The Relevance of the Value Relevance Literature for Financial Accounting Standard Setting

By Robert W. Holthausen, Ross L. Watts. 2001

1,919 citations recorded by the source corpus.

Subfields: Accounting, Management Information Systems, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/0a1c6dad93f743e6f6a10130cf3c4ade8838e8a3

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Citations in the corpus

Discussion of an Economic Framework For Conservative Accounting and Bushman and Piotroski (2006) (2006, background): “4 Holthausen and Watts (2001) note that informational efficiency is neither a necessary nor sufficient condition for accounting reports to be useful or efficient for contracting purposes.”
Does fair value accounting for non-financial assets pass the market test? (2013, neutral): “This is consistent with the incremental costs of obtaining reliable fair value estimates for financial reporting purposes being low when they are already produced for financing purposes (Holthausen and Watts 2001).”
Beating Earnings Benchmarks and the Cost of Debt (2008, background): “Holthausen and Watts (2001, 26) point out that “it is not apparent that the relevance of a given number would be the same for equity investors and lenders,” and call for more research into how accounting information is utilized by financial statement users other than equity investors.1 This study…”
Internal Controls and Conditional Conservatism (2011, background): “…because it has been argued to provide several governance benefits, such as reducing agency conflicts and improving managerial investment decisions (Holthausen and Watts 2001; Watts 2003; Ball and Shivakumar 2005), enhancing the efficiency of debt contracts (Ahmed et al. 2002; Zhang 2008), and…”
The Implications of Unverifiable Fair-Value Accounting: Evidence from the Political Economy of Goodwill Accounting (2008, neutral): “Holthausen and Watts (2001) argue that fair values when not based on actively traded market prices, i.”
Has goodwill accounting gone bad? (2017, background): “Because these estimates are not based on actively traded market prices, they are not verifiable and hence are open to considerable manipulation (Holthausen and Watts, 2001).”
The Value Relevance of Financial Accounting Information in a Transition Economy: The Case of the Czech Republic (2005, background): “Holthausen and Watts (2001) raised doubts about the motivation of value relevance studies.”
What Has the Invisible Hand Achieved (2006, background): “Informal and formal evidence (Holthausen and Watts, 2001) suggests US financial statements were conservative before the Securities Acts as expected from the contracting and corporate governance forces acting in the market.”
Asymmetric Timeliness of Earnings, Market-to-Book and Conservatism in Financial Reporting (2007, neutral): “Instead, it is more concerned with the valuation and distribution of the firm’s resources and consequently, recognition of verifiable increases in those resources (Holthausen and Watts, 2001, and Watts, 2003a).”
Implications for GAAP from an Analysis of Positive Research in Accounting (2010, methodology): “In particular, certain items that would be included as income under clean surplus accounting are unlikely to provide useful information for managerial performance measurement purposes (Holthausen and Watts, 2001, pp. 43–49).”
Market Pricing of Banks’ Fair Value Assets Reported under Sfas 157 During the 2008 Economic Crisis (2009, background): “Finally, we control for the possibility that the 13 We note that typical econometric limitations (e.g., possibility of omitted correlated variables and imposition of linearity in the regression specification) might lead to biases in the coefficient (Holthausen and Watts, 2001).”
Accounting conservatism and corporate governance (2009, background): “Classic agency theory models these relationships as being fraught with conflicting interests (Berle and Means 1932; Jensen and Meckling 1976; Jensen 1986).”
The Information Role of Conservatism (2008, background): “…capturing conservatism, Roychowdhury and Watts (2007) demonstrate that this negative association is due to relatively greater dependence of short period Basu estimates on the composition of MB at the beginning of the estimation period. assets with error (see Holthausen and Watts, 2001, pp. 32-36).”