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Optimal accounting policies under financial constraints: aggressive versus conservative

Author

Listed:
  • Masatomo Akita

    (Graduate School of Economics, Osaka University)

  • Yusuke Osaki

    (Faculty of Economics, Osaka Sangyo University)

Abstract

We examine how severity of financial constraints influences firms' choices of accounting policies. This paper shows that firms with mild financial constraints choose an aggressive accounting policy and those with severe financial constraints choose a conservative accounting policy.

Suggested Citation

  • Masatomo Akita & Yusuke Osaki, 2011. "Optimal accounting policies under financial constraints: aggressive versus conservative," Economics Bulletin, AccessEcon, vol. 31(4), pages 3179-3191.
    • Handle: RePEc:ebl:ecbull:eb-11-00166
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2011/Volume31/EB-11-V31-I4-P288.pdf
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    References listed on IDEAS

    as
    1. Basu, S., 1995. "Conservatism and the Asymmetric Timeliness of Earning," Papers 73, Rochester, Business - Ph.D.,.
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    More about this item

    Keywords

    accounting policy; financial constraints;

    JEL classification:

    • M4 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty

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