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This study aims to examine the impact of various dimensions of product market competition on accounting conservatism particularly in the wake of regulatory changes and varying ownership structures in China.

This study examines impact of product market competition on accounting conservatism by using conservatism measure of Khan and Watts (2009) and measures for important dimensions of competition such as competition intensity, non-price competition and competition from existing rivals and potential entrants.

The findings suggest that competition intensity and non-price competition result in higher conservatism. This study also advocates that industry leaders exhibit lower conservatism as compared to industry followers. Moreover, the authors document positive association between competition from existing/potential rivals and accounting conservative. These findings reveal that regulatory changes (International Financial Reporting Standards adoption) influence the effect of various dimensions of competition on conservatism. The authors also propose that financial reporting practices of state-owned enterprises are not influenced by competition. However, competition affects financial reporting (conservatism) when institutional or managerial ownership is higher.

The authors document that strategic considerations shape conservative financial reporting decisions of the managers. This study also advocates that when regulatory changes affect the influence of competitive pressure on the conservative reporting decisions of the mangers. Findings also suggest that unlike state ownership, institutional as well as managerial ownership affects the influence of competition on managerial decisions like conservative financial reporting. These results are robust to various alternative measures of conservatism.

The purpose of this paper is to identify means of better associating executive remuneration with managerial decision making and firm performance.

The authors evaluate the influence of conditional accounting conservatism on CEO compensation. The authors focus particularly on the ex ante pay-for-performance sensitivity (PPS) of CEO stock option grants. The empirical method used is panel data regression.

The authors find that accounting conservatism is positively related to the PPS of CEO option-based compensation. The effects of accounting conservatism on the PPS of options are more significant for firms with relatively weaker corporate governance and for the period before the introduction of FAS 123R. The findings suggest that directors reward CEOs for adopting accounting conservatism, both in general terms and incrementally, and that rewards are channelled through incentive-linked compensation. The results are also consistent with the view that accounting conservatism compliments other mechanisms, such as corporate governance, in reducing information asymmetry and agency problems between managers and shareholders and other stakeholders.

This paper provides a number of important contributions to the literature. It is the first to identify a relationship between accounting conservatism and option-based CEO compensation, which has important potential contracting and enforcement implications due to the incomplete nature of option contracts and the reward and risk attributes of CEOs. This paper is also the first to analyse the association between conditional accounting conservatism and CEO compensation at the firm–year level, by employing the firm–year conservatism score approach proposed by Khan and Watts (2009). This provides for greater insight regarding the interaction between accounting conservatism and other firm-specific elements than is otherwise obtainable from an overall firm or year interpretations derived from the traditional Basu (1997) asymmetric timeliness model approach. Furthermore, this paper also provides a comparison of the relative association of accounting conservatism on both explicit and implicit forms of CEO compensation for the same firm sample. This allows for the assessment of whether accounting conservatism relates differently to incentive-based CEO remuneration relative to ex post CEO compensation outcomes.

The authors examine the role of CEO political ideology in the credit rating process.

This study adopts a quantitative method with panel data regressions using a sample of 5,211 observations from S&P 500 firms from 2001 to 2012.

The authors find that firms run by Republican-leaning CEOs, who tend to have conservative political ideologies, enjoy more favorable credit ratings than firms run by Democratic-leaning CEOs. In addition, the association between CEO political ideology and credit ratings is more pronounced for firms with high operating uncertainty, low capital intensity, high growth potential, weak corporate governance and low financial reporting quality. Finally, the authors find that CEO political ideology affects a firm's cost of debt incremental to credit ratings, consistent with debt investors incorporating CEO political ideology in their pricing decisions.

Leveraging CEO political ideology, the authors document that credit rating agencies incorporate managerial conservatism in their credit rating decisions. This finding suggests that CEO political ideology serves as a meaningful signal for managerial conservatism.

The study suggests that credit rating agencies incorporate CEO political ideology in their credit rating process. Other capital market participants such as auditors and retail investors can also use CEO political ideology as a proxy for managerial conservatism when evaluating firms.

The paper carries practical implications for practitioners, firm executives and regulators. The results on the association between CEO political ideology and credit ratings suggest that other financial institutions could also incorporate CEO political ideology in their evaluation in their evaluation of firms. For example, when evaluating audit risk and determining audit pricing, auditors may add CEO political ideology as a risk factor. For firms, especially those that have Democratic-leaning CEOs, the authors suggest that they could reduce the unfavorable effect of CEO political ideology on credit ratings by improving their corporate governance and financial reporting quality, as demonstrated in the cross-sectional analyses. Finally, this study shows that CEO political ideology, as measured by CEOs' political contributions, is closely related to a firm's credit ratings. This finding may inform regulators that greater transparency for CEOs' political contributions is needed as information on contributions could help capital market participants perform risk analyses for firms.

