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The effect of economic conditions on accounting conservatism under IFRS in Europe

2020Journal article Open access
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dc.contributor.authorCerqueira, António
dc.contributor.authorPereira, Cláudia
dc.date.accessioned2021-12-30T18:49:23Z
dc.date.available2021-12-30T18:49:23Z
dc.date.issued2020
dc.description.abstractWe analyse in detail conservative accounting practices in seventeen European countries, taking into account institutional factors. In addition, we examine the impact of IFRS adoption and the influence of changes in economic conditions on conditional conservatism. Specifically, we study the level of accounting conservatism before and after IFRS adoption detailing for the pre and crisis period and post-crisis period surrounding the 2007/2008 financial crisis. Our findings are consistent with a conservative accounting practice in Europe as a whole and in each country individually. Besides, opposite to that expected, the results provide evidence of more conservative accounting practice in Anglo-Saxon countries, but we find no significant differences in conservatism in Nordic countries. Another finding is a significant decrease in the level of conservatism after IFRS adoption. Regarding the joint impact of IFRS adoption and economic conditions, we find a decrease in conservatism in the pre and crisis period, followed by a substantial increase in the post-crisis period. Our results seem to be in line with the positive accounting theory when suggesting that conservatism plays a fundamental role as corporate governance and efficient contracting mechanism between managers and other stakeholders of the firm. Furthermore, the results suggest that the flexibility provided by IFRS allows adjusting the level of conservatism when economic conditions change.pt_PT
dc.description.sponsorshipThe authors would like to thank all organisers, referees, and discussant of the 17th International Conference on Finance and Banking, in particular Daniel Stavárek. We also would like to acknowledge the Reviewers of Review of Economic Perspectives for their careful reading of this paper and helpful suggestions.pt_PT
dc.description.versioninfo:eu-repo/semantics/publishedVersionpt_PT
dc.identifier.doi10.2478/revecp-2020-0007pt_PT
dc.identifier.urihttp://hdl.handle.net/10400.22/19250
dc.language.isoengpt_PT
dc.peerreviewedyespt_PT
dc.publisherSciendopt_PT
dc.relation.publisherversionhttps://sciendo.com/article/10.2478/revecp-2020-0007pt_PT
dc.rights.urihttp://creativecommons.org/licenses/by-nc-nd/4.0/pt_PT
dc.subjectConditional conservatismpt_PT
dc.subjectEconomic conditionspt_PT
dc.subjectIFRSpt_PT
dc.subjectInstitutional factorspt_PT
dc.titleThe effect of economic conditions on accounting conservatism under IFRS in Europept_PT
dc.typejournal article
dspace.entity.typePublication
oaire.citation.endPage169pt_PT
oaire.citation.issue2pt_PT
oaire.citation.startPage137pt_PT
oaire.citation.titleReview of Economic Perspectivespt_PT
oaire.citation.volume20pt_PT
person.familyNamePereira
person.givenNameCláudia
person.identifier.ciencia-idC912-6892-F41A
person.identifier.orcid0000-0002-2643-1824
person.identifier.ridT-5392-2017
person.identifier.scopus-author-id57143563400
rcaap.rightsopenAccesspt_PT
rcaap.typearticlept_PT
relation.isAuthorOfPublicationffd30b67-66d0-4666-85b4-62dd06cd4230
relation.isAuthorOfPublication.latestForDiscoveryffd30b67-66d0-4666-85b4-62dd06cd4230

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