Work

The Role of Accounting Conservatism in the Decreasing Book Equity of U.S. Firms

Year: 2022

Type: article

Abstract: We offer a novel explanation for the widespread decline in U.S. firms’ reported book equity. We find that accounting conservatism is negatively associated with book equity, a result that is both economically and statistically significant, as well as robust to a variety of model specifications. Our findings suggest that the rise in accounting conservatism has significantly contributed to the declines in book equity over the decades.

Source: International Journal of Financial Studies

DOI: 10.2139/ssrn.4199416

Authors: Haowen Luo, Bing Luo, Stephen Peabody

Institutions: Indiana University – Purdue University Fort Wayne, Purdue University Fort Wayne, San Francisco State University, Elon University

Language: English

Topic: Auditing, Earnings Management, Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: gold

Estimated APC paid: $1,466

OpenAlex ID: W4413306524

FWCI:

Cites: 58

Cited by:

Related to: 10