An income strategy approach to the positive theory of accounting standard setting/choice

Zmijewski, Mark E.; Hagerman, Robert L.

doi:10.1016/0165-4101(81)90010-0

Cited by 365 publications

(194 citation statements)

References 13 publications

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“…An essential aspect of a research into a business activity must include the firm size (Zadeh & Eskandari, 2012). Al-Khazali and Zoubi (2005) reported that accounting studies used size of the firms to explain differences across firms in their methods of accounting and decisions related to corporate disclosures (Jensen & Meckling, 1978;Deakin, 1979, Collins, Rozeff & Dhaliwal, 1981Zmijewski & Hagerman, 1981;Zimmerman, 1983;Hughes & Ricks, 1984;and Shehata, 1991). For example, Shehata (1991) has used the total sales as firm size.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Association between Degree of Leverages and Firm Value

Gupta

Kumar²,

Verma³

2016

AJFA

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This study aims to empirically investigate the association between degree of leverages, operating and financial, and firm value in the context of India, one of big ten emerging markets (Garten, 1997). This study examines this association for 231 manufacturing firms listed in National Stock Exchange (NSE) in India over a period from 2001-2002 to 2010-2011. The independent variables, degrees of operating and financial leverage, and a market price-based dependent variable, called price-earnings ratio as a proxy of firm value, are taken to examine this relationship by using standard ordinary least square regression Asian Journal of Finance & Accounting ISSN 1946-052X 2016 ajfa.macrothink.org 213 models at the levels of individual firm and portfolio of firms. The findings of this study show a statistically significant negative relationship between firm value and degree of operating leverage and a statistically insignificant relationship between firm value and degree of financial leverage both at the levels of individual firm and portfolio of firms. Using the data from a country like India, one of fastest growing emerging markets in the world, this study provides an important insight on the effect of leverages on the firm value, the association between independent accounting variables and stock price-based dependent variable, to the practitioners, the scholars and the finance managers.

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Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Association between Degree of Leverages and Firm Value

Gupta

Kumar²,

Verma³

2016

AJFA

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“…The effect of accounting method on income or income strategy depends on measurements and recognition of a standard. We define income strategy as a portfolio or combination of accounting policies which may increase or decrease reporting income (Missonier, 2004;Inoue & Thomas, 1996;Zmijewski & Hagerman, 1981). The income strategy as a variable is the ratio of the number of income increasing accounting policies divided by the total number of accounting policies used by a company (i.e.…”

Section: Income Strategy Measurementmentioning

confidence: 99%

“…Second, in a review article, Fields, Lys and Vincent (2001) criticise previous studies for their focus on single accounting policy choices and propose that research should consider examining several accounting method choices simultaneously as in Zmijewski and Hagerman (1981) to improve understanding.…”

Section: Introductionmentioning

confidence: 99%

Determinants of different accounting methods choice in Tanzania

Waweru

Ntui

Mangena

2011

Journal of Accounting in Emerging Economies

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PurposeThe purpose of this paper is to examine the factors that determine the choice of multiple accounting methods in Tanzania. The study investigates managers' decisions to choose accounting methods in a positive accounting theory perspective using panel data covering 60 years from 15 companies listed on the Dar es Salaam Stock Exchange.Design/methodology/approachData were extracted from the companies' annual reports. Possible determinants of the choice of accounting methods are identified based on the positive accounting theory, including firm size, leverage, internal financing, proportion of non‐executive directors, ownership dilution, and labour force intensity. The study then utilises multiple regression analysis to determine the significant factors influencing the manager's choice of accounting methods.FindingsThe results show that the significant factors are company size, internal financing, proportion of non‐executive directors, and labour force. Contrary to the outcome of prior studies, the authors found that company size and internal financing are positively related with income strategy. The study proves statistically that there is a strong association between choice of accounting methods and income strategy.Originality/valueThe paper makes several contributions to the body of knowledge. First, in the Tanzanian context, it determines the factors which affect choice of accounting methods. Second, the study identifies the proportion of non‐executive directors as a new factor impinging on the choice of accounting policies. Finally, this study shows for the first time that the use of ratio of income‐increasing accounting policies to total number of accounting policies can be used as a dependent variable.

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“…Le contrôle de la taille d'une firme, à travers la variable TAIL vient du fait que la firme de grande taille pratique souvent une comptabilité plus conservatrice (Zmijewski et Hagerman, 1981). En effet, les firmes de grande taille engagent généralement des coûts politiques élevés.…”

Section: Test De La Première Hypothèseunclassified

Conservatisme comptable et coût de la dette : étude sur un échantillon d’entreprises canadiennes

Zarai¹,

Abderrahim²

2017

gouvernance

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L’objectif de cette recherche est d’étudier l’impact du conservatisme comptable sur le coût de la dette de la firme. Nous avons utilisé deux modèles pour mesurer le conservatisme comptable à savoir le modèle de Basu (1997), et le modèle de Beaver et Ryan (2000). Sur la base d’un échantillon composé de 85 entreprises canadiennes, nous avons soulevé l’influence du conservatisme comptable sur le coût de la dette. Nos résultats empiriques confirment le fait que, le conservatisme comptable joue un rôle important dans l’atténuation des conflits d’intérêts entre actionnaires et créanciers. En effet, cette évidence nous a guidé pour tester l’influence du conservatisme comptable sur le coût de la dette de la firme. Nous avons trouvé que le conservatisme comptable affecte négativement le coût de la dette.The objective of this research is to study the impact of accounting conservatism on the cost of the debt of the firm. We used two models to measure the accounting conservatism : Basu (1997), and Beaver and Ryan (2000). Basing on a sample of 85 Canadian firms, we found that accounting conservatism influenced the cost of debt. Our empirical results confirm the fact that, accounting conservatism plays an important role in mitigating interest conflicts between shareholders and stockholders. Indeed, this guided us to test the influence of accounting conservatism on the cost of the debt of the firm. We found that accounting conservatism affects the cost of the debