NDLI: Publicly traded versus privately held: implications for conditional conservatism in bank accounting

Content Provider	Springer Nature Link
Author	Craig Nichols, D. Wahlen, James M. Wieland, Matthew M.
Copyright Year	2008
Abstract	Compared with privately held banks, publicly traded banks face greater agency costs because of greater separation of ownership and control but enjoy greater benefits from access to the equity capital market. Differences in control and capital market access influence public versus private banks’ accounting. We predict and find that public banks exhibit greater degrees of conditional conservatism (asymmetric timeliness of the recognition of losses versus gains in accounting income) than private banks. We predict and find that public banks recognize more timely earnings declines, less timely earnings increases, and larger and more timely loan losses. Although public ownership gives managers greater ability and incentive to exercise income-increasing accounting, our findings show that the demand for conservatism dominates within public banks and that the demand for conservatism is greater among public banks than private banks. Our results provide insights for accounting and finance academics, bank managers, auditors, and regulators concerning the effects of ownership structure on conditional conservatism in banks’ financial reporting.
Starting Page	88
Ending Page	122
Page Count	35
File Format	PDF
ISSN	13806653
Journal	Review of Accounting Studies
Volume Number	14
Issue Number	1
e-ISSN	15737136
Language	English
Publisher	Springer US
Publisher Date	2008-10-25
Publisher Place	Boston
Access Restriction	One Nation One Subscription (ONOS)
Subject Keyword	Conservatism Private and public banks Agency costs Control Asymmetric timeliness Finance /Banking Public Finance & Economics Accounting/Auditing
Content Type	Text
Resource Type	Article
Subject	Accounting

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1	Ministry of Education (GoI), Department of Higher Education	Sanctioning Authority	https://www.education.gov.in/ict-initiatives
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4	Project PI / Joint PI	Principal Investigator and Joint Principal Investigators of the project	Dr. B. Sutradhar bsutra@ndl.gov.in Prof. Saswat Chakrabarti will be added soon
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