Conditional Conservatism

Researching the influence and role of CEO overconfidence to dividend policy is important for stock market investors. Therefore, this study was conducted to find out the relationship between CEO overconfidence and dividend policy in industrial enterprises in Vietnam. Data collected from 222 industry enterprises listed on the Vietnam Stock Exchange from 2012 to 2018. Data is collected on financial statements of listed companies. GLS model with panel data is used to analyze regression results. The results show that CEO overconfidence has dividend yield higher than CEO non-overconfidence. At the same time, the dividend payout ratio of enterprises has no difference between CEO overconfidence and CEO non-overconfidence. The results also showed that revenue growth has a positive impact on dividend yield in small enterprises, but negative impact on dividend payout in large enterprises. Research results by firm size have similar results with the general analysis for all enterprises. At the same time, the analysis of ownership type shows that CEO overconfidence has a positive impact on dividend yield of non-state enterprises without affecting other types of enterprises. From these results, the authors also made a number of recommendations to help investors choose businesses to invest in accordance with their strategies.

Competition law, which governs the economic activities of entities operating in commercial and economic markets, is now facing a new challenge with the emergence of cryptocurrencies. While adhering to the philosophy of competition rules and the economic nature of these markets, it becomes necessary to conduct a legal analysis of the Bitcoin market from a competition perspective in order to identify various forms of anti-competitive behavior. In such cases, the application of competition rules and corresponding penalties needs to be tailored to the market structure. The occurrence of anti-competitive behaviors is possible in new formats, which should be taken into consideration when assessing market structure.One of the most significant forms of anti-competitive behavior is the abuse of dominance, which includes selfish strategies and the 51% attack. By manipulating the original blockchain and compromising the decentralized nature of Bitcoin, this behavior not only violates the principle of fair competition but also leads to market failure. A dominant position can also arise through mergers and monopolies involving dominant equipment. Additionally, algorithmic collusion, which involves altering the algorithm and creating a fork, represents a distinct form of cartel practice that enables the 51% attack. Attacks themselves constitute another form of collusion in this market, further complicating the competition landscape.Considering the self-regulatory nature and global structure of the Bitcoin market, competition rules and entities involved face the challenge of defining governance authority while accounting for the difficulties of imposing penalties due to anonymity criteria. Establishing an effective and productive relationship with developers is crucial for the safe application of competition rules in the market. Furthermore, it is possible to enforce competition law on registered agencies that operate as legal entities in compliance with local legal frameworks.

It is pertinent to understand how CEO optimism and accounting conservatism influence earnings management to verify the reliability and accuracy of financial reporting. The motivation behind this research comes from the possible implications for financial transparency, regulatory oversight, and investor trust while focusing on the usefulness of corporate governance. The research explores the influence of CEO optimism and accounting conservatism on earnings management within Asian emerging economies, analyzing data from listed manufacturing firms between 2010 and 2022. The study finds a negative correlation between accounting conservatism and earnings management while CEO optimism positively correlates with earnings management. These findings imply that conditional conservatism diminishes the possibility for management to inflate earnings. However, CEO optimism increases the likelihood of a firm's earnings management. This research ought to offer a thorough understanding of accounting conservatism and CEO optimism and the effect that these factors have on earnings management from the context of Asian emerging economies.

The main purpose of this study was "The impact of conservatism in financial reporting on the relationship between Managerial Overconfidence and the accuracy of profit forecast in banks listed on the Tehran Stock Exchange during 2010 to 2014". The method of implementation: in this regard, Managerial Overconfidence and conservatism are independent variables and the accuracy of profit forecast in banks is the dependent variable. The statistical population of the research is 17 banks over the above 5 year that due to the limited number of banks listed on the Tehran Stock Exchange all the banks including 85 samples were selected. A descriptive correlational research method was used with the practical approach. Methods of Library research and document mining of financial statements were used for gathering information respectively in the fields of theoretical foundations and hypotheses testing. In general, correlation method and multiple regressions is the statistical method that...

1. Introduction
Organizations think about improving their KM (KM) system and their business performance, consequently. This advantage provides a clear understanding of how to create, develop and distribute knowledge through the organization. KM could bridge between different departments of the organization so that employees can use existing knowledge in the proper way (Kiklhorn et al., 2020). In the literature, different dimensions for KM have been introduced. In one definition, KM includes knowledge creation (Kusumastuti et al., 2021), knowledge sharing (Abbas and Sagsan, 2021), knowledge application (Sarboland and Nakhostin, 2014), knowledge distribution (Jasimuddin, 2007) and knowledge transfer (Oli and Dhanasekaran, 2021).
Many researchers studied how KM practices facilitate innovation, and some studies argue that KM is an important precursor for organizational innovation. Despite the interest in KM and innovation, a few studies have been conducted in this field that relate KM practices to innovation at the business level, especially in developing countries (Ode & Ayavoo, 2020). While leadership researches have mainly focused on leadership styles and their relationship with explorative and exploitative innovation or specific KM incentives, this research focuses on the knowledge-oriented leadership style. Kelly emphasizes that it simultaneously supports both explorative (knowledge creation) and exploitative (knowledge accumulation, transfer and application) incentives. Therefore, the topics of this research show that this type of organizational leadership is necessary for organizations in the field of technology in order to improve innovation through effective development and implementation of KM incentives.

2. Literature Review
In recent decades, several studies have investigated KM in organizations. Chaithanapat et al. (2022) investigated the relationships between knowledge-based leadership, customer KM, innovation quality and performance of SMEs in Thailand. Kusumastuti et al. (2021) investigated KM for natural disaster preparedness in Indonesia. Oli and Dhanasekaran (2021) studied the product service system, service quality and KM system in their study. Mikovic et al. (2020) addressed key challenges for development projects and international cooperation of non-profit organizations with social integration and KM. Anjaria (2020) investigated new perspectives for KM in learning organizations. In another study, Ode and Ayavoo (2020) investigated the mediating role of knowledge application in the relationship between KM practices and company innovation. Vaio et al. (2021) investigated the role of digital innovation in KM systems. Abbas and Sagsan (2019) examined the impact of KM practices on green innovation and sustainable development of organizations. Martins et al. (2019) examined the research gaps in terms of research themes, strategies, goals and approaches in SMEs companies. Among older researches, we can mention the study of Curado et al. (2017), Oliveira et al. (2015), Sáenz et al. (2012), Liu and Phillips (2011), etc.

3. Methodology
The current research is descriptive-correlational in terms of method, applied in terms of purpose, and field-type in terms of data collection method. The statistical population of the research includes all the public organizations of Guilan province (61 organizations), which were studied in the period of six months ending in September 2018. Due to the possibility of access to all the elements of the statistical population, all the organizations were examined, in such a way that the researcher went to each of the general offices, and the questionnaire was given to the head of the organization, the vice presidents and HR manager. In this procedure, 104 usable questionnaires were collected, and the average answers given in each organization were considered as one questionnaire. To answer the questions, a 5-point Likert scale from completely disagree (1) to completely agree (5), was used. Content validity was used to check the validity of the questionnaire and Cronbach's alpha coefficient was used to calculate its reliability. Finally, SPSS software was applied to describe the research variables, and structural equation modeling method and PLS software were used to test the research hypotheses.

4. Results
The results of the hypotheses test verified the significant impact of knowledge transfer on innovative performance (r = 0.63), knowledge application on innovative performance (r = 0.26) and knowledge creation on innovative performance (r = 0.21). The effect of knowledge accumulation on innovative performance is significant both through knowledge transfer and knowledge application. Finally, based on the findings, the effect of knowledge-oriented leadership on knowledge documentation (r=0.58), the effect of knowledge-oriented leadership on knowledge application (r=0.39) and the effect of knowledge-oriented leadership on knowledge creation (r=0.41) =) is significant. However, the effect of knowledge-oriented leadership on knowledge transfer is not significant.

5. Discussion
Information and communication technologies form a major part of knowledge accumulation procedures and facilitate the transfer of knowledge and its application in the organization. On the other hand, knowledge-oriented leadership has a positive significant relationship with KM procedures, knowledge documentation, knowledge application, and knowledge creation, however, the relationship between knowledge-oriented leadership and knowledge transfer was not found to be significant. Since knowledge-based leadership acts as the driving force of KM incentives, the leadership style has an indirect relationship with innovation. Especially, the higher the level of knowledge-based leadership in the company, the more developed KM procedures are, which in turn will positively affect innovation. Therefore, with the result of these four sub-hypotheses, except for the first one, they are in line with the results of the research.

6. Conclusion
Using a combination of knowledge accumulation and transfer procedures, firms are able to increase the quality of their technological products. On the other hand, KM systems will be suitable for sharing and transferring knowledge when the company develops personalization policies and has adequate knowledge accumulation. Since the procedures of knowledge accumulation include storage, structuring or gathering of information, its effect on performance will be much more impressive when the members of the organization have specific goals. When the implementation of knowledge accumulation procedures is accompanied by knowledge transfer and application procedures, organizational innovation will be affected. In addition, the incentives for knowledge transfer or application will be more effective if it is accompanied by the proper knowledge collection and structuring in a database. Therefore, the transfer and application of knowledge will have a mediating role in the relationship between knowledge accumulation procedures and innovation.
Acknowledgments
The authors would like to thank all of the experts who participated in this research.

O objetivo da pesquisa consistiu em analisar se há evidências de que gestores de firmas operando no Brasil adotaram medidas prudenciais no reconhecimento contábil antecipado de efeitos esperados devido à eclosão de crise econômico-financeira. Para tanto, foi analisado o conservadorismo incondicional e o conservadorismo condicional adotado na divulgação de lucros em amostra composta por 459 sociedades por ação de capital aberto listadas na BM&FBovespa durante o período de 2003 a 2012. Na análise da existência do conservadorismo incondicional foi utilizado o teste de diferenças de média de Mann-Whitney na medida preço/patrimônio liquido, enquanto no teste da presença de conservadorismo condicional utilizou-se análise de regressão estimada por meio de efeitos aleatórios, baseada no Modelo de Basu (1997). A hipótese de pesquisa, de adoção de conservadorismo, não pôde ser aceita; contudo, constataram-se sinais significantes de adoção de conservadorismo incondicional, pela relação market-to-book no período posterior à crise, indicando que tais decisões de reconhecimento de perdas esperadas não se condicionam a más notícias específicas, ou a um momento que caracterize o início ou ápice da crise.

RESUMO: O artigo faz revisão de conceitos e significados referentes a lucro abrangente, incremento limpo do patrimônio líquido, apuração completa do resultado contábil, resultado operacional do período e de apropriação da variação do valor líquido do ativo diretamente ao patrimônio líquido. Demonstram-se suas divergências conceituais, bem como sua variada aplicação, seja como premissa de modelos de avaliação de empresas através de números contábeis, seja como forma de divulgação dos resultados contábeis. Em seguida, são analisadas normas e padrões contábeis referentes a estes conceitos, onde se constata que nos Estados Unidos e no Reino Unido já se reportam tais conceitos em demonstrações específicas. São relatados também estudos empíricos sobre o assunto a nível internacional, replicando-se os cálculos dos agregados comentados para o setor financeiro brasileiro, no período 2001/2004, em função de normatização da autoridade monetária na apropriação de valorizações de títulos mobiliários através de registro direto em contas do P.L. Se constata evidência de que o total do incremento do patrimônio líquido não está reconhecido nos resultados contábeis divulgados, sendo a diferença extremamente relevante no período imediato à mudança da norma. Palavras-chave: lucro abrangente; incremento limpo do PL; evidenciação do lucro contábil, abordagem ativo/passivo

In this study, we investigate the relationship between accounting conservatism and the cost of equity capital. Previous empirical studies examining this association use linear models that collectively resulted in a variety of contradictory outcomes. By combining existing theories in a new non-linear setting, we investigate the presence of a non-monotonic relationship between conservatism and the cost of equity capital for an international sample of public firms in 37 emerging countries during the period 2003-2012. Our findings present robust evidence suggesting a U-shaped, nonlinear relationship between accounting conservatism and the cost of equity capital. The same result holds for disaggregate measures of conservatism and other estimations techniques. The findings of this paper are in line with the theoretical framework of a "too-little-of-a-good-thing" effect, which indicates that the type of the association (negative or positive) depends on the level of conservatism. That is, the relationship is negative to an optimal point after which increasing the level of conservatism will increase the cost of equity capital. This paper sheds more light on the conservatism-cost of equity capital nexus and provides managers, investors, and policymakers with evidence to what extent conservatism is considered as beneficial or harmful.

Este artigo analisa se as empresas listadas nos segmentos de governança corporativa da BM&FBovespa estão menos propensas a alisar os seus resultados do que as empresas não listadas nestes segmentos. Neste sentido, foi analisado se as empresas listadas nos segmentos de governança corporativa da BM&FBovespa alisam resultados em proporção e intensidade inferiores às empresas não pertencentes a estes segmentos. A amostra final foi composta por 249 empresas, o que totalizou 1.245 observações para o período de 2009 a 2013, cujos dados foram coletados da base de dados do software Economática. A identificação das empresas alisadoras foi baseada no Indicador de Eckel (1981) e, o grau de alisamento, na métrica nº 1 de Leuz, Nanda e Wysocki (2003). Os resultados indicam que as empresas pertencentes e não pertencentes aos níveis de governança corporativa alisam resultados em proporção e intensidade iguais a um nível de confiabilidade de 95%, o que não confirma a teoria que envolve a governança ...

In this study, we investigate the relationship between accounting conservatism and the cost of equity capital. Previous empirical studies examining this association use linear models that collectively resulted in a variety of contradictory outcomes. By combining existing theories in a new non-linear setting, we investigate the presence of a non-monotonic relationship between conservatism and the cost of equity capital for an international sample of public firms in 37 emerging countries during the period 2003-2012. Our findings present robust evidence suggesting a U-shaped, nonlinear relationship between accounting conservatism and the cost of equity capital. The same result holds for disaggregate measures of conservatism and other estimations techniques. The findings of this paper are in line with the theoretical framework of a "too-little-of-a-good-thing" effect, which indicates that the type of the association (negative or positive) depends on the level of conservatism. That is, the relationship is negative to an optimal point after which increasing the level of conservatism will increase the cost of equity capital. This paper sheds more light on the conservatism-cost of equity capital nexus and provides managers, investors, and policymakers with evidence to what extent conservatism is considered as beneficial or harmful.

The conservatism of accounting and robustness of accounting information disclosure may restrain the irrational behavior of investors and help to reduce the risk of stock price crashes. This study aims to explore this in the context of developing country Pakistan. More specifically, this study investigates the effect of accounting conservatism on stock price crash risk. We also examine the complementary role of managerial and institutional ownership in strengthening this effect. Design/Methodology/Approach: This study conducts the panel data analysis of 155 nonfinancial firms listed in PSX from 2007 to 2019. This study calculates the C-Score to measure accounting conservatism. This study measures the firm's stock price crash risk by calculating the DUVOL of weekly share prices. Findings: This study finds that there is a significant negative effect of accounting conservatism on firms' stock price crash risk. This study also finds that managerial ownership enhances the stock price crash risk of the sample firms significantly as a moderator while there is no significant moderating influence of institutional ownership. Implications/Originality/Value: The competent authorities of Pakistan should consider agency conflicts. They should direct the firms' management to share equal information in time regardless of whether the information is good or bad for stock prices.

Profit is one of the financial statement items that significantly impact user decision-making and has received a lot of attention. Evaluating goal achievement is one of the essential aspects of any economic activity. With the increasing progress of economic activities and the need for more accurate evaluation methods to reality and complete older methods, this issue undoubtedly enters a new field. Economic value added is a performance measure that accurately calculates how a company's value increases or decreases, considering the opportunity cost of shareholders and the time value of money. This research aims to identify the most influential factors for explaining economic and accounting profit using an artificial intelligence approach. There is no such internal research given the subject. The financial data of 127 companies from 2011 to 2019 was used to test the hypotheses. The findings indicate that the variables "profit quality," "profit stability," "profit predictability," "profit smoothing," "profit transparency," "close proximity to cash," "awareness," "conservatism," and "timeliness" have a significant relationship with economic and accounting profit. However, there is no meaningful relationship between economic profit and accounting profit and the variable "Profit relevance."

Introduction / objective: In organisations, conflicts of interest give rise to agency costs aimed at mitigating agent opportunism. High-quality accounting information reduces these conflicts by minimising information asymmetry. Consequently, this study aims to investigate the relationship between agency costs and conditional conservatism in Brazilian electric power industry companies listed on the B3.

Methodology: Data from 21 Brazilian electric power industry companies for the period 2012 to 2020 were utilised. Twenty-four attributes associated with agency costs were analysed, and Ball and Shivakumar’s (2005) conditional conservatism model was employed as a measure of accounting information quality. Panel data regression models were used to obtain the results.

Results: According to the central conditional conservatism model, companies tend to exhibit optimism rather than conservatism, anticipating gains instead of losses. Results, assessed across five dimensions, revealed that factors such as board composition, variable compensation, and agreements with shareholders reduce optimism, while qualified audits, longer tenures, and the presence of a permanent audit committee increase optimism. Therefore, attributes that influence optimism, accounting information neutrality, and consequently, financial reporting quality, are identified.

Conclusions: This study benefits various users of accounting information. Investors can pinpoint governance policies that align interests, regulators can enhance oversight, and organisation members can adopt policies that encourage the alignment of interests between principals and agents.

RESUMEN
Introducción / objetivo: en las organizaciones los conflictos de intereses generan costos de agencia para mitigar el oportunismo de los agentes. La información contable de alta calidad reduce estos conflictos al minimizar la asimetría de la información. Por tanto, este estudio tiene como objetivo investigar la relación entre los costos de agencia y el conservadurismo condicional en empresas brasileñas del sector eléctrico listadas en la B3.

Metodología: se utilizaron datos de 21 empresas del sector eléctrico brasileño para el período de 2012 a 2020. Se analizaron 24 atributos asociados con los costos de agencia, y el modelo de conservadurismo condicional de Ball y Shivakumar (2005) se empleó como medida de calidad de la información contable. Los resultados se obtuvieron mediante modelos de regresión de datos en panel.

Resultados: según el modelo central de conservadurismo condicional, las empresas tienden a ser optimistas en lugar de conservadoras, anticipando ganancias en lugar de pérdidas. Los resultados, evaluados en cinco dimensiones, revelaron que factores como la composición del consejo, la compensación variable y los acuerdos con accionistas reducen el optimismo, mientras que las auditorías con salvedades, los plazos más largos y la existencia de un comité de auditoría permanente aumentan el optimismo. Por tanto, se identifican atributos que influyen en el optimismo, la neutralidad de la información contable y, en consecuencia, la calidad de los informes financieros.

Conclusiones: este estudio beneficia a varios usuarios de la información contable. Los inversores pueden identificar políticas de gobernanza que alineen intereses, los reguladores pueden mejorar la supervisión y los miembros de las organizaciones pueden adoptar políticas que fomenten la alineación de intereses entre los principales y los agentes.

This study is conducted to examine the role of accounting conservatism in managers' investment decision of the accepted firms in Tehran Stock Exchange. In order to measure conservatism, two criteria called future profitability and specific items have been applied. The variables include conservatism, ROE average, CFO average, PM average, ROE standard deviation, PM standard deviation, leverage, size, total expenditures of research, development and advertisement, Past and specific items. Also,60 accepted firms in Tehran Stock Exchange between years of 2003 to 2009 were reviewed by the use of ordinary least squares regression (OLS) method in order to test the research hypotheses. The results demonstrate that the level of conservatism in the accepted firms in Tehran Stock Exchange does not affect future operating cash, yet has an impact on firm profit margin; therefore, it can be concluded that the firms with a higher level of conservatism gain more profit margin in comparison with those with a lower level of conservatism and managers can depend on these levels to make decisions on investment. Moreover, the level of conservatism does not lead to the less identification of specific items as cost; in other words, the level of conservatism does not affect the identification of specific items.

The 2008-2009 global financial crisis and its subsequent ramifications on capital markets have led to an increasing attention on the importance of cognitive and behavioral issues in finance. The purpose of this study is to determine the ranking of the industry alternatives for portfolio investments based on individual investors' perceptions. Accordingly, a hybrid analytic multi-criteria decision model (MCDM)-based on the Fuzzy Analytic Hierarchy Process (FAHP) and the Fuzzy Technique for the Order of Preference by Similarity to Ideal Solution (FTOPSIS) methods along with sensitivity analysis-is developed to identify and rank-order the best performing industry options. The proposed model is applied to Borsa Istanbul Stock Exchange 100 Index (BIST 100) in Turkey. The results indicate that (i) the investors' perceptions on market conditions and global financial situation influence their industry selection on company stocks; (ii) the investors' perceptions on portfolio investments rely heavily on performance and risk levels of individual asset/stocks, and (iii) traded stocks of financial industry (along with its sub-industries) have greater performance expectations than those of the ones in other industries such as technology, services and tourism.

During the past few years, there have been growing interest in learning the relationship between residual income and other financial figures such as dividend per share, market value and operating cash flow. The proposed study of this paper gathers the financial information of all listed firms traded in Tehran Stock Exchange over the period of 2007-2011. We only concentrate on listed companies whose fiscal years started from March to May of each year. The other criterion associated with the proposed study of this paper is that shares of the selected firms must have been active during period of study and there must be no change in their fiscal calendar. The study does not include the shares of holdings, banks, insurance firms. Finally, the information of the firms must be available for course of study. The study uses two regressions analysis and examines five hypotheses including the relationship between residual income and other factors including dividend per share, value added operating cash flow, value added cash flow, market cap and market value added. Using two regression models, all these hypotheses are investigated and the results of the survey confirm a meaningful relationship between residual income and dividend per share, value added operating cash flow, value added cash flow. However, the results of the second model do not confirm the last two hypotheses.

During the past few years, there have been growing interest in learning the relationship between residual income and other financial figures such as dividend per share, market value and operating cash flow. The proposed study of this paper gathers the financial information of all listed firms traded in Tehran Stock Exchange over the period of 2007-2011. We only concentrate on listed companies whose fiscal years started from March to May of each year. The other criterion associated with the proposed study of this paper is that shares of the selected firms must have been active during period of study and there must be no change in their fiscal calendar. The study does not include the shares of holdings, banks, insurance firms. Finally, the information of the firms must be available for course of study. The study uses two regressions analysis and examines five hypotheses including the relationship between residual income and other factors including dividend per share, value added operating cash flow, value added cash flow, market cap and market value added. Using two regression models, all these hypotheses are investigated and the results of the survey confirm a meaningful relationship between residual income and dividend per share, value added operating cash flow, value added cash flow. However, the results of the second model do not confirm the last two hypotheses.

In this paper the effect of corporate governance on Iran's economic growth is investigated. Capital market is one of the important sections in the economy of countries. The economic growth is the source of capital market, on the other hand the efficient financial institutions is the main factor to achieve the desired economic growth. The development of stock exchange markets depends on good implementation of corporate governance which in turn culminates at increased dynamic economic growth. Therefore, we investigated the effect of corporate governance on Iran's economic growth during 1994-2010; using Time series method was inspired by General Method of Momentums. The results show that corporate governance is reinforced directly and indirectly through the positive influence of capital market performance indices on economic growth. Index Terms-Corporate governance (CG), GMM economic growth, tehran stock exchange (TSE). Fatemeh Mehrabani is from Iran and was born in 1981. She is Ph.D. student of Islamic Azad University Science and research, Tehran Branch and she has a Master's Degree in Economic development and Planning from Islamic Azad University Science and Research Branch. Her main areas of Academic and research interest are Financial Market, Money and Banking, Monetary Policy, Economic Modeling and Corporate Governance.

