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MEASUREMENT OF THE CONSERVATISM PRINCIPLE AND AN APPLICATION ON PUBLICLY-TRADED COMPANIES

Year 2020, , 1 - 20, 30.03.2020
https://doi.org/10.31460/mbdd.583104

Abstract

The aim of this study is to determine which of the two most commonly used methods in the literature, “Profit/Stock Return” and Accruals/Cash Flows” models better measure the conservatism level of companies. In addition, three different observation periods were used for each model in order to determine which period best represents the level of conservatism. In this context, the conservatism levels of 263 listed companies in BIST between 2004 and 2017 were tested using panel data regression analysis. The research findings show that companies have conservatism practices in three periods according to the Profit/Stock Return model and that the periodic conservatism levels are close to each other, while the Accruals/Cash Flows model shows that they have conservatism practices in only one observation period.

References

  • Acar, D. ve Aktürk, A. 2009. Muhasebede İhtiyatlılık Kavramı ve İMKB Sınai Endeksinde İşlem Gören İşletmelerde İhtiyatlılık Üzerine Bir Araştırma. Afyon Kocatepe Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, 11 (1):77-90.
  • Ahmed, A.S. ve Duellman, S. 2007. Accounting Conservatism and Board of Director Characteristics: An Empirical Analysis. Journal of Accounting and Economicsi, 43 (2–3):411– 437.
  • Ahmed, A.S. ve Duellman, S. 2011. Evidence on the Role of Accounting Conservatism in Monitoring Managers’ Investment Decisions. Accounting & Finance 51 (3): 609– 33.
  • Ahmed, K. ve Henry, D. 2012. Accounting conservatism and voluntary corporate governance mechanisms by Australian firms. Accounting & Finance, 52: 631-662.
  • Ball, R. ve Shivakumar, L. 2006. The Role of Accruals in Asymmetrically Timely Gain and Loss Recognition. Journal of Accounting Research, 44: 207–242.
  • Basu, S. 1997. The Conservatism Principle and the Asymmetric Timeliness of Earnings. Journal of Accounting and Economics, 24 (1): 3–37.
  • Beatty, A., Weber, J. ve Yu, J.J. 2008. Conservatism and Debt. Journal of Accounting and Economics 45 (2–3): 154–74.
  • Beaver, W.H. ve Ryan, S.G. 2005. Conditional and Unconditional Conservatism: Concepts and Modeling. Review of Accounting Studies 10 (2–3): 269–309.
  • Beekes, W., Pope, P. ve Young, S. 2004. The Link between Earnings Timeliness, Earnings Conservatism and Board Composition: Evidence from the UK. Corporate Governance: An International Review 12 (1): 47–59.
  • Bliss, J.H. 1924. Management Through Accounts, The Ronald Press Co. New York.
  • Chen, Q.I., Hemmer, T. ve Zhang, Y.U. N. 2007. On the Relation between Conservatism in Accounting Standards and Incentives for Earnings Management. Journal of Accounting Research, 45 (3): 541–65.
  • Feltham, G.A. ve Ohlson, J.A. 1995. Valuation and Clean Surplus Accounting for Operating and Financial Activities. Contemporary Accounting Research, 11 (2): 689– 731.
  • Fengyi L., Chung-Min W., Tzu-Yi F. ve Jheng-Ci W. 2014. The Relations Among Accounting Conservatism, İnstitutional Investors and Earnings Manipulation,Economic Modelling, 37: 164-174.
