search query: @author Kim, J.-B. / total: 3
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| Author: | Chung, R. Firth, M. Kim, J.-B. |
| Title: | Auditor Conservatism and Reported Earnings |
| Journal: | Accounting and Business Research
2003 : VOL. 33:1, p. 19-32 |
| Index terms: | AUDITORS EARNINGS ACCOUNTING AUDITING |
| Language: | eng |
| Abstract: | Conservatism is an underlying concept of financial accounting. The authors argue that the auditor forces conservatism on client companies and that the amount of conservatism depends on the economic performance of the company and on the type of audit firm. In particular, the authors contend that Big Six audit clients use more conservative accounting than non-Big Six audit clients when the clients are performing poorly. The authors attribute the more conservative accounting used by Big Six audit clients to the influence of the audit firm. By regressing excess earnings to price ratios on excess stock returns and other variables, the authors find evidence consistent with this hypothesis. |
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