In this study, we investigate the relationship between accounting conservatism and the cost of equity capital. Previous empirical studies examining this association use linear models that collectively resulted in a variety of contradictory outcomes. By combining existing theories in a new non-linear setting, we investigate the presence of a non-monotonic relationship between conservatism and the cost of equity capital for an international sample of public firms in 37 emerging countries during the period 2003-2012. Our findings present robust evidence suggesting a U-shaped, nonlinear relationship between accounting conservatism and the cost of equity capital. The same result holds for disaggregate measures of conservatism and other estimations techniques. The findings of this paper are in line with the theoretical framework of a "too-little-of-a-good-thing" effect, which indicates that the type of the association (negative or positive) depends on the level of conservatism. That is, the relationship is negative to an optimal point after which increasing the level of conservatism will increase the cost of equity capital. This paper sheds more light on the conservatism-cost of equity capital nexus and provides managers, investors, and policymakers with evidence to what extent conservatism is considered as beneficial or harmful.

This paper provides a commentary on the academic literature on accounting conservatism with a view to highlighting the insights of that literature that are potentially useful for accounting standard setters. We begin by introducing the basic concepts of conservatism focusing on the distinction between conditional and unconditional conservatism. We then briefly discuss the objectives of financial reporting and the economics of information, paying particular attention to the role of stewardship in the Conceptual Framework, and the economic concepts of adverse selection and moral hazard. The two middle sections of the paper provide overviews of, respectively, the theoretical and empirical literatures on accounting conservatism. Having summarised the theoretical and empirical literatures, we then try to synthesis the implications of the literature for standard setters, paying particular attention to understanding the costs and benefits of conservatism, implications for the Conceptual Framework, highlighting the particular demands of public debt markets for conservatism, and explaining how accounting standards might be adapted to allow some degree of flexibility in conservative accounting choice. The final section discusses the limitations of the academic literature from the practical point of view of standard setters, and highlights areas for new research that may be of more direct value for policy-making.

This paper investigates the effect of the economic value added (EVA) performance evaluation on the value of the cash holdings of Tehran Stock Exchange firms. The aim of this study is to investigate the influence of the underinvestment modification and overinvestment restraint on cash holding. To do so, Pinkowitz and Wiliamson model was used to investigate 127 companies between 2004 and 2013. This study is applied in purpose and descriptive correlational in method. Eviews software was used to analyze the data. The results of the study show that economic value added performance evaluation decreases the underinvestment and the overinvestment of Tehran Stock Exchange firms and on the other hand, economic value added performance evaluation increases the value of cash holding. This study contributes to the emerging literature related to cash holdings and the economic consequences of the economic value added performance evaluation policy. It expands the literature related to investor prote...

Previous studies show mixed evidence of the role of banking expertise on the board of directors on accounting conservatism. In this paper, we add to this growing literature by providing an innovative way to measure banking expertise based on lifetime working history in banks of all individual directors on the board. We find that accounting conservatism is negatively affected by banking expertise on the board. Also, the results indicate that banking expertise on the board has a more pronounced impact on accounting conservatism when firms have high bankruptcy risk and when firms have high financial leverage. The evidence has some implications for boards of directors.

This paper investigates, in the Brazilian stock market, the effect of hedge accounting on the quality of financial information, on the disclosure of derivative financial instruments, and on the information asymmetry. To measure the quality of accounting information, relevance metrics of accounting information and book earnings informativeness were used. For executing this research, a general sample was obtained through Brazilian companies, non-financial, listed on the Brazilian Securities, Commodities, and Futures Exchange (BM&FBOVESPA), comprising the 150 companies with highest market value on 01/01/2014. Through the general sample, samples were compiled for applying the econometric models of value relevance, informativeness, disclosure, and information asymmetry. The sample for relevance had 758 companies-years observations within the period from 2008 to 2013; the sample for informativeness had 701 companies-years observations with the period from 2008 to 2013; the sample for disc...

The aim of this study was to investigate two aspects of accounting information that may be inherently related: income smoothing practices and conditional conservatism. Theoretically, the more a firm employs income smoothing, i.e., uses accruals to reduce the variability of profits, the less possibility there is for the timely acknowledgement of future economic losses (i.e., bad economic news) in profits. Eckel's model (1981) was used in this study to classify listed companies as smoothing or non-smoothing, and Basu's model (1997) was used to quantify the degree of conditional conservatism present in each firm. To make the results more robust, samples were created with annual stock return data from both March and December. The results indicated that non-smoothing firms had a higher degree of conditional conservatism, i.e., more opportunity to recognize future economic losses because the market could use the stock return data to anticipate future losses contained in the inform...

Corporate directors are influenced by overconfidence, which is one of the personality traits of individuals; it may take irrational decisions that will have a significant impact on the company's performance in the long run. The purpose of this paper is to validate and compare the Naive Bayesian Classification algorithm and probit regression in the prediction of Management's overconfident at present and in the future. Financial during the years are 2012 to 2017. To support the theoretical results, the samples were the companies admitted to the Tehran Stock Exchange, (financial data of 1292 companies/year in total). Data collection in the theoretical part of the study benefitted from the library method, and for calculating data, Excel software was used, and in order to test the research hypotheses Matlab 2017 and Eviews10.0 were used. The empirical findings demonstrate that, Gained nonlinear prediction model of the Naive Bayes Classification algorithm, has high ability to predi...

Ranking of companies listed on the exchange represent their status and considered a criterion for investment. Also, it increases market's competition, development and efficiency. In this study, the fifty superior companies listed in Tehran Stock Exchange were ranked based on financial ratios (liquidity, operational, leverage and profitability) using FAHP- FTOPSIS hybrid approach during the years 2013 . Initially, capital markets authorities and universities' financial masters perspectives about effect of ratios were collected by questionnaire and weighting with FAHP technique and then companies were ranked based on ratios using the FTOPSIS technique. The results indicate that there is a weak correlation between two groups of ranking. In fact, results show that the stock exchange’s selected top companies necessarily do not have higher rankings in terms of financial ratios and the firms’ financial Statements are weak approximation for firms’ superiority likelihood in the stock...

