International Differences in the Value-Relevance of Accounting Numbers: Timeliness, Permanence and Conservatism Under U.S. And U.K. Gaap

Posted: 20 Jan 1997

See all articles by Peter F. Pope

Peter F. Pope

Bocconi University; London School of Economics and Political Science

Martin Walker

University of Manchester - Manchester Business School

Bambang Setiono

University of Manchester

Date Written: October 1996

Abstract

The empirical relationships between stock prices/returns, earnings and book value are informative about characteristics of accounting quality: conservatism in measurement of earnings and book value; earnings persistence; and earnings timeliness. In this paper we analyse the comparative accounting quality characteristics of the U.S. and U.K. GAAP regimes. We examine large panel data sets over a nineteen year period, controlling for inter- and intra-GAAP regime differences in firm size and industry membership. Our main findings are (i) U.S. earnings were less permanent; (ii) earnings were more timely in the U.K.; (iii) there is weak evidence that earnings recognition is more conservative in the U.S.

JEL Classification: M41, M44, G12

Suggested Citation

Pope, Peter F. and Walker, Martin and Setiono, Bambang, International Differences in the Value-Relevance of Accounting Numbers: Timeliness, Permanence and Conservatism Under U.S. And U.K. Gaap (October 1996). Available at SSRN: https://ssrn.com/abstract=2856

Peter F. Pope (Contact Author)

Bocconi University ( email )

Dept of Accounting
Milan, 20136
Italy

London School of Economics and Political Science ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

Martin Walker

University of Manchester - Manchester Business School ( email )

Booth Street West
Manchester, M15 6PB
United Kingdom

Bambang Setiono

University of Manchester

Oxford Road
Manchester M13 9PL, M13 9PL
United Kingdom

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