Managerial ownership and accounting conservatism

• 成果类型: Article
• 署名作者: Lafond, Ryan; Roychowdhury, Sugata
• 署名单位: Massachusetts Institute of Technology (MIT)
• 刊物名称: JOURNAL OF ACCOUNTING RESEARCH
• ISSN/ISSBN: 0021-8456
• DOI: 10.1111/j.1475-679X.2008.00268.x
• 发表日期: 2008
• 页码: 101-135
• 关键词: founding-family ownership; ceo cash compensation; asymmetric sensitivity; limited-liability; AGENCY COSTS; firm; earnings; Timeliness; BOARD

摘要

In this paper we examine the effect of managerial ownership on financial reporting conservatism. Separation of ownership and control gives rise to agency problems between managers and shareholders. Financial reporting conservatism is one potential mechanism to address these agency problems. We hypothesize that, as managerial ownership declines, the severity of agency problem increases, increasing the demand for conservatism. Consistent with our hypothesis, we find that conservatism as measured by the asymmetric timeliness of earnings declines with managerial ownership. The negative association between managerial ownership and asymmetric timeliness of earnings is robust to various controls, in particular, for the investment opportunity set. We thus provide evidence of a demand for conservatism from the firm's shareholders.