Conservatism in five South-American countries

Authors

  • Fábio Moraes da Costa Fundação Instituto Capixaba de Pesquisas em Contabilidade, Economia e Finanças
  • Alexsandro Broedel Lopes Universidade de São Paulo; Faculdade de Economia, Administração e Contabilidade; Departamento de Contabilidade e Atuária
  • Alessandra Cristina de Oliveira Costa Universidade de São Paulo; Faculdade de Economia, Administração e Contabilidade; Departamento de Contabilidade e Atuária

DOI:

https://doi.org/10.1590/S1519-70772006000200002

Keywords:

Conservatism, International Accounting, Basu Model

Abstract

This study was developed to evaluate how earnings reported in the financial statements incorporate stock returns of public companies from Argentina, Brazil, Colombia, Peru and Venezuela. Thus, the level of asymmetry on recognition of good and bad news was analyzed applying the Basu model (1997). Results indicate a low relationship between current earnings and current stock returns. This fact can be explained by the relationship between corporate governance models and their relationship with the value-relevance of accounting information taking into account the institutional environment. It must be highlighted that an asymmetric recognition was observed between good and bad news, indicating a certain level of conservatism on accounting earnings. This work contributes to reduce the existing gap on international literature regarding the role of accounting in developing countries.

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Published

2006-08-01

Issue

Vol. 17 No. 41 (2006)

Section

naodefinida

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How to Cite

Costa, F. M. da, Lopes, A. B., & Costa, A. C. de O. (2006). Conservatism in five South-American countries . Revista Contabilidade & Finanças, 17(41), 7-20. https://doi.org/10.1590/S1519-70772006000200002