Work

Accounting conservatism and firm performance during the COVID‐19 pandemic

Year: 2021

Type: article

Abstract: We explore whether firms with more conditionally conservative accounting practices have higher stock returns than other firms during the Covid‐19 outbreak. We find evidence that Chinese firms listed on the Shanghai and Shenzhen Stock Exchanges applying more conditionally conservative reporting have lower declines in stock return performance during the Covid‐19 outbreak relative to other firms. We also find that the beneficial role of conditional conservatism is higher when firms have greater information asymmetry following the Covid‐19 pandemic. Our results are robust to various model specifications with four different measures of conservatism and an alternative return window.

Source: Accounting and Finance

DOI: 10.1111/acfi.12767

Authors: Li Cui, Pamela Kent, Sujin Kim, Shan Li

Institutions: Xiamen University, Queensland University of Technology, The University of Adelaide

Language: English

Topic: Auditing, Earnings Management, Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: bronze

Funders: Times Higher Education, National Natural Science Foundation of China

Awards: G4279510833, G6225586720