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臺大管理論叢
第
27
卷第
4
期
233
Accounting Conservatism: A Review of the Research Based on Data
from Asian Countries
1. Introduction
This paper reviews studies on the effects of accounting conservatism that used data
from Taiwan and other Asian countries and were published between 2000 and 2015 in
accounting journals listed in Rank “A” Journals of the Ministry of Science and Technology,
the Taiwan Social Science Citation Index (TSSCI), and the Taiwan Accounting Review, as
well as in other non-TSSCI journals. We attempt taxonomy of the extant literature on
accounting conservatism and suggest six categories of research: the effects of conservatism
on financial statement numbers, on equity markets, on debt markets, on corporate
governance and compensation, and on regulation and litigation. We also discuss possible
future research opportunities. In May of 2015, the International Accounting Standards Board
(IASB) published for public comment an Exposure Draft proposing a revised Conceptual
Framework for Financial Reporting which reintroduces the concept of “prudence” into the
framework. This signifies the importance of research on accounting conservatism.
2. Definitions of Conservatism, Empirical Models of Conservatism,
Effects of Conservatism on Financial Statement Numbers
Accounting conservatism is defined in several ways. Ball and Shivakumar (2005) deem
that conservatism can be divided into two distinct concepts: unconditional conservatism and
conditional conservatism. Unconditional conservatism, also called ex-ante conservatism, is
an accounting method which consistently under-recognizes the value of net assets and does
not depend on economic news. In contrast, conditional conservatism, or ex-post
conservatism, is an accounting method that asymmetrically recognizes economic news by
incorporating in a firm’s financial statements negative news associated with the firm’s future
losses in earnings more promptly than positive news associated with future gains.
Taychang Wang
, Professor, Department of Accounting, National Taiwan University
Hsiou-Wei Lin
, Professor, Department of International Business, National Taiwan University/
Professor, Department of International Business, Tunghai University
Wen-Hsin Hsu
, Professor, Department of Accounting, National Taiwan University
Han Chung Chen
, Ph. D. Student, Department of Accounting, National Taiwan University
Chiawen Liu
, Professor, Department of Accounting, National Taiwan University