Accounting Conservatism and the Market Value of Cash Holdings in Brazil
Autor(a) principal: | |
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Data de Publicação: | 2022 |
Outros Autores: | |
Tipo de documento: | Artigo |
Idioma: | eng por |
Título da fonte: | Revista Brasileira de Gestão de Negócios (Online) |
Texto Completo: | https://rbgn.fecap.br/RBGN/article/view/4182 |
Resumo: | Objective – To analyze the relationship between conservative accounting policies and the value that shareholders attribute to the cash holdings of publicly-traded companies in Brazil. Theoretical Framework – Cash holdings are the most vulnerable asset to the agent’s opportunistic actions. Part of the discussion in the literature on the topic concerns the possible mechanisms to align the interests between the agent and principal. However, little is known on whether accounting conservatism, as a governance mechanism and important attribute of financial reports, can mitigate part of the agency problems related to the use of cash holdings. Methodology – To analyze the market value of cash holdings we used the Pinkowitz, Stulz, and Williamson (2006) regression model. An accruals-based measure was used as a proxy for accounting conservatism. Results and Contributions – The evidence obtained indicates a positive association between conservative accounting policies and the market value of cash holdings. In general, the empirical evidence suggests that shareholders attribute a higher market value to the cash holdings of conservative companies. The study contributes to the literature by demonstrating that conservative accounting policies have the potential to provide organizations with real economic benefits, serving as a governance mechanism that reduces the agency problems associated with the use of cash. Impact on the Area – Presenting another benefit associated with accounting conservatism also helps in the discussion on conservatism in financial reports. This is relevant given the current debate on the merits of neutrality versus conservatism as a desirable characteristic of accounting numbers. Keywords – Corporate Governance; Cash Holdings; Audit Quality. |
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Accounting Conservatism and the Market Value of Cash Holdings in BrazilConservadorismo Contábil e o Valor de Mercado do Caixa no BrasilObjective – To analyze the relationship between conservative accounting policies and the value that shareholders attribute to the cash holdings of publicly-traded companies in Brazil. Theoretical Framework – Cash holdings are the most vulnerable asset to the agent’s opportunistic actions. Part of the discussion in the literature on the topic concerns the possible mechanisms to align the interests between the agent and principal. However, little is known on whether accounting conservatism, as a governance mechanism and important attribute of financial reports, can mitigate part of the agency problems related to the use of cash holdings. Methodology – To analyze the market value of cash holdings we used the Pinkowitz, Stulz, and Williamson (2006) regression model. An accruals-based measure was used as a proxy for accounting conservatism. Results and Contributions – The evidence obtained indicates a positive association between conservative accounting policies and the market value of cash holdings. In general, the empirical evidence suggests that shareholders attribute a higher market value to the cash holdings of conservative companies. The study contributes to the literature by demonstrating that conservative accounting policies have the potential to provide organizations with real economic benefits, serving as a governance mechanism that reduces the agency problems associated with the use of cash. Impact on the Area – Presenting another benefit associated with accounting conservatism also helps in the discussion on conservatism in financial reports. This is relevant given the current debate on the merits of neutrality versus conservatism as a desirable characteristic of accounting numbers. Keywords – Corporate Governance; Cash Holdings; Audit Quality.Objetivo – Analisar a relação entre políticas contábeis conservadoras e o valorque os acionistas atribuem para o caixa das empresas de capital aberto no Brasil. Referencial teórico – O caixa é o ativo mais vulnerável às ações oportunistas doagente. Parte da discussão da literatura sobre o tema diz respeito aos possíveismecanismos para alinhar os interesses entre agente e principal. Entretanto, poucose sabe se o conservadorismo contábil, como um mecanismo de governança e umatributo importante dos relatórios financeiros, pode mitigar parte dos problemas de agência relacionados ao uso do caixa. Metodologia – Para analisar o valorde mercado do caixa, utilizamos o modelo de regressão de Pinkowitz, Stulz eWilliamson (2006). Uma medida baseada nos accruals foi utilizada como proxydo conservadorismo contábil. Resultados – As evidências obtidas indicam uma associação positiva entre políticas contábeis conservadoras e o valor de mercado do caixa. De forma geral, as evidências empíricas sugerem que os acionistas atribuem um maior valor de mercado para o caixa das empresas conservadoras. Implicações práticas e sociais da pesquisa – Apresentar outro benefícioassociado ao conservadorismo contábil também auxilia na discussão acerca doconservadorismo nos relatórios financeiros. Tal fato é relevante dado o debate emcurso sobre os méritos da neutralidade em oposição ao conservadorismo comouma característica desejável dos números contábeis. Contribuições – O estudocontribui com a literatura ao demonstrar que políticas contábeis conservadorastêm o potencial de