An investor would like to build a balanced portfolio with stocks representing different sectors. Several researchers have attempted the portfolio selection problem by different methods. Many of these methods consider companies of different sectors together. However, it can be argued that the attributes affecting the company's growth vary for different sectors. Therefore, it is advisable to compare a company with the companies of the same sector. There are many options for the selection of a stock from a particular sector. A stock ranking method is proposed by using MADM methods based on overall performance under a stochastic environment. Of many MADM methods, SAW, AHP, TOPSIS, and VIKOR are applied. Usually, Euclidean distances (2-norm) are considered in the implementation of TOPSIS and VIKOR methods. In this work, this norm is generalized to p-norm, where p > 1. The model is tested for 13 companies in the field of Information Technology sector (IT) listed on National Stock Exchange in India and 13 criteria as performance indicators of a company. A MATLAB GUI system is developed and the results are obtained for several values of p in case of TOPSIS and VIKOR methods besides other methods. As the result indicates, the ordering is not much affected by different values of p in certain range. Moreover, higher values of p have adverse effect on the ordering. The proposed model is able to provide better information on the overall performance of a particular stock in comparison with its peers. The results obtained by various methods clearly separate good companies from inferior companies though the exact ordering slightly differs.

The purpose of this research is to review the effect of overconfidence on profit smoothing in three macro industries: vehicle and parts manufacturing, chemical products and medicinal materials and products in Tehran stock exchange. Time period of this research is 2006-2012 and a number of 56 companies (22 vehicle companies, 13 chemical companies, and 21 medicinal companies) were chosen as sample. Binary logit multi-variable regression models were used to analyze research data in mentioned industries in Eviews 6 software. In this research, profit smoothing is considered as dependent variable, managerial overconfidence as independent variable, and also some control variables effective on profit smoothing such as return on assets, financial leverage, and company size, have been used. The findings indicate that managerial overconfidence has no effect on profit smoothing in the companies which are being reviewed. Moreover, in medicinal materials and products industry, the effect of company size on profit smoothing has been positive and significant, and the effect of return on assets on profit smoothing has been negative and significant.

Previous studies show mixed evidence of the role of banking expertise on the board of directors on accounting conservatism. In this paper, we add to this growing literature by providing an innovative way to measure banking expertise based on lifetime working history in banks of all individual directors on the board. We find that accounting conservatism is negatively affected by banking expertise on the board. Also, the results indicate that banking expertise on the board has a more pronounced impact on accounting conservatism when firms have high bankruptcy risk and when firms have high financial leverage. The evidence has some implications for boards of directors.

Researching the influence and role of CEO overconfidence to dividend policy is important for stock market investors. Therefore, this study was conducted to find out the relationship between CEO overconfidence and dividend policy in industrial enterprises in Vietnam. Data collected from 222 industry enterprises listed on the Vietnam Stock Exchange from 2012 to 2018. Data is collected on financial statements of listed companies. GLS model with panel data is used to analyze regression results. The results show that CEO overconfidence has dividend yield higher than CEO non-overconfidence. At the same time, the dividend payout ratio of enterprises has no difference between CEO overconfidence and CEO non-overconfidence. The results also showed that revenue growth has a positive impact on dividend yield in small enterprises, but negative impact on dividend payout in large enterprises. Research results by firm size have similar results with the general analysis for all enterprises. At the same time, the analysis of ownership type shows that CEO overconfidence has a positive impact on dividend yield of non-state enterprises without affecting other types of enterprises. From these results, the authors also made a number of recommendations to help investors choose businesses to invest in accordance with their strategies.

Purpose This study aims to examine the impact of political stability and political rights on firm-level earnings (both accrual-based and real) management. Design/methodology/approach The authors develop models that link political stability, political rights, and the interplay between the two and earnings (both accrual-based and real) management. The authors analyze 63,872 firm-year observations of publicly listed, non-financial, firms drawn from 39 countries, for the period 1995 to 2016. Findings The authors find that political stability (political rights) attenuates (accentuates) accrual-based earnings management; political rights (political stability) accentuates (have no effect on) real earnings management; and the association between political rights and real earnings management is more pronounced in countries with better political stability. Practical implications The findings imply that users of financial statements should take cognizance of a country’s ambient political envir...

Esta pesquisa investiga a influência da tributação no grau de conservadorismo de empresas listadas na BM&FBovespa no período de 2000 a 2006. Nesse sentido, foram formuladas hipóteses sobre a associação da provisão para imposto de renda e contribuição social sobre o lucro na Demonstração do Resultado do Exercício com o grau de conservadorismo das empresas da amostra, sobre a associação do imposto de renda diferido na Demonstração do Resultado do Exercício com o grau de conservadorismo das empresas da amostra e a respeito da influência do setor ao qual a empresa pertence sobre o seu comportamento em relação ao conservadorismo. Foi selecionada uma amostra de 162 empresas por meio de uma amostragem intencional não probabilística, as quais foram objeto de uma regressão com dados em painel (não balanceado) com 845 observações. Após a realização de testes, o modelo de efeitos fixos mensurado pelo método de mínimos quadrados ponderados foi considerado o mais bem indicado para a análise, a q...

Background: This study has tried to answer the question whether effective financial and operating policies mechanisms on holding profitability (investment social security company) are effective on affiliated companies return or not? To answer the question in this study, 53 companies of covered firms of social security investment firm are investigated in the period 2008 to 2012. In this study, profitability ratio, ROE and ROA are evaluated as performance and indices of holding and performance variable of affiliated firms is evaluated by Q Tobin indices. To test the hypotheses, regression models and T,F tests and coefficient of determination at significance level 95% are used. It can be said, to analyze the models, panel analysis is applied. The study findings show that generally holding indices are effective on the return of affiliated firms and corporate governance via institutionalized shareholder in forms has considerable impact on supervision and performance of affiliated firms and increases the return of financial performance of affiliated firms.

