Accounting Conservatism and Board of Director Characteristics: an Empirical Analysis

52 Pages Posted: 2 Mar 2006  

Anwer S. Ahmed

Texas A&M University - Mays Business School

Scott Duellman

Saint Louis University - Department of Accounting

Multiple version iconThere are 2 versions of this paper

Date Written: January 22, 2007

Abstract

Using three different measures of conservatism, we document that (i) the percentage of inside directors is negatively related to conservatism, and (ii) the percentage of outside directors' shareholdings is positively related to conservatism. Our results hold after controlling for industry, firm size, leverage, growth opportunities, institutional ownership, inside director ownership, and unobservable firm characteristics that are stable over time. Overall, the evidence is consistent with accounting conservatism assisting directors in reducing agency costs of firms.

Keywords: Accounting Conservatism, Board Independence, Outside Directors, Corporate Governance, Agency Costs

JEL Classification: G3, M41

Suggested Citation

Ahmed, Anwer S. and Duellman, Scott, Accounting Conservatism and Board of Director Characteristics: an Empirical Analysis (January 22, 2007). Available at SSRN: https://ssrn.com/abstract=887301 or http://dx.doi.org/10.2139/ssrn.887301

Anwer S. Ahmed

Texas A&M University - Mays Business School ( email )

430 Wehner
College Station, TX 77843-4353
United States

Scott Duellman (Contact Author)

Saint Louis University - Department of Accounting ( email )

3674 Lindell Blvd.
St. Louis, MO 63108
United States

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