The Interactive Effects between Business Life Cycle Stages and Accounting Conservatism: An Economic Value Added Perspective

• Main Authors: CHIEN YU MIN, 簡郁珉
• Other Authors: KAO LI HAN
• Format: Others
• Language: zh-TW
• Published: 2015
• Online Access: http://ndltd.ncl.edu.tw/handle/66547710730201587849

碩士 === 東吳大學 === 會計學系 === 103 === To identify whether accounting conservatism represents difference at distinct business developing stage, this study adopts empirical models from Collins, Hribar, and Tian (2012) and Basu (1997) for further examination. Nevertheless, the classification of lifecycle stages is still doubtful because of the indices for lifecycle categorizing could not reflect the changes of firm value adequately. Thus, this study replaces one index with economic value added as indicator for better classification in lifecycle stages. By adopting the interactive terms with business lifecycle stage and variables, the evidences show that asymmetric timeliness of earnings and asymmetric timeliness of cash flow in later business lifecycle stages are both higher than those in early stages. The results imply that firms are likely to maintain stable profitability by income smoothing in later stages. Besides, investors should not only pay more attention to accounting policies adopted by firms belong to later lifecycle stage, but also focus on evaluating earnings or cash flows of those firms to avoid underestimating the firm value.