Banks that follow conditional conservatism in their loan loss accounting treatments benefit from a reduction in crash risk. The key discretionary loan loss accounting channels are provisions and allowances. We show that conditional conservatism reduces crash risk of small banks during periods of...

We investigate whether four dimensions of corporate governance mechanisms, namely ownership structure, accounting opacity, board structure and process and managerial incentives, relate to 1-year-ahead stock price crash risk. Employing principal component analysis on the 21 attributes that...

We show that firms with younger CEOs are more likely to experience stock-price crashes, including crashes caused by revelation of negative news in the form of breaks in strings of consecutive earnings increases. Such strings are accompanied by large increases in CEO compensation that do not...