Earnings restatements and differential timeliness of accounting conservatism

• 成果类型: Article
• 署名作者: Ettredge, Michael; Huang, Ying; Zhang, Weining
• 署名单位: University of Louisville; University of Kansas
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2012.01.002
• 发表日期: 2012
• 关键词: asymmetric timeliness; debt; COSTS; GAAP

摘要

We examine whether Basu's (1997) differential timeliness metric and the related C-Score metric are effective in detecting predictable differences in conservatism surrounding corrections of overstated earnings. Cross-sectional and time-series analyses, employing 2132 firms making restatements during 1999-2005, suggest Basu-based metrics capture variation in conservatism. Further, we find that increases in conservatism following restatements are contingent on improvements in corporate governance. Collectively, these results provide evidence of the usefulness of the Basu-based metrics in the restatement setting. (c) 2012 Elsevier B.V. All rights reserved.