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- Title
Nonfinancial Stakeholder Orientation and Conditional Accounting Conservatism.
- Authors
Burke, Qing Liao; Wang, Mengying; Zhao, Yijia Eddie
- Abstract
This study examines the relation between conditional accounting conservatism and nonfinancial stakeholder orientation. Using the staggered passage of constituency statutes to identify increases in nonfinancial stakeholder orientation, we document that firms report more conservatively after statute adoption. Cross-sectional analyses indicate the increase in conditional conservatism after statute enactment is more pronounced for firms with higher agency costs between shareholders and managers, and less pronounced for firms with customers that have greater bargaining strength. Collectively, our study sheds light on how the increasing trend of nonfinancial stakeholder orientation plays a role in shaping financial reporting practices.
- Subjects
CONSERVATISM (Accounting); AGENCY costs; FINANCIAL statements; CROSS-sectional method; STATUTES
- Publication
Review of Pacific Basin Financial Markets & Policies, 2020, Vol 23, Issue 4, pN.PAG
- ISSN
0219-0915
- Publication type
Article
- DOI
10.1142/S0219091520500319