Abstract

http://ssrn.com/abstract=929693
 
 

References (45)



 
 

Citations (62)



 


 



Managerial Ownership and Accounting Conservatism


Ryan LaFond


BlackRock

Sugata Roychowdhury


Boston College

February 2007


Abstract:     
In this paper we examine the effect of managerial ownership on financial reporting conservatism. Separation of ownership and control gives rise to agency problems between managers and shareholders. Financial reporting conservatism is one potential mechanism to address these agency problems. We hypothesize that as managerial ownership declines, the severity of agency problem increases, increasing the demand for conservatism. Consistent with our hypothesis, we find that conservatism as measured by the asymmetric timeliness of earnings declines with managerial ownership. The negative association between managerial ownership and asymmetric timeliness of earnings is robust to various controls for the investment opportunity set. We thus provide evidence of a demand for conservatism from the firm's shareholders.

Number of Pages in PDF File: 55

Keywords: accounting conservatism, conservatism, managerial ownership, CEO ownership, agency costs, agency problems

JEL Classification: M41, M44, G32, G34

working papers series


Download This Paper

Date posted: September 12, 2006  

Suggested Citation

LaFond, Ryan and Roychowdhury, Sugata, Managerial Ownership and Accounting Conservatism (February 2007). Available at SSRN: http://ssrn.com/abstract=929693 or http://dx.doi.org/10.2139/ssrn.929693

Contact Information

Ryan LaFond
BlackRock ( email )
400 Howard Street
San Francisco, CA 94105
United States
Sugata Roychowdhury (Contact Author)
Boston College ( email )
140 Commonwealth Avenue
Chestnut Hill, MA 02467
United States
617-552-1764 (Phone)
Feedback to SSRN


Paper statistics
Abstract Views: 4,711
Downloads: 1,850
Download Rank: 3,744
References:  45
Citations:  62

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo4 in 0.719 seconds