References (45)


Citations (62)



Managerial Ownership and Accounting Conservatism

Ryan LaFond

Algert Global, LLC

Sugata Roychowdhury

Boston College

February 2007

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

Open PDF in Browser 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: https://ssrn.com/abstract=929693 or http://dx.doi.org/10.2139/ssrn.929693

Contact Information

Ryan LaFond
Algert Global, LLC ( email )
One Maritime Plaza
Suite 1525
San Francisco, CA 94111
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: 5,671
Downloads: 2,115
Download Rank: 4,487
References:  45
Citations:  62