Asymmetric timeliness tests of accounting conservatism

• 成果类型: Article
• 署名作者: Dietrich, J. Richard; Muller, Karl A., III; Riedl, Edward J.
• 署名单位: University System of Ohio; Ohio State University; Pennsylvania Commonwealth System of Higher Education (PCSHE); Pennsylvania State University; Pennsylvania State University - University Park; Harvard University
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-006-9023-y
• 发表日期: 2007
• 页码: 95-124
• 关键词: earnings; distributions; INFORMATION; returns; assets; prices

摘要

Recent accounting research employs an asymmetric timeliness measure to test the hypothesis that reported accounting earnings are conservative. This research design regresses earnings on stock returns to examine whether bad news is incorporated into earnings on a more timely basis than good news. We identify properties of the asymmetric timeliness estimation procedure that will result in biases in the test statistics except under very restrictive conditions that are rarely met in typical empirical settings. Using data series that are devoid of asymmetric timeliness in reported earnings, we show how these biases result in evidence consistent with conservatism. We conclude that the biased test statistics inherent in the asymmetric timeliness research design preclude using this method to measure conservatism; that these biases are irresolvable as they originate in the test's specification; and that studies employing asymmetric timeliness tests cannot be interpreted as providing evidence of conservatism.