Recent studies show that accounting earnings are conservative, i.e., earnings tend to reflect bad news (negative stock returns) on a timelier basis than good news (positive stock returns) (Basu, 1997); moreover, the degree of conservatism is negatively associated with the price-to-book (P/B)...

This paper examines the impact of management discretion over accruals on conditional accounting conservatism, defined as the tendency of accountants to recognize bad news on a timelier basis than good news. Prior research suggests that conditional accounting conservatism reflected in earnings is...

We predict and find that regulations expected to harmonize and strengthen firms' financial reporting in the European Union (EU) in the early 2000s increase Tobin's Q ratios of firms with high agency costs due to (a) concentration of control (entrenchment) and (b) an excess of the largest...

This paper examines the impact of management discretion over accruals on conditional accounting conservatism, defined as the tendency of accountants to recognize bad news on a timelier basis than good news. Prior research suggests that conditional accounting conservatism reflected in earnings is...