accounting, Imam Khomeini International University, Qazvin 34148-96818, Iran
Yasin Fattahi: Faculty of Social Sciences, Accounting, Imam Khomeini International University, Qazvin 34148-96818, Iran
Davood Askarany: Business School, Accounting and Finance, The University of Auckland, Auckland 92019, New Zealand
Saeed Askary: Department of Accounting and MIS, Gulf University for Science and Technology, Kuwait City 32093, Kuwait
Mahdad Mollazamani: Asper School of Business, University of Manitoba, Winnipeg, MB R3T 2N2, Canada

JRFM, 2022, vol. 15, issue 11, 1-28

Abstract: This paper investigates the relationship between accounting comparability, executive compensation, conditional and unconditional conservatism, and accounting information quality. The findings suggest that conditional conservatism and accounting comparability have a positive and significant impact on executive compensation. Moreover, accrual earnings management can strengthen the relationship between accounting comparability and executive compensation, whereas this is not the case with actual earnings management. Unconditional conservatism, however, does not significantly influence executive compensation. In the end, determining the correlation between earnings management and conservatism reveals that executives use conditional conservatism to perform opportunistic behaviours and gain more compensation. In light of the current results, it is expected that the assimilation of standardisation processes and their use in conjunction with existing features will enhance information quality, greater reliability of financial reports, and protect public interests.

Keywords: accounting comparability; executive compensation-performance; earnings management; conservatism; accounting information quality; public interests (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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