  • Financial Accounting Standards Board (FASB) 1975. Accounting for Contingencies. Statement of Financial Accounting Standards, No. 5, FASB, Norwalk, CT.
  • Francis, J.R. ve Martin, X. 2010. Acquisition Profitability and Timely Loss Recognition. Journal of Accounting and Economics, 49 (1): 161–78.
  • García L., J., M., García O., B. ve Penalva, F. 2007. Accounting Conservatism and Corporate Governance. Review of Accounting Studies, 14 (1): 161-201.
  • García L., J., M., García O., B. ve Penalva, F. 2012. Conditional Conservatism and the Limits to Earnings Management. SSRN Electronic Journal
  • Givoly, D. ve Hayn, C. 2000. The Changing Time-Series Properties of Earnings, Cash Flows and Accruals: Has Financial Reporting Become More Conservative? Journal of Accounting and Economics, 29 (3): 287-320
  • Hellman, N. 2008. Accounting Conservatism under IFRS. Accounting in Europe, 5(2): 71–100.
  • Jackson, S.B. ve Liu, X. 2010. The Allowance for Uncollectible Accounts, Conservatism, and Earnings Management. Journal of Accounting Research, 48 (3): 565-601
  • Kao, H., S., ve Chu, T., W. 2016. Audit Committee, Supervisor System and Accounting Conservatism. International Research Journal of Applied Finance. 7 (9): 202-219.
  • Kaytmaz B. Ç., Özkan, S. ve Durak, M. G. 2010. Earnings Conservatism in Pre- and Post- IFRS Periods in Turkey: Panel Data Evidence on the Firm Specific Factors. Journal of Accounting and Management Information Systems, 9 (3): 403-421
  • Khan, M. ve Watts, R.L. 2009. Estimation and Empirical Properties of a Firm-year Measure of Accounting Conservatism. Journal of Accounting and Economics, 48 (2–3): 132-601.
  • Kim, J., Chung, R. ve Firth, M. 2003. Auditor Conservatism, Asymmetric Monitoring, and Earnings Management. Contemporary Accounting Research, 20: 323-359.
  • LaFond, R., ve Watts, R. 2008. The Information Role of Conservatism. The Accounting Review, 83(2): 447-478.
  • Lawrence, A., Sloan, R. ve Sun, Y. 2013. Non-discretionary Conservatism: Evidence and Implications. Journal of Accounting and Economics, 56: 112–33.
  • Lim, R. 2011. Are corporate governance attributes associated with accounting conservatism? Accounting & Finance, 51: 1007-1030
  • Pae, J., Thornton, D. ve Welker, M. 2004. The Link Between Earnings Conservatism and Balance Sheet Conservatism. Queen’s University Working Paper.
  • Ruch, G. ve Taylor G. 2015. Accounting Conservatism: A Review of the Literature. Journal of Accounting Literature, 34: 17-38.
  • Shleifer, A. ve Vishny, R.W. 1997. A Survey of Corporate Governance. Journal of Finance, 52 (2): 737–83.
  • Tuan, K. 2016. Denetim Komitesi Özellikleri ve İhtiyatlılık Arasındaki İlişki: Borsa İstanbul Örneği. Muhasebe ve Denetime Bakış. 15 (47): 115-130.
  • Watts, R.L. 2003. Conservatism in Accounting Part I: Explanations and Implications. Accounting Horizons, 17 (3): 207– 221.
  • Zhe Wang, R., Hogartaigh, C. ve Van, Z. T. 2008. Measures of Accounting Conservatism: A Construct Validity Perspective. Journal of Accounting Literature, 28): 1-60.
  • Zhong, Y. ve Li, W. 2016. Accounting Conservatism: A Literature Review. Australian Accounting Review, 27: 195–213.

