Abstract
This paper investigates whether a firm's life cycle stage affects its reporting conservatism in the cross-section. We use two measures of reporting conservatism used in Givoly and Hayn (2000): the level of non-operating accruals and the market-to-book ratio (unconditional conservatism); and the conservatism measure suggested by Basu (1997) (conditional conservatism). Firms are classified annually into life cycle stages using procedures proposed by Dickinson (2011). We find that unconditional reporting conservatism decreases over life cycle stages, but do not find evidence that conditional reporting conservatism is associated with life cycle stages. Our findings complement Givoly and Hayn (2000) and have implications for financial statement analysis and future research on accounting conservatism.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 76-88 |
| Number of pages | 13 |
| Journal | Advances in Accounting |
| Volume | 40 |
| DOIs | |
| State | Published - Mar 1 2018 |
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Keywords
- Accounting conservatism
- Conditional conservatism
- Firm life cycle
- Unconditional conservatism
ASJC Scopus subject areas
- Accounting
- Finance
Cite this
Accounting conservatism : A life cycle perspective. / Hansen, James C.; Hong, Keejae P.; Park, Sang H.
In: Advances in Accounting, Vol. 40, 01.03.2018, p. 76-88.Research output: Contribution to journal › Article
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TY - JOUR
T1 - Accounting conservatism
T2 - A life cycle perspective
AU - Hansen, James C.
AU - Hong, Keejae P.
AU - Park, Sang H
PY - 2018/3/1
Y1 - 2018/3/1
N2 - This paper investigates whether a firm's life cycle stage affects its reporting conservatism in the cross-section. We use two measures of reporting conservatism used in Givoly and Hayn (2000): the level of non-operating accruals and the market-to-book ratio (unconditional conservatism); and the conservatism measure suggested by Basu (1997) (conditional conservatism). Firms are classified annually into life cycle stages using procedures proposed by Dickinson (2011). We find that unconditional reporting conservatism decreases over life cycle stages, but do not find evidence that conditional reporting conservatism is associated with life cycle stages. Our findings complement Givoly and Hayn (2000) and have implications for financial statement analysis and future research on accounting conservatism.
AB - This paper investigates whether a firm's life cycle stage affects its reporting conservatism in the cross-section. We use two measures of reporting conservatism used in Givoly and Hayn (2000): the level of non-operating accruals and the market-to-book ratio (unconditional conservatism); and the conservatism measure suggested by Basu (1997) (conditional conservatism). Firms are classified annually into life cycle stages using procedures proposed by Dickinson (2011). We find that unconditional reporting conservatism decreases over life cycle stages, but do not find evidence that conditional reporting conservatism is associated with life cycle stages. Our findings complement Givoly and Hayn (2000) and have implications for financial statement analysis and future research on accounting conservatism.
KW - Accounting conservatism
KW - Conditional conservatism
KW - Firm life cycle
KW - Unconditional conservatism
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UR - http://www.scopus.com/inward/citedby.url?scp=85032793126&partnerID=8YFLogxK
U2 - 10.1016/j.adiac.2017.10.001
DO - 10.1016/j.adiac.2017.10.001
M3 - Article
AN - SCOPUS:85032793126
VL - 40
SP - 76
EP - 88
JO - Advances in Accounting
JF - Advances in Accounting
SN - 0882-6110
ER -