Executive equity incentives and conditional conservatism: Evidence from SFAS 142 goodwill write-offs

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dc.contributor Aalto-yliopisto fi
dc.contributor Aalto University en
dc.contributor.author Saloniemi, Sami
dc.date.accessioned 2016-06-14T06:01:04Z
dc.date.available 2016-06-14T06:01:04Z
dc.date.issued 2016
dc.identifier.uri https://aaltodoc.aalto.fi/handle/123456789/20700
dc.description.abstract Objectives of the study Following Basu's (1997) pioneering research, I adopted the Basu coefficient to measure conditional conservatism (among others, Ball et al., 2003; Ball et al., 2000; Ball et al., 2005; Ball and Shivakumar 2005; Jarva, 2009, 2014;). Basu uses "negative and positive unexpected annual stock returns to proxy for 'bad news' and 'good news'. More specifically, I use this measure to examine the roles of conditional conservatism and executive equity incentives in executives´ choice of recognizing goodwill write-offs. The motivation of this study comes from the debate surrounding goodwill write-offs, which centered on whether managerial discretion allowed by United States Generally Accepted Accounting Principles (US GAAP) could lead to biased decision making in goodwill write-offs. I contribute to existing research by investigating Research method and data Sample of firms include Standard & Poor's (S&P) 500 index, S&P Midcap 400 index, and S&P Smallcap 600 index constituents from 1992 to 2010. The initial data contains 59 200 observations. The data used to examine the conservatism, executive equity incentives and goodwill write-offs is sourced from several sources within the WRDS database. Asymmetric timeliness(AT) of the earnings are analyzed with OLS regressions and SFAS 142 goodwill write-offs are analyzed with logistic regression. Findings of the study The results provide some new support for the claim that that company holding lower sensitivity of executive wealth to stock price have greater AT than company having higher sensitivity of executive wealth to stock price. However, the result indicates that conservatism and executive equity incentives do not seem to play an active monitoring role in executives´ decisions to report SFAS 142 goodwill write-offs. en
dc.format.extent 56
dc.language.iso en en
dc.title Executive equity incentives and conditional conservatism: Evidence from SFAS 142 goodwill write-offs en
dc.type G2 Pro gradu, diplomityö fi
dc.contributor.school Kauppakorkeakoulu fi
dc.contributor.school School of Business en
dc.contributor.department Laskentatoimen laitos fi
dc.contributor.department Department of Accounting en
dc.subject.keyword accounting
dc.subject.keyword laskentatoimi
dc.identifier.urn URN:NBN:fi:aalto-201609083410
dc.type.dcmitype text en
dc.programme.major Laskentatoimi fi
dc.programme.major Accounting en
dc.type.ontasot Pro gradu tutkielma fi
dc.type.ontasot Master's thesis en
dc.subject.helecon laskentatoimi
dc.subject.helecon accounting
dc.subject.helecon liikearvo
dc.subject.helecon goodwill
dc.subject.helecon johtajat
dc.subject.helecon managers
dc.subject.helecon johtaminen
dc.subject.helecon management
dc.subject.helecon kannustaminen
dc.subject.helecon incentives
dc.ethesisid 14375
dc.date.dateaccepted 2016-04-13
dc.location P1 I

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