Measuring Accounting Conservatism in Financial Reports: A Comparison Between France and the United Kingdom

Kimouche Bilal ()
Additional contact information
Kimouche Bilal: Département des Sciences Financières et Comptabilité, Université 20 Août 1955, Skikda, Algeria

Journal of Social and Economic Statistics, 2021, vol. 10, issue 1-2, 56-75

Abstract: Accounting conservatism is necessary for more reliability and verifiability in financial reports. Studies have reported mixed results concerning the comparative level of conservatism across countries, especially the celebrated comparison between the common law and code law countries. Therefore, this study is an attempt to reinvestigate accounting conservatism in French and UK companies, using 110 French companies and 105 UK companies during the period 2011-2019. Accounting conservatism was measured depending on the asymmetric accruals-to-cash flows because it does not rely on market information and its fluctuations. The results document a greater level of conservatism in UK companies compared to French companies, which confirms the findings of several previous studies concluding that companies in common law countries are more conservative than those from code law countries. The results of this study have many implications for different parties affecting the financial information environment, especially auditors who must continuously monitor conservatism practices in financial reports to maintain an adequate level.

Keywords: Accounting conservatism; Accounting accruals; Cash flows from operations; Common law countries; Code law countries (search for similar items in EconPapers)
JEL-codes: D82 D86 M40 M41 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.2478/jses-2021-0005 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:vrs:jsesro:v:10:y:2021:i:1-2:p:56-75:n:6

DOI: 10.2478/jses-2021-0005

Access Statistics for this article

Journal of Social and Economic Statistics is currently edited by Erika Marin

More articles in Journal of Social and Economic Statistics from Sciendo
Bibliographic data for series maintained by Peter Golla ().