trazer benefícios econômicos reais para as organizações,servindo como um mecanismo de governança que reduz os problemas de agência associados ao uso do caixa. Palavras-chave: Governança corporativa, cash holdings, qualidade da auditoria.FECAP2022-06-30info:eu-repo/semantics/articleinfo:eu-repo/semantics/publishedVersionAvaliado por paresapplication/pdfapplication/pdfhttps://rbgn.fecap.br/RBGN/article/view/4182Review of Business Management; Vol. 24 No. 2 (2022)RBGN Revista Brasileira de Gestão de Negócios; Vol. 24 Núm. 2 (2022)RBGN - Revista Brasileira de Gestão de Negócios; v. 24 n. 2 (2022)1983-08071806-4892reponame:Revista Brasileira de Gestão de Negócios (Online)instname:Fundação Escola de Comércio Álvares Penteado (FECAP)instacron:FECAPengporhttps://rbgn.fecap.br/RBGN/article/view/4182/1831https://rbgn.fecap.br/RBGN/article/view/4182/1832Augusto Silva Manoel, Aviner Botelho da Costa Moraes, Marceloinfo:eu-repo/semantics/openAccess2023-07-28T18:21:13Zoai:ojs.emnuvens.com.br:article/4182Revistahttp://rbgn.fecap.br/RBGN/indexhttps://rbgn.fecap.br/RBGN/oai||jmauricio@fecap.br1983-08071806-4892opendoar:2023-07-28T18:21:13Revista Brasileira de Gestão de Negócios (Online) - Fundação Escola de Comércio Álvares Penteado (FECAP)false |
dc.title.none.fl_str_mv |
Accounting Conservatism and the Market Value of Cash Holdings in Brazil Conservadorismo Contábil e o Valor de Mercado do Caixa no Brasil |
title |
Accounting Conservatism and the Market Value of Cash Holdings in Brazil |
spellingShingle |
Accounting Conservatism and the Market Value of Cash Holdings in Brazil Augusto Silva Manoel, Aviner |
title_short |
Accounting Conservatism and the Market Value of Cash Holdings in Brazil |
title_full |
Accounting Conservatism and the Market Value of Cash Holdings in Brazil |
title_fullStr |
Accounting Conservatism and the Market Value of Cash Holdings in Brazil |
title_full_unstemmed |
Accounting Conservatism and the Market Value of Cash Holdings in Brazil |
title_sort |
Accounting Conservatism and the Market Value of Cash Holdings in Brazil |
author |
Augusto Silva Manoel, Aviner |
author_facet |
Augusto Silva Manoel, Aviner Botelho da Costa Moraes, Marcelo |
author_role |
author |
author2 |
Botelho da Costa Moraes, Marcelo |
author2_role |
author |
dc.contributor.author.fl_str_mv |
Augusto Silva Manoel, Aviner Botelho da Costa Moraes, Marcelo |
description |
Objective – To analyze the relationship between conservative accounting policies and the value that shareholders attribute to the cash holdings of publicly-traded companies in Brazil. Theoretical Framework – Cash holdings are the most vulnerable asset to the agent’s opportunistic actions. Part of the discussion in the literature on the topic concerns the possible mechanisms to align the interests between the agent and principal. However, little is known on whether accounting conservatism, as a governance mechanism and important attribute of financial reports, can mitigate part of the agency problems related to the use of cash holdings. Methodology – To analyze the market value of cash holdings we used the Pinkowitz, Stulz, and Williamson (2006) regression model. An accruals-based measure was used as a proxy for accounting conservatism. Results and Contributions – The evidence obtained indicates a positive association between conservative accounting policies and the market value of cash holdings. In general, the empirical evidence suggests that shareholders attribute a higher market value to the cash holdings of conservative companies. The study contributes to the literature by demonstrating that conservative accounting policies have the potential to provide organizations with real economic benefits, serving as a governance mechanism that reduces the agency problems associated with the use of cash. Impact on the Area – Presenting another benefit associated with accounting conservatism also helps in the discussion on conservatism in financial reports. This is relevant given the current debate on the merits of neutrality versus conservatism as a desirable characteristic of accounting numbers. Keywords – Corporate Governance; Cash Holdings; Audit Quality. |
publishDate |
2022 |
dc.date.none.fl_str_mv |
2022-06-30 |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article info:eu-repo/semantics/publishedVersion Avaliado por pares |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
https://rbgn.fecap.br/RBGN/article/view/4182 |
url |
https://rbgn.fecap.br/RBGN/article/view/4182 |
dc.language.iso.fl_str_mv |
eng por |
language |
eng por |
dc.relation.none.fl_str_mv |
https://rbgn.fecap.br/RBGN/article/view/4182/1831 https://rbgn.fecap.br/RBGN/article/view/4182/1832 |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
application/pdf application/pdf |
dc.publisher.none.fl_str_mv |
FECAP |
publisher.none.fl_str_mv |
FECAP |
dc.source.none.fl_str_mv |
Review of Business Management; Vol. 24 No. 2 (2022) RBGN Revista Brasileira de Gestão de Negócios; Vol. 24 Núm. 2 (2022) RBGN - Revista Brasileira de Gestão de Negócios; v. 24 n. 2 (2022) 1983-0807 1806-4892 reponame:Revista Brasileira de Gestão de Negócios (Online) instname:Fundação Escola de Comércio Álvares Penteado (FECAP) instacron:FECAP |
instname_str |
Fundação Escola de Comércio Álvares Penteado (FECAP) |
instacron_str |
FECAP |
institution |
FECAP |
reponame_str |
Revista Brasileira de Gestão de Negócios (Online) |
collection |
Revista Brasileira de Gestão de Negócios (Online) |
repository.name.fl_str_mv |
Revista Brasileira de Gestão de Negócios (Online) - Fundação Escola de Comércio Álvares Penteado (FECAP) |
repository.mail.fl_str_mv |
||jmauricio@fecap.br |
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