Discussion of Optimal Conservatism with Earnings Manipulation

• 成果类型: Article
• 署名作者: Core, John E.
• 署名单位: Massachusetts Institute of Technology (MIT)
• 刊物名称: CONTEMPORARY ACCOUNTING RESEARCH
• ISSN/ISSBN: 0823-9150
• DOI: 10.1111/1911-3846.12249
• 发表日期: 2017
• 页码: 285-291
• 关键词: Incentives; STANDARDS

摘要

In this discussion, I briefly summarize the key features of Bertomeu, Darrough, and Xue's (hereafter BDX) model. I then examine the four key assumptions that BDX employ to arrive at their results: (i) firms contract only on earnings; (ii) conservative earnings are better for contracting; (iii) conservatism motivates upward earnings manipulation; and (iv) conservatism is endogenous. I then briefly conclude.