Accounting Conservatism and the Efficiency of Debt Contracts

By Frank Gigler, Chandra Kanodia, Haresh Sapra, Raghu Venugopalan. 2009

335 citations recorded by the source corpus.

Subfields: Accounting, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/b871935290987c25c7694ad264781b1a21cecfc1

How researchers see this paper

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

In Accounting

1. Regina Wittenberg-Moerman
2. Anna M. Costello
3. Martin Walker
4. Christopher S. Armstrong
5. W. Guay
6. Joseph P. Weber
7. Araceli Mora
8. Ningzhong Li

In Strategy and Management

1. Anna M. Costello
2. Regina Wittenberg-Moerman
3. Christopher S. Armstrong
4. Martin Walker
5. W. Guay
6. Joseph P. Weber
7. Araceli Mora
8. Ningzhong Li

Citations in the corpus

• Accounting Conservatism and Debt Contracts: Efficient Liquidation and Covenant Renegotiation (2013, background): “(10)Gigler et al. (2009) introduce an additional notion of conservatism which allows the effect of δ on the conditional probability to differ for different realized types and find the same conclusion using either form of conservatism definition.”
• The implications of research on accounting conservatism for accounting standard setting (2015, background): “In contrast to Gigler et al. (2009), other analytical papers describe logically possible worlds in which conditional conservatism can be positively beneficial.”
• The Information Role of Audit Opinions in Debt Contracting (2016, background): “To assess the total effect on the contract design of an MAO, it is important to consider the many different contract provisions from which lenders can choose (Gigler et al., 2009).”
• Negotiated Measurement Rules in Debt Contracts (2010, positive): “(Smith and Warner, 1979) 20The model setup is similar to Gigler et al. (2007).”
• The Role of Information and Financial Reporting in Corporate Governance and Debt Contracting (2010, background): “quality borrowers tend to issue commercial paper and lower quality borrowers tend to borrow 82 Gigler et al. (2009) reach the slightly stronger conclusion that conservatism reduces the efficiency of debt contracts.”
• Accounting Information in Financial Contracting: The Incomplete Contract Theory Perspective (2016, neutral): “Gigler et al. (2009) consider what may be thought of as a benchmark case, where they effectively assume away any contractual incompleteness, distortions of accounting information, agency or information asymmetry problems.”
• The Benefits of Conservative Accounting to Shareholders: Evidence from the Financial Crisis (2013, neutral): “Consequently, conservatism could potentially cause inefficient resource allocations and reduction of firm value (e.g., Penman and Zhang 2002; Lev et al. 2005; Guay and Verrecchia 2006; Gigler et al. 2009).”
• The Impact of Financial Reporting Quality on Debt Contracting: Evidence from Internal Control Weakness Reports (2011, positive): “The importance of this test is supported by Gigler et al. [2009] who show that when testing the effect of financial reporting quality on debt contractual terms, the trade-off between the interest rate and covenants should be explicitly considered.”