İHTİYATLILIK KAVRAMININ ÖLÇÜLMESİ VE BİST’TE İŞLEM GÖREN ŞİRKETLER ÜZERİNE BİR UYGULAMA

Year 2020, , 1 - 20, 30.03.2020
https://doi.org/10.31460/mbdd.583104

Abstract

Bu çalışmanın amacı, literatürde en çok tercih edilen iki yöntem olan “Kar/Hisse Senedi Getirisi” ve “Tahakkuklar/Nakit Akışları” modellerinden hangisinin şirketlerin ihtiyatlılık düzeylerini daha iyi ölçtüğünün tespit edilmesidir. Ayrıca çalışmamızda her bir model için üç farklı gözlem dönemi baz alınarak ihtiyatlılık düzeyini hangi dönemin daha iyi temsil ettiği araştırılmıştır. Bu bağlamda 2004-2017 yılları arasında BİST’te işlem gören 263 şirketin ihtiyatlılık düzeyleri panel veri regresyon analizi kullanılarak test edilmiştir. Araştırma bulguları, şirketlerin Kar/Hisse Senedi Getirisi modeline göre üç dönemde de ihtiyatlı uygulamaları olduğunu ve dönemsel olarak ihtiyatlılık düzeylerinin birbirine yakın olduğunu gösterirken, Tahakkuklar/Nakit Akışları modeline göre sadece tek bir gözlem döneminde ihtiyatlı uygulamalarının olduğunu göstermektedir. 

