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Has Australian financial reporting become more conservative over time?
Author(s) -
Lai Cheng,
Lu Meiting,
Shan Yaowen
Publication year - 2013
Publication title -
accounting and finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.645
H-Index - 49
eISSN - 1467-629X
pISSN - 0810-5391
DOI - 10.1111/j.1467-629x.2012.00480.x
Subject(s) - conservatism , accounting , sample (material) , international financial reporting standards , period (music) , business , economics , political science , law , chemistry , physics , chromatography , politics , acoustics
This study examines whether Australian financial reporting became more conservative over the period of 1993–2009. Unlike the United States and European evidence in Givoly and Hayn (2000) and Grambovas et al. (2006), the Australian evidence is not consistent with the notion that conservatism has increased over time. The degree of conservatism fluctuates without any obvious trend over the 17‐year period, especially for the constant sample of firms appearing throughout the period. We also examine the impact of mandatory International Financial Reporting Standards (IFRS) adoption on accounting conservatism in Australia. Our evidence suggests the adoption of IFRS has led to a decrease in conditional conservatism (i.e. asymmetric timeliness).