Temporal variation and cross-sectional differences of accounting conservatism in emerging countries

Maha Khalifa, Hakim Ben Othman, Khaled Hussainey

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    Prior research reported that accounting conservatism has increased over time in developed countries. In this paper, we try to examine the time-series extent and shift of accounting conservatism in emerging countries over the period 2000-2012. We also analyze differences in conservatism level across countries, regions, legal regimes and industries and the effect of size, Market-to-Book and leverage on the degree of conservatism. We use a set of measures to assess the degree of conservatism. These include changing time-series properties of profitability, earnings, cash flows, accruals components, asymmetric timeliness, Market-to-Book ratio. We find that the degree of conservatism is declined during the period between 2000 and 2007 and increased over the period 2007-2012. In addition, we observe significant differences in accounting conservatism between countries, across regions and industries.
    Original languageEnglish
    Pages (from-to)45–69
    Number of pages25
    JournalInternational Journal of Accounting, Auditing and Performance Evaluation
    Issue number1
    Early online date1 Jan 2016
    Publication statusPublished - Jan 2016


    • Conservatism
    • loss frequency
    • earnings
    • accruals
    • market-to-book
    • emerging markets
    • time variation
    • cross-section differences


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