Credit rating agencies release their research methodologies for determining corporate credit ratings and identify managerial conservatism as an important factor that affects their risk assessments. The extant literature, however, has not empirically investigated the relation between credit ratings and managerial conservatism, which, according to behavioral consistency theory, can be proxied by CEO political ideology. This study provides novel empirical evidence that identifies CEO political ideology as an important input factor in the credit rating process.

This study aims to examine the diametrically opposite effects of probabilistic (risk) and nonprobabilistic uncertainty (ambiguity) on accounting conservatism.

This study uses panel regression models with year and industry-fixed effects. It uses financial and market data from the communication and energy sectors of 24 countries, encompassing 1,946 firms and 5,838 firm-year observations.

The study reveals that conservatism is a rational response to risk. However, in the presence of higher ambiguity where uncertainty exceeds firm control and outcomes become unpredictable, management reduces conservative accounting practices. Robustness tests support the validity of these findings across different institutional frameworks, agency risks, sample selection and heterogeneity.

This study contributes to the existing literature by exploring the contrasting effects of risk and ambiguity on accounting conservatism. It enhances the understanding of how various institutional factors influence the asymmetric recognition of bad news compared to good news under conditions of uncertainty.

By understanding the role of accounting conservatism in responding to uncertainties, regulators can develop more informed and effective policies that align with the dynamic nature of business environments.

This research provides novel and original ideas suggesting that the change in accounting conservatism is contingent upon the firms’ ambiguity or risk.

This study aims to assess the relationship between managerial entrenchment and accounting conservatism in Iran.

To test hypotheses, all listed companies on the Tehran Stock Exchange during 2013–2018 (six years) that qualified were selected. Given the defined limitations of the study, a total of 120 firms with 720 year-observations was selected. After collecting data and figures, they were analyzed using EViews software. Having presented the inferential model tests, the panel data with fixed effects model is chosen.

The study results indicate a positive and significant relationship between managerial entrenchment and unconditional conservatism presented in the income statement. Moreover, the authors find a meaningful relationship between managerial entrenchment and unconditional conservatism about the balance sheet.

Managers will be more aware of the positive consequences of employment optimal corporate governance such as conservative accounting. Such corporate governance is likely to serve their interest in the long run by providing positive signals to the equity owners and board of directors.

By assessing conservatism’s literature in Iran, we observe many studies on this concept. Still, no investigation is carried out on the relationship between conservatism in accounting and managerial entrenchment. The present study is innovative because it evaluates the relationship between managerial entrenchment and two types of conservatism, namely, balance sheet and income statement conservatism, which have never been investigated by prior studies, notably in emerging markets.

This study aims to investigate the effects of managerial overconfidence on conditional conservatism and real earnings management among companies listed on the Tehran Stock Exchange (TSE).

In this paper, the authors used the model of Ball and Shivakumar (2006) for measuring the effect of moderating overconfident management on conditional conservatism in accounting; moreover, the model of Roychowdhury (2006) is used for evaluating the relationship between managerial overconfidence and real earnings management. The study population consists of 1,144 observations and 143 firms listed on TSE over an eight-year period between 2008 and 2015. The statistical model used in this paper is a multivariate regression model; besides, the statistical technique used to test the hypotheses is panel data.

Consistent with the expectations, the results showed that there is a negative relationship between managerial overconfidence and conditional conservatism. Furthermore, the findings suggest that managerial overconfidence is negatively connected with real earnings management. This implies that when Iranian managers have many financial problems, they do not engage in real earnings management, as the real earnings management does not increase the value of the companies in the long run and even it cause damage to them.

This is one of the most important research that simultaneously surveys the impact of managerial overconfidence on conditional conservatism and real earnings management in a developing market called Iran. What really sets this study apart from other papers is that most Iranian firms between 2008 and 2015 because of economic sanctions faced severe financial problems. From this perspective, this study contributes to the research literature by expanding the knowledge of conservatism in the emerging economies.

The authors examine how a firm's strategic emphasis (SE) on value appropriation (VA) over value creation (VC) is associated with accounting conservatism.

To examine the effect of SE on a firm's adoption of conservative accounting practice, the authors measure SE as advertising expenses minus research and development (R&D) expenses scaled by total assets. The authors rely on the asymmetric timeliness of earnings from Basu (1997) to measure conditional conservatism and investigate how the incremental sensitivity of earnings to negative stock returns varies with the SE.

SE on VA over VC is found to be positively related to accounting conservatism since they want to deter entrants (i.e. competition adjustment) and to accommodate the tighter monitoring over the financial reporting system from stakeholders (i.e. risk adjustment). This argument is also supported by the additional cross-sectional tests based on the different level of market competition and external monitoring environment. In addition, the positive association between SE on VA over VC and accounting conservatism is less pronounced when managerial overconfidence is high.

Implication is that two important decisions (i.e. SE and accounting conservatism) are related with each other since both are to create competitive advantage and to maintain financial stability for a firm, and the relation differs by managerial characteristics.