We investigate the relationship between conservative accounting and earnings attributes, including persistence, predictability, value relevance and timeliness. In this study, the financial data between the years 2004 to 2008 of 145 listed companies in Tehran stock market have been accumulated. Using the Analysis of Correlation Coefficient and Regression Modeling, the research theories have been examined. The results show the effectiveness of conservative accounting on the earnings attributes. To measure conservative accounting in this study, the MTB ratio has been used. The research results confirm direct relationship between conservative accounting and qualitative characteristics including persistence, predictability and value relevance; so that the relationship is statistically meaningful. Furthermore, there was not any observed meaningful relationship between conservative accounting and timeliness of profit.

The practice of conservatism in reported earnings of Brazilian privately held corporations and public companies is analyzed. The accounting normative structure is differentiated for these groups in view of regulatory actions made by the CVM; this would imply diverse conservatism levels for both. However, the hypothesis adopted is that there is no differentiation between informational qualities (measured by conservatism) in the accounting reports for both types of firms. An institutional environment of low incentive and low level of protection to the investors in the stock market does not induce demand for reports with informational efficiency in the public corporations (BALL, 2001;. The research's tests make use of regressions developed by Basu (1997) and . Research outcomes support the hypothesis of reduced level of conservatism. The evidence was tested using concepts of asymmetrical timely anticipation of economic losses and conditional conservatism; the data base of SERASA supported this evidences (2,833 firms, covering the period from 1995 to 2004).

Resumo O Conservadorismo Condicional exige maior grau de verificação das boas notícias para reconhecê-las como lucro, em relação ao grau de verificação das más notícias para o seu reconhecimento no resultado do exercício. Face às preocupações referentes à qualidade da informação contábil, o objetivo do trabalho consiste em mensurar o Conservadorismo Condicional a partir do reconhecimento antecipado de perdas econômicas mensurada pela relação entre Fluxo de Caixa Operacional e os accruals ...

Previous studies show mixed evidence of the role of banking expertise on the board of directors on accounting conservatism. In this paper, we add to this growing literature by providing an innovative way to measure banking expertise based on lifetime working history in banks of all individual directors on the board. We find that accounting conservatism is negatively affected by banking expertise on the board. Also, the results indicate that banking expertise on the board has a more pronounced impact on accounting conservatism when firms have high bankruptcy risk and when firms have high financial leverage. The evidence has some implications for boards of directors.

Previous studies show mixed evidence of the role of banking expertise on the board of directors on accounting conservatism. In this paper, we add to this growing literature by providing an innovative way to measure banking expertise based on lifetime working history in banks of all individual directors on the board. We find that accounting conservatism is negatively affected by banking expertise on the board. Also, the results indicate that banking expertise on the board has a more pronounced impact on accounting conservatism when firms have high bankruptcy risk and when firms have high financial leverage. The evidence has some implications for boards of directors.

In this research, some beliefs on the theoretical concepts of accounting, such as the tradeoff between the qualitative characteristics of relevancy and reliability, and reliability and timeliness have been tested. For testing research hypotheses, T-student test has been used. The results of investigating 100 firms listed on Tehran Stock Exchange during the years 2001-2011, suggest that companies which offer more reliable information, have higher level of relevancy. Also, companies which offer more timely information, have higher level of relevancy. Some other results of this research show the positive relation between reliable and timeliness characteristics. In other words, companies which offer more timely information have more reliable information and companies with more reliable information have more timely information.

This paper studies the effect of the quality of information disclosure on profit information content and the book value of the equity of 256 firms listed on Tehran Stock Exchange (TSE) during 2002-2009. To this aim, and to determine if there is any linear correlation between the research variables, various tests such as Pearson’s and Spearman’s correlation tests as well as Fisher, Limer, Hausman, Durbin-Watson, Wald, and Vaung’s statistics methods were used. The results showed that: 1) the incremental and relative information content of the book value is little; 2) the profit information content is significantly higher than that of the book value; and 3) the quality of information disclosure in the studied firms did not have a significant impact on the information content of earnings and the book value of equity. [Seyyed Majid Eslamzadeh, Seyed Ali Vaez, Ali Ramezan Ahmadi. The Effect of the Quality of Information Disclosure on Profit Information content and the Book Value of the Eq...

Este estudo tem por objetivo investigar se empresas listadas na BM&FBovespa, pertencentes a setores regulados efetuam gerenciamento de resultados contábeis (GR), e identificar se a relação entre o índice de governança corporativa dessas empresas influencia no nível de gerenciamento dos resultados das mesmas. A pesquisa caracteriza-se como Descritiva em relação a seu objetivo; Documental quanto aos procedimentos e Quantitativa quanto a sua abordagem. Os dados analisados foram coletados junto ao software Economática® para o período de 2005 a 2009. Para a análise dos dados utilizou-se o modelo KS para o cálculo do gerenciamento de resultados. As medidas representativas do índice de governança corporativa das organizações representam as variáveis dependentes da pesquisa. Para verificar a relação entre gerenciamento de resultados e o índice de governança corporativa destas empresas, foi realizado o teste-T de diferenças de médias. Os resultados encontrados sugerem o gerenciamento de resu...

Profit is one of the financial statement items that significantly impact user decision-making and has received a lot of attention. Evaluating goal achievement is one of the essential aspects of any economic activity. With the increasing progress of economic activities and the need for more accurate evaluation methods to reality and complete older methods, this issue undoubtedly enters a new field. Economic value added is a performance measure that accurately calculates how a company's value increases or decreases, considering the opportunity cost of shareholders and the time value of money. This research aims to identify the most influential factors for explaining economic and accounting profit using an artificial intelligence approach. There is no such internal research given the subject. The financial data of 127 companies from 2011 to 2019 was used to test the hypotheses. The findings indicate that the variables "profit quality," "profit stability," "profit predictability," "profit smoothing," "profit transparency," "close proximity to cash," "awareness," "conservatism," and "timeliness" have a significant relationship with economic and accounting profit. However, there is no meaningful relationship between economic profit and accounting profit and the variable "Profit relevance."

