The Link Between Earnings Conservatism and the Price to Book Ratio

By Jinhan Pae, Daniel B. Thornton, Michael Welker. 2005

175 citations recorded by the source corpus.

View Paper: https://www.semanticscholar.org/paper/7fde20a73bea7066fbb7baf4bf23b5e00ed3fbbe

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Citations in the corpus

Evidence on the Role of Accounting Conservatism in Monitoring Managers' Investment Decisions (2011, methodology): “CFO, prior to industry differencing (unreported), are consistent with the levels reported in Richardson et al. (2005) despite slightly different time periods.”
The pricing of conservative accounting and the measurement of conservatism at the firm-year level (2010, unknown): “8 Some studies refer to differential timeliness as ‘‘earnings conservatism’’ or ‘‘conditional conservatism’’ as compared with ‘‘balance sheet conservatism’’ or ‘‘unconditional conservatism’’ (as reflected in the market-to-book ratio) (e.g., Beaver and Ryan 2005; Pae et al. 2005).”
Accounting Conservatism and Board of Director Characteristics: an Empirical Analysis (2007, unknown): “This is referred to as the ‘starting point problem’ (Pae et al., 2005).”
Identifying Conditional Conservatism (2006, background): “Second, conditional conservatism is preempted (i.e. applied less frequently and/or in smaller amounts) by unconditional conservatism (Pope and Walker, 2003; Beaver and Ryan, 2005; Liu and Thornton, 2005; Pae et al., 2005; Roychowdhury and Watts, 2005; Givoly et al., 2006).”
The role of information asymmetry and financial reporting quality in debt trading: Evidence from the secondary loan market $ (2008, unknown): “It is important to note that prior research suggests that when the earnings–returns association is employed to investigate differences in earnings timeliness it is necessary to control for the market-to-book ratio (Pae et al., 2005).”
The Information Role of Conservatism (2008, background): “This effect causes the annual Basu coefficient to understate the degree of conservatism (Pae et al. 2005).”
Econometrics of the Basu Asymmetric Timeliness Coefficient and Accounting Conservatism (2013, unknown): “…is not a valid measure of conservatism (Dietrich et al., 2007), that it is unduly affected by variables such as the book-to-market ratio (Pae et al., 2005; Givoly et al., 2007; Roychowdhury and Watts, 2007), and that Basu coefficients should be avoided by researchers (Patatoukas and…”
Understanding Earnings Quality: A Review of the Proxies, Their Determinants and Their Consequences (2010, methodology): “Pae et al. (2005), also using the BKR metrics, find that firm-level price-to-book ratios are a determinant of timely loss recognition and that the negative association is correlated with the accrual component of earnings.”