References

  • Acar, D. ve Aktürk, A. 2009. Muhasebede İhtiyatlılık Kavramı ve İMKB Sınai Endeksinde İşlem Gören İşletmelerde İhtiyatlılık Üzerine Bir Araştırma. Afyon Kocatepe Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, 11 (1):77-90.
  • Ahmed, A.S. ve Duellman, S. 2007. Accounting Conservatism and Board of Director Characteristics: An Empirical Analysis. Journal of Accounting and Economicsi, 43 (2–3):411– 437.
  • Ahmed, A.S. ve Duellman, S. 2011. Evidence on the Role of Accounting Conservatism in Monitoring Managers’ Investment Decisions. Accounting & Finance 51 (3): 609– 33.
  • Ahmed, K. ve Henry, D. 2012. Accounting conservatism and voluntary corporate governance mechanisms by Australian firms. Accounting & Finance, 52: 631-662.
  • Ball, R. ve Shivakumar, L. 2006. The Role of Accruals in Asymmetrically Timely Gain and Loss Recognition. Journal of Accounting Research, 44: 207–242.
  • Basu, S. 1997. The Conservatism Principle and the Asymmetric Timeliness of Earnings. Journal of Accounting and Economics, 24 (1): 3–37.
  • Beatty, A., Weber, J. ve Yu, J.J. 2008. Conservatism and Debt. Journal of Accounting and Economics 45 (2–3): 154–74.
  • Beaver, W.H. ve Ryan, S.G. 2005. Conditional and Unconditional Conservatism: Concepts and Modeling. Review of Accounting Studies 10 (2–3): 269–309.
  • Beekes, W., Pope, P. ve Young, S. 2004. The Link between Earnings Timeliness, Earnings Conservatism and Board Composition: Evidence from the UK. Corporate Governance: An International Review 12 (1): 47–59.
  • Bliss, J.H. 1924. Management Through Accounts, The Ronald Press Co. New York.
  • Chen, Q.I., Hemmer, T. ve Zhang, Y.U. N. 2007. On the Relation between Conservatism in Accounting Standards and Incentives for Earnings Management. Journal of Accounting Research, 45 (3): 541–65.
  • Feltham, G.A. ve Ohlson, J.A. 1995. Valuation and Clean Surplus Accounting for Operating and Financial Activities. Contemporary Accounting Research, 11 (2): 689– 731.
  • Fengyi L., Chung-Min W., Tzu-Yi F. ve Jheng-Ci W. 2014. The Relations Among Accounting Conservatism, İnstitutional Investors and Earnings Manipulation,Economic Modelling, 37: 164-174.
  • Financial Accounting Standards Board (FASB) 1975. Accounting for Contingencies. Statement of Financial Accounting Standards, No. 5, FASB, Norwalk, CT.
  • Francis, J.R. ve Martin, X. 2010. Acquisition Profitability and Timely Loss Recognition. Journal of Accounting and Economics, 49 (1): 161–78.
  • García L., J., M., García O., B. ve Penalva, F. 2007. Accounting Conservatism and Corporate Governance. Review of Accounting Studies, 14 (1): 161-201.
  • García L., J., M., García O., B. ve Penalva, F. 2012. Conditional Conservatism and the Limits to Earnings Management. SSRN Electronic Journal
  • Givoly, D. ve Hayn, C. 2000. The Changing Time-Series Properties of Earnings, Cash Flows and Accruals: Has Financial Reporting Become More Conservative? Journal of Accounting and Economics, 29 (3): 287-320
  • Hellman, N. 2008. Accounting Conservatism under IFRS. Accounting in Europe, 5(2): 71–100.
  • Jackson, S.B. ve Liu, X. 2010. The Allowance for Uncollectible Accounts, Conservatism, and Earnings Management. Journal of Accounting Research, 48 (3): 565-601
  • Kao, H., S., ve Chu, T., W. 2016. Audit Committee, Supervisor System and Accounting Conservatism. International Research Journal of Applied Finance. 7 (9): 202-219.
  • Kaytmaz B. Ç., Özkan, S. ve Durak, M. G. 2010. Earnings Conservatism in Pre- and Post- IFRS Periods in Turkey: Panel Data Evidence on the Firm Specific Factors. Journal of Accounting and Management Information Systems, 9 (3): 403-421
  • Khan, M. ve Watts, R.L. 2009. Estimation and Empirical Properties of a Firm-year Measure of Accounting Conservatism. Journal of Accounting and Economics, 48 (2–3): 132-601.
  • Kim, J., Chung, R. ve Firth, M. 2003. Auditor Conservatism, Asymmetric Monitoring, and Earnings Management. Contemporary Accounting Research, 20: 323-359.
  • LaFond, R., ve Watts, R. 2008. The Information Role of Conservatism. The Accounting Review, 83(2): 447-478.
  • Lawrence, A., Sloan, R. ve Sun, Y. 2013. Non-discretionary Conservatism: Evidence and Implications. Journal of Accounting and Economics, 56: 112–33.
  • Lim, R. 2011. Are corporate governance attributes associated with accounting conservatism? Accounting & Finance, 51: 1007-1030
  • Pae, J., Thornton, D. ve Welker, M. 2004. The Link Between Earnings Conservatism and Balance Sheet Conservatism. Queen’s University Working Paper.
  • Ruch, G. ve Taylor G. 2015. Accounting Conservatism: A Review of the Literature. Journal of Accounting Literature, 34: 17-38.
  • Shleifer, A. ve Vishny, R.W. 1997. A Survey of Corporate Governance. Journal of Finance, 52 (2): 737–83.
  • Tuan, K. 2016. Denetim Komitesi Özellikleri ve İhtiyatlılık Arasındaki İlişki: Borsa İstanbul Örneği. Muhasebe ve Denetime Bakış. 15 (47): 115-130.
  • Watts, R.L. 2003. Conservatism in Accounting Part I: Explanations and Implications. Accounting Horizons, 17 (3): 207– 221.
  • Zhe Wang, R., Hogartaigh, C. ve Van, Z. T. 2008. Measures of Accounting Conservatism: A Construct Validity Perspective. Journal of Accounting Literature, 28): 1-60.
  • Zhong, Y. ve Li, W. 2016. Accounting Conservatism: A Literature Review. Australian Accounting Review, 27: 195–213.
There are 34 citations in total.

Details

Primary Language Turkish
Subjects Business Administration
Journal Section MAIN SECTION
Authors

Gökhan Özer

Abdullah Kürşat Merter 0000-0001-6874-1890

Publication Date March 30, 2020
Submission Date June 27, 2019
Published in Issue Year 2020

Cite

APA Özer, G., & Merter, A. K. (2020). İHTİYATLILIK KAVRAMININ ÖLÇÜLMESİ VE BİST’TE İŞLEM GÖREN ŞİRKETLER ÜZERİNE BİR UYGULAMA. Muhasebe Bilim Dünyası Dergisi, 22(1), 1-20. https://doi.org/10.31460/mbdd.583104