NATIONAL ACCOUNTING CULTURE AND THE RECOGNITION OF PROVISIONS: AN APPLICATION OF THE PRUDENCE PRINCIPLE

Liliana Feleagă, Voicu D. Dragomir and Niculae Feleagă
Additional contact information
Liliana Feleagă: A.S.E. - The Bucharest University of Economic Studies / Academia de Studii Economice din Bucureşti
Voicu D. Dragomir: A.S.E. - The Bucharest University of Economic Studies / Academia de Studii Economice din Bucureşti
Niculae Feleagă: A.S.E. - The Bucharest University of Economic Studies / Academia de Studii Economice din Bucureşti

Post-Print from HAL

Abstract: Prudence in accounting is a corner-stone concept which has shaped accounting theory, as well as ordinary financial reporting. Thus, on the quantitative side of the study, we developed a proxy for accounting conservatism, namely the degree of uncertainty associated with the settling of a company's obligations. To this purpose, we hand-collected accounting data for 388 business groups from 17 European countries. For these companies we computed the provisions-to-liabilities ratio (PLR) and performed several group tests, according to the following original classification of national accounting cultures. The results indicate that companies incorporated in countries that are classified as ‘conservative' do assign a significantly higher degree of uncertainty to their total amount of liabilities.

Keywords: mixed research methods; accounting conservatism; European companies; national accounting culture; international harmonization (search for similar items in EconPapers)
Date: 2010-05-10
Note: View the original document on HAL open archive server: https://hal.science/hal-00481581v1
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published in Crises et nouvelles problématiques de la Valeur, May 2010, Nice, France. pp.CD-ROM

Downloads: (external link)
https://hal.science/hal-00481581v1/document (application/pdf)

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:hal:journl:hal-00481581

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().