Shareholder litigation and the information role of accounting conservatism
Loading...
Authors
Liu, Zhefeng Frank
Date
2010-09-30T14:46:52Z
Type
thesis
Language
eng
Keyword
Litigation , information role of conservatism , conservatism , information asymmetry
Alternative Title
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
Citation
Publisher
License
This publication is made available by the authority of the copyright owner solely for the purpose of private study and research and may not be copied or reproduced except as permitted by the copyright laws without written authority from the copyright owner.