Belief‐updating biases hinder the correction of inaccurate beliefs and lead to suboptimal decisions. We complement Rabin and Schrag's (1999) portable extension of the Bayesian model by including conservatism in addition to confirmatory bias. Additionally, we show how to identify these two...

By applying the matching technique to a sample of Spanish tourism family firms, we analyze the factors that describe the competitive strategy, asset and ownership structure, and managerial practices of first-generation family firms compared to subsequent generations. Moreover, we employ panel...

This study assesses the relationship between the likelihood of future stock price crashes and conservatism-an accounting characteristic that leads to the undervaluation of accounting net assets relative to economic net assets. This undervaluation is achieved by less stringent verification...

Purpose - Our study aims to explore the ownership structure and accounting conservatism in influencing the value relevance that we analyse through the paradigm of open innovation and socio-emotional wealth (SEW). We also extended the test to identify how firm size could affect value relevance....

The Union of European Football Associations (UEFA) has become an industry in recent decades that has attracted many investors. The UEFA issued a Financial Fair Play Regulation (FFPR) policy to control the financial condition of football clubs. This study aims to determine the effect of leverage...

This study seeks to measure the microeconomic consequences of the adoption of the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) standards on the conservatism, financial performance (FP), and earnings management (EM) of Islamic banks (IBs). The study draws on...

Purpose: The purpose of this paper is to examine how accounting conservatism affects the relation between current stock returns, current earnings, and future earnings. Design/methodology/approach: To achieve the purpose of this paper, we divide accounting conservatism into conditional and...

The Union of European Football Associations (UEFA) has become an industry in recent decades that has attracted many investors. The UEFA issued a Financial Fair Play Regulation (FFPR) policy to control the financial condition of football clubs. This study aims to determine the effect of leverage...

Many employees want to either retain their jobs or attain promotion. In doing so, they remain silent and conform to all the decisions taken by the top management. Most studies have treated the causes of this silence as unobserved intervening mechanisms and named them black boxes. The current...

This paper investigates how accounting rule reform affects the usage of conditional conservatism in the property-liability (P&L) insurance industry. More specifically, whether the accounting rule changes that strengthen the internal control over financial reporting and improve the financial...

This study examines the relationship between chief executive officers' (CEOs') characteristics (e.g., tenure, experience, education, age and compensation) and accounting conservatism for a sample of 672 yearly observations from both Jordanian industrial and service companies listed on the Amman...

Generalist CEOs have accumulated transferrable general skills by working in multiple firms or industries. Recent decades have witnessed an increasing demand for generalist CEOs, which has resulted in a favorable job market for them. Favorable outside job opportunities reduce generalist CEOs’...

In this study, the effects of key audit matters (KAMs), one of the measures recently introduced to improve accounting transparency in the production-to-order industry in terms of corporate sustainability, are examined. After the introduction of KAMs, auditors should publicly disclose key audit...

F. A. Hayek published The Road to Serfdom in 1944, so 2019 marks the 75th anniversary of the event. The paper traces how Hayek came to write the book, who his opponents were, and how the book got interpreted by both friends and critics after its publication. Because the book is more typically...

The recent revisions of conceptual frameworks (CFs) by the IASB and the FASB included changes to the status of prudence/conservatism, accompanied by a broader debate about the meaning and role of asymmetry in financial accounting theory (FinAT). This paper adopts a historical perspective to...

This study investigates whether national culture influences judgments made by Polish and British accounting professionals when interpreting selected International Financial Reporting Standards (IFRS) that contain uncertainty expressions. We provide evidence from the Central and Eastern European...

This article analyzes some of the reasons why so many Western intellectuals have seemed ready to abandon the principles of liberalism lately in search for alternative solutions. I begin by examining the fascination exercised by Viktor Orbán among conservatives in the US who emerged as staunch...

Prior studies on developed markets have documented that conditional conservatism is positively associated with investment efficiency. In this study, we investigate whether this association can be shaped by the unique institutional environment—state ownership of firms and banks—in China....

We investigate how local political corruption shapes corporate financial reporting conservatism. Using a large sample of U.S. public firms, we find that firms located in areas with higher levels of political corruption tend to adopt greater accounting conservatism. This finding is robust to...

We examine the role of accounting conservatism in alleviating the agency problems of overvalued equity. We predict that by imposing asymmetric timeliness of good versus bad news reporting, conservatism limits the incidence of earnings expectation games. According to Jensen (2005), these games...

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...

We study the relation between CEO industry tournament incentives, measured as the distance between CEO-pay and the highest-paid CEO among similar firms by industry and size, and conditional accounting conservatism. Conditional conservatism imposes a faster recognition of bad news in earnings,...

This study investigates the effect of accounting conservatism on corporate investment decisions in China. Specifically, we analyze how accounting conservatism affects a company's investment decision-making. Furthermore, we examine the difference in this effect of accounting conservatism on...

We investigate the impact of uncertainty of uncertainty (UOU) on corporate accounting conservatism, finding a positive association. Mechanism analysis suggests that under UOU, creditor demands for real information drives shifts toward accounting conservatism. Further analysis shows that the...

We study the links between conditional conservatism and voluntary disclosure of management private information. We argue that conditional conservatism acts as a mechanism that lends credibility to voluntary disclosure by providing a hard reporting benchmark that allows outsiders to better...