This study highlights the differential roles of SE in shaping the conservatism in financial reporting and the importance of overconfidence in driving conservative accounting.

This paper aims to examine the effect of different modes of equity ownership structure in unconditional conservatism of financial reporting for non-financial listed companies in Egypt.

Using a large sample of Egyptian non-financial listed companies for the period from 2011–2018, this paper used the ordinary least square regression model to test the impact of equity ownership equity on accounting conservatism based on an accrual-based measure developed by Givoly and Hayn (2000) and Ahmed and Duellman (2007).

The paper finds that, on average, Egyptian listed companies tend to demonstrate lower levels of unconditional conservatism during the period from 2011–2018. Regarding the different patterns of equity shareholding, a negative association between unconditional conservatism and managerial ownership is found. Briefly, the mild equity shareholding of managers in Egyptian listed companies is accompanied by higher demand for conservative reporting. Besides, a negative association is also reported for the relationship between concentrated ownership and unconditional conservatism in which the concentration of shareholding by a few numbers of individual investors lessen the demand for conservatism. By contrast, a non-significance relationship is reported neither for institutional shareholders nor for governmental ownership in their relationship with unconditional conservatism.

The paper does not take into account the modifications conducted on the Egyptian accounting standards according to decree number 69 for the year of 2019 because they were not valid until the publishing of this paper. It considers only non-conditional conservatism.

First, the paper provides clear empirical evidence that Egyptian listed companies are adopting less-conservative accounting policies in their financial reporting during a high-tension period that witnessed several radical political and economic events. This evidence should stimulate regulators and policymakers to revisit the reporting standards to improve the quality of financial information and should also guide investors’ decisions because it helps in clarifying their interpretation of figures and trends reported in financial statements. Second, the paper would direct the attention of the Egyptian government to the importance of increasing their investment in the stock market to enhance its regulatory role. Third, it gives some implications to investors and policymakers toward the shape of the relationship between accounting conservatism and each pattern of equity shareholding in Egypt.

This paper visualizes an image toward the current state of equity ownership structure for listed companies in Egypt within a period that witnessed critical vulnerabilities and irregularities. In addition, it addresses how the accounting conservatism would be shaped according to the different types of equity shareholdings in Egypt.

This study investigates whether listed firms using equity incentive plans (EIPs) adopt more conservative accounting in China's unique corporate setting.

Based on a sample of 2,243 listed firms and 9,950 firm-year observations for the period of 2008–2017, this study employs piecewise cross-sectional regression models with year and industry fixed effects to examine the associations proposed in the research hypotheses.

This study finds a positive relationship between the adoption of EIPs and accounting conservatism in listed Chinese firms. Further analyses reveal that this positive relationship is more pronounced when listed Chinese firms use restricted stock units (RSUs), instead of stock options, in their EIPs.

Unlike many early studies, this paper empirically investigates the impacts of two different types of equity incentives – stock options and RSUs – and thus contributes to accounting and corporate governance literature by providing a better understanding of the impacts of different types of equity incentives on financial reporting quality. However, this study does not consider other alternative equity incentive measurements because of the limited data regarding Chinese firm's executive compensation.

This study offers investors and policymakers in China some insight into how accounting conservatism in listed firms might be shaped by equity incentives used in their managerial compensation schemes.

This study is one of the few that examines the effects of using equity incentives in a large emerging market. It offers support for the view that the recent introduction of policies on EIPs by the Chinese government has an overall positive impact on listed firm's financial reporting quality, as reflected by greater degrees of accounting conservatism.

Since 2018, there has been a resurgence in initial public offering (IPO) pricing studies. The authors aim to consolidate the knowledge and explore current dynamics, understand knowledge progression, elicit trends, and provide future research directions for IPO pricing research.

The authors conducted a two-stage hybrid review based on 512 high-quality Scopus articles on IPO pricing published over the last decade. The authors deploy bibliometric analysis, and then, based on 61 curated articles, the authors conduct content analysis and offer future research directions.

Four key research streams emerged: information asymmetry, agency problems, legal, regulatory, and social environment, and behavioral finance. Future research may focus on behavioral explanations for IPO underpricing, the role of investor sentiment in IPO pricing, text analytics, machine learning, and big data in alleviating information asymmetry and agency problems. The authors summarize and present content analysis using the classic Theory, Context, Characteristics, Methods (TCCM) framework.

Using different databases, bibliometric analysis tools, sample period or article screening criteria for the study might give different results. However, the study's major findings are robust to alternative choices.

This study serves as a ready reckoner for the research scholars, practitioners, regulators, policymakers, and investors interested in understanding the nuances of IPO pricing.

The study sheds light on the most influential documents, authors, and journals, offers an understanding of knowledge structure, identifies and discusses primary research streams and related implications, and provides future research directions.