A wealth based explanation for earnings conservatism

Accounting and Finance

Research output: Working paper

Published

Standard

A wealth based explanation for earnings conservatism. / Lubberink, Martien; Huijgen, C.
Lancaster University: The Department of Accounting and Finance, 2000. (Accounting and Finance Working Paper Series).

Research output: Working paper

Harvard

Lubberink, M & Huijgen, C 2000 'A wealth based explanation for earnings conservatism' Accounting and Finance Working Paper Series, The Department of Accounting and Finance, Lancaster University.

APA

Lubberink, M., & Huijgen, C. (2000). A wealth based explanation for earnings conservatism. (Accounting and Finance Working Paper Series). The Department of Accounting and Finance.

Vancouver

Lubberink M, Huijgen C. A wealth based explanation for earnings conservatism. Lancaster University: The Department of Accounting and Finance. 2000. (Accounting and Finance Working Paper Series).

Author

Lubberink, Martien ; Huijgen, C. / A wealth based explanation for earnings conservatism. Lancaster University : The Department of Accounting and Finance, 2000. (Accounting and Finance Working Paper Series).

Bibtex

@techreport{d28d9f3969a24d9ba6edf55118d6e96d,

title = "A wealth based explanation for earnings conservatism",

abstract = "This paper investigates the relation between managers' wealth concerns and the degree of conservatism in reported earnings. The nature of accounting causes reported earnings to be inherently untimely. The timeliness is less prominent for gains than for losses, which result is in conservatively reported earnings numbers. Earnings conservatism serves an important purpose, it reduces the likelihood of conflict about the ex-post distribution of a firm's cash flows among parties associating with a firm. Conservatism enables outside parties to learn efficiently about the quality of a firm's manager, which is beneficial for him. Unlike existing research, this paper assumes that managers value the benefits of conflict reduction differently. This paper hypothesizes that a manager's wealth concerns determine the degree of conservatism. The empirical results confirm this hypothesis. These results shed a new light on the mechanism driving earnings conservatism.",

author = "Martien Lubberink and C Huijgen",

year = "2000",

language = "English",

series = "Accounting and Finance Working Paper Series",

publisher = "The Department of Accounting and Finance",

type = "WorkingPaper",

institution = "The Department of Accounting and Finance",

}

RIS

TY - UNPB

T1 - A wealth based explanation for earnings conservatism

AU - Lubberink, Martien

AU - Huijgen, C

PY - 2000

Y1 - 2000

N2 - This paper investigates the relation between managers' wealth concerns and the degree of conservatism in reported earnings. The nature of accounting causes reported earnings to be inherently untimely. The timeliness is less prominent for gains than for losses, which result is in conservatively reported earnings numbers. Earnings conservatism serves an important purpose, it reduces the likelihood of conflict about the ex-post distribution of a firm's cash flows among parties associating with a firm. Conservatism enables outside parties to learn efficiently about the quality of a firm's manager, which is beneficial for him. Unlike existing research, this paper assumes that managers value the benefits of conflict reduction differently. This paper hypothesizes that a manager's wealth concerns determine the degree of conservatism. The empirical results confirm this hypothesis. These results shed a new light on the mechanism driving earnings conservatism.

AB - This paper investigates the relation between managers' wealth concerns and the degree of conservatism in reported earnings. The nature of accounting causes reported earnings to be inherently untimely. The timeliness is less prominent for gains than for losses, which result is in conservatively reported earnings numbers. Earnings conservatism serves an important purpose, it reduces the likelihood of conflict about the ex-post distribution of a firm's cash flows among parties associating with a firm. Conservatism enables outside parties to learn efficiently about the quality of a firm's manager, which is beneficial for him. Unlike existing research, this paper assumes that managers value the benefits of conflict reduction differently. This paper hypothesizes that a manager's wealth concerns determine the degree of conservatism. The empirical results confirm this hypothesis. These results shed a new light on the mechanism driving earnings conservatism.

M3 - Working paper

T3 - Accounting and Finance Working Paper Series

BT - A wealth based explanation for earnings conservatism

PB - The Department of Accounting and Finance

CY - Lancaster University

ER -

Research