The Information Role of Conservatism

By Ryan Lafond, Ross L. Watts. 2008

1,065 citations recorded by the source corpus.

View Paper: https://www.semanticscholar.org/paper/6db466142eb079463e79ba6d5bede043242c8920

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Citations in the corpus

How has the financial crisis affected earnings management? A European study (2015, background): “Moreover, LaFond and Watts (2008) argue that conservatism reduces the ability of managers to manipulate and overstate financial performance.”
Towards an Understanding of the Role of Standard Setters in Standard Setting (2013, background): “On the other hand, firms themselves have incentives to prefer “reliability” to “relevance,” for example, corporations can benefit from accounting conservatism (e.g., through lower capital costs; LaFond and Watts, 2008; Zhang, 2008).”
The role of information asymmetry and financial reporting quality in debt trading: Evidence from the secondary loan market $ (2008, positive): “LaFond and Watts (2008) and Khan and Watts (2007) show that conservative reporting is an equilibrium response to mitigate agency problems arising from information asymmetry.”
Earnings Restatements and Differential Timeliness of Accounting Conservatism (2012, positive): “Following LaFond and Roychowdhury (2008) and LaFond and Watts (2008), we control for variation of conservatism due to firm size, leverage, market-to-book ratio, and litigation risk.”
Internal Controls and Conditional Conservatism (2011, methodology): “Finally, we include SPREAD (the bid-ask spread scaled by the midpoint of the spread) to proxy for information asymmetry that is positively related to conservatism (LaFond and Watts 2008).”
Corporate governance and the information environment: Evidence from state antitakeover laws ☆ (2012, methodology): “PIN has been widely used in recent studies as a proxy for information asymmetry (e.g., LaFond and Watts, 2008; Mohanram and Rajgopal, 2009; Armstrong, Core, Taylor, and Verrecchia, 2011).”
Estimation and Empirical Properties of a Firm-Year Measure of Accounting Conservatism (2009, methodology): “LaFond and Watts (2008) predict that increases in information asymmetry between parties to the firm lead increases in conservatism, rather than conservatism leading information asymmetry.5 Our event study results are consistent with this argument.”
Earnings quality in ex‐post failed firms (2009, background): “tion of the problems derived from information asymmetries (LaFond and Watts, 2008), or improvements in contracting ef ficiency (Ball et al.”
Corporate Governance and Firm-Specific Stock Price Crashes (2016, neutral): “outside investors [Watts (2003); LaFond and Watts (2008); among others]. Regarding the other three accounting opacity attributes, namely OPAQUE, %AUD_IND and 5 Following Morck et al. (1988) and McConnell and Servaes (1990) we also include the squared term of insider ownership in the regression analy”
Product market competition and conditional conservatism (2014, positive): “Prior studies show large firms tend to be less conditionally conservative than small firms (Basu 2001; Giner and Rees 2001; Givoly et al. 2007; LaFond and Watts 2008).”
Accounting Conservatism and Stock Price Crash Risk: Firm-level Evidence. (2012, positive): “More recently, LaFond and Watts (2008) have analyzed on equity market demand for conservatism.”