Accounting conservartism, debt contract and operating cycle
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Data
2019-09-18
Autores
Barino, Humberto Pigozzo Martins
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Universidade Federal do Espírito Santo
Resumo
This study examines how leverage combined with the length of the operating cycle moderate the effect of conditional conservatism.I use a sample of U.S.firms and, alternatively, a sample of Brazilian firms.I estimate regressions with firm and year fixed-effects and show that longer operating cycles in highly leveraged firms reduce conservatism in the financial reporting, while longer operating cycles increase the conservatism in lower leveraged firms. Also, firms with shorter operating cycles increase the conservatism in highly leveraged firms, while lower leveraged firms with shorter operating cycles report less conservatively their accounting figures. My findingssuggest that debt drives the conservatism as in prior findings and show that the length of the operating cycle adds incremental information. Strengthen prior studies, my findings are in accordance with the accounting conservatism literature andextendprior literature that conservatism is a response to idiosyncratic uncertainty and that information quality are determined for firm specific characteristics.
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Conservadorismo , Endividamento , Dívida , Ciclo operacional , Incerteza , Conditional conservatism , Debt contracting , Operating cycle , Uncertainty