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Please use this identifier to cite or link to this item: http://hdl.handle.net/1974/6112

Title: Shareholder litigation and the information role of accounting conservatism
Authors: LIU, Zhefeng Frank

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Keywords: Litigation
information role of conservatism
conservatism
information asymmetry
Issue Date: 2010
Series/Report no.: Canadian theses
Abstract: The purpose of this study is to investigate the impact of litigiousness on the information role of accounting conservatism. Prior literature documents the information role of accounting conservatism, measured by the positive association between earnings conservatism and information asymmetry between inside managers and outside investors. Prior literature also demonstrates that shareholder litigation concerns motivate managers and auditors to be conservative in preparing financial statements because conservatism shields managers and auditors from allegations that they overstated earnings and net assets. In a more litigious environment, both managers and auditors have incentives to be more sensitive to expected litigation costs, which increase with the level of information asymmetry. I hypothesize that higher levels of litigiousness enhance the information role of accounting conservatism. Overall empirical results are generally consistent with the hypothesis.
Description: Thesis (Ph.D, Management) -- Queen's University, 2010-09-29 17:59:20.556
URI: http://hdl.handle.net/1974/6112
Appears in Collections:Management Graduate Theses
Queen's Theses & Dissertations

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