The purpose of this paper is to investigate the role of managerial ability in information environment quality in the listed companies on the Tehran Stock Exchange (TSE). This research has focused on the quality of the information environment and has attempted to investigate the impact of management ability 22

The purpose of this paper is to investigate the role of managerial ability in information environment quality in the listed companies on the Tehran Stock Exchange (TSE). This research has focused on the quality of the information environment and has attempted to investigate the impact of management ability 22

Forecast accounting earnings and economic change has long time that has attracted investor's interest, managers, financial analysts, researchers and creditors. And is counted the most important source of information for investors, creditors and other users, especially on the stock exchange. Therefore, this study examines the impact of earning quality audit and internal control weaknesses in companies listed on the Tehran Stock Exchange. The target population included all companies listed in Tehran Stock Exchange during the period of 2008-2014, respectively. For statistical analysis used the descriptive statistics and inferential statistics and regression. We used the F index at the error level of 5% and P-Value, for the Significance test of independent variables used the T index 90%, 95% and 99% to evaluate the significance of regression models. The results showed that auditor industry specialization have direct impacts with profit and earnings quality will be increased significantly. Also, the results showed that auditor industry specialization has an impact on earnings quality and as well as weaknesses in internal controls effect on earnings quality and auditor industry specialization, the impact on earnings quality moderated weak internal controls.

In order to test the implication of Watts's (2003) argument that accounting conservatism can increase the efficiency of executive compensation contracts, we investigate the relationship between the adoption of accounting conservatism and the payment of excess executive compensation in Japanese firms. We focus on the executive compensation practice in Japan because the demand for accounting conservatism is likely to be larger for Japanese firms than it is for U.S. firms because of the lack of explicit compensation contracts in Japan. Consistent with the proposed arguments, we find that accounting conservatism is negatively related to excess cash compensation. We also find that this negative relationship is larger for firms with higher compensation earnings coefficients. These results suggest that the adoption of conservatism in accounting reduces the possibility of managers receiving excess cash compensation and that the demand for accounting conservatism in executive compensation contracts is larger when the ex post settling up problem is more serious.

O artigo examina as diferenças, em termos de qualidade informacional (conservadorismo condicional), das demonstrações contábeis de companhias brasileiras de capital aberto emissoras e não emissoras de ADR. Também são examinadas as demonstrações publicadas nos dois sistemas contábeis (PCAB e USGAAP). As hipóteses propõem que não há diferenças nos graus de conservadorismo condicional entre as firmas em razão das similaridades contratuais e institucionais, da inexistência de incentivos para alterar o comportamento dos gestores pelo processo de cross-listing e da insuficiência de motivação pela aplicação de princípios contábeis diversos. Os modelos de componentes transitórios nos lucros (BASU, 1997) e de associação entre apropriações contábeis e fluxos de caixa (BALL; SHIVAKUMAR, 2005) foram utilizados para os testes. Para estimar os coeficientes de associação dos dois modelos, utilizou-se análise de dados em painel. Os resultados confirmaram as hipóteses.

O artigo avalia a presença de conservadorismo nos resultados apresentados nas demonstrações contábeis publicadas no Brasil pelas sociedades por ação no período de 1995 a 2004. Realiza-se a pesquisa em virtude da constatação de que a regulamentação brasileira, de um lado, é enfática no estabelecimento de princípio ou convenção do conservadorismo - antecipar o registro de perdas e diferir o reconhecimento de receitas - e, de outro, permite o reconhecimento prematuro de receitas não realizadas, como é o caso da reavaliação de ativos. O trabalho testou a antecipação oportuna assimétrica de perdas econômicas através do modelo de Componentes Transitórios nos Lucros (BASU, 1997) e o conservadorismo condicional através do modelo de Associação entre Apropriações Contábeis e Fluxos de Caixa (BALL; SHIVAKUMAR, 2005). A amostra considera sociedades por ações com dados para a série temporal completa, regredindo-se os dados em painel segundo os métodos mais adequados. Os resultados confirmam a hi...

RESUMO O artigo investiga a presença de conservadorismo condicional nos lucros reportados pelas instituições financeiras no Brasil, e examina se essa característica é diferenciada entre bancos estatais e bancos privados. O modelo de reversão de componentes transitórios do lucro proposto por Basu (1997) e o modelo de acumulações contábeis, desenvolvido por Ball e Shivakumar (2005, 2006), foram aplicados para testar a presença de conservadorismo condicional nos lucros reportados pelos bancos brasileiros. Também, se testou se os lucros reportados pelos bancos estatais são mais conservadores do que os reportados pelos bancos privados. Os dados comportam 260 bancos abrangendo o período de 1997 a 2010. Os coeficientes dos modelos foram estimados pelo método GMM Sistêmico, para tratamento da endogeneidade dos regressores. Apesar de o ambiente econômico e institucional brasileiro não incentivar a qualidade informacional das demonstrações contábeis, não se confirmou a primeira hipótese de pesquisa. Ademais, os gestores dos bancos estatais antecipam o reconhecimento de perdas não realizadas, reportando demonstrações contábeis mais conservadoras, provavelmente para reduzir a exposição ao risco de litígio com órgãos de controle do Governo; os achados, portanto não suportam a rejeição da segunda hipótese.

This paper investigates the relationship between accounting comparability, executive compensation, conditional and unconditional conservatism, and accounting information quality. The findings suggest that conditional conservatism and accounting comparability have a positive and significant impact on executive compensation. Moreover, accrual earnings management can strengthen the relationship between accounting comparability and executive compensation, whereas this is not the case with actual earnings management. Unconditional conservatism, however, does not significantly influence executive compensation. In the end, determining the correlation between earnings management and conservatism reveals that executives use conditional conservatism to perform opportunistic behaviours and gain more compensation. In light of the current results, it is expected that the assimilation of standardisation processes and their use in conjunction with existing features will enhance information quality...