Asymmetric Timeliness of Earnings, Market-to-Book and Conservatism in Financial Reporting

By S. Roychowdhury, Ross L. Watts. 2007

631 citations recorded by the source corpus.

Subfields: Accounting, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/0327446be51efdd6b8c68c513921d39663fb2b4c

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

In Strategy and Management

Citations in the corpus

The Economic Determinants of Conditional Conservatism (2009, neutral): “…(2004), García Lara, García Osma and Mora (2005), Huijgen and Lubberink (2005), Gassen, Fulbier and Sellhorn (2006), Bushman and Piotroski (2006), Roychowdhury and Watts (2007), Ball et al. (2008), LaFond and Watts (2008) and García Lara et al. (2008) among others. that the Basu measure…”
The implications of research on accounting conservatism for accounting standard setting (2015, background): “Garcı́a Lara and Mora (2004), Gassen et al. (2006) and Roychowdhury and Watts (2007) provided empirical evidence that supports this insight.”
Accounting conservatism and corporate governance (2009, methodology): “However, if we repeat the estimation of these regressions without including the inverse Mills ratios or using Fama and MacBeth (1973) mean annual regressions, the inferences do not change.16 The same is true when we employ the methodology of Roychowdhury and Watts (2006).”
Evidence on the use of unverifiable estimates in required goodwill impairment (2012, neutral): “If the rents that goodwill represents are generated jointly by the units, any allocation is arbitrary and there is no way to meaningfully allocate goodwill: any one allocation scheme is as good as another (Watts 2003; Roychowdhury and Watts, 2007).”
The role of information asymmetry and financial reporting quality in debt trading: Evidence from the secondary loan market $ (2008, neutral): “This reduces managers’ incentives to transfer wealth to themselves either from debt holders or from the firm as a whole (Watts, 2003a, b; LaFond and Roychowdhury, 2008; Roychowdhury and Watts, 2007).”
Does Accounting Quality Change Following a Switch from U.S. GAAP to IFRS? Evidence from Germany (2012, neutral): “Consistent with the debt contracting demand for accounting conservatism (Watts, 2003), the coefficient on LEV*R*DR is positive and significant, and the coefficient on MB*R*DR is negative, which is consistent with the arguments of Roychowdhury and Watts (2007).”
Acquisition Profitability and Timely Loss Recognition (2010, neutral): “In most of the analyses the two measures yield similar results.3 Roychowdhury and Watts (2007) note that the beginning composition of equity value can affect timely loss recognition because the past timeliness of earnings with respect to returns may affect the future timeliness of earnings over…”
Rating the Ratings: How Good are Commercial Governance Ratings? (2010, background): “However, since market-to-book ratios (or their inverse) are used as proxies for risk factors (Fama and French, 1993), accounting conservatism (Roychowdhury and Watts, 2007), and investment opportunity set or future growth opportunities (Adam and Goyal, 2008), it is unclear whether…”
The Information Role of Conservatism (2008, methodology): “In doing so we rely on the arguments and evidence in Roychowdhury and Watts (2007) that neither increases nor decreases in growth options are recorded, at least in our sample period, which is prior to the SFAS 142 changes in the standards for goodwill impairment.”
On Estimating Conditional Conservatism (2011, methodology): “We find that the coefficient estimates for contemporaneous unexpected earnings decrease in firm size, and increase in book-to-market and leverage, consistent with prior literature (Roychowdhury and Watts, 2007; Khan and Watts, 2009) and with the analytical arguments in Ball, Kothari and Nikolaev (20”
Product market competition and conditional conservatism (2014, neutral): “Thus, monopoly rents create an errors-in-variables problem in tests of conditional conservatism (Ball and Shivakumar 2006; Roychowdhury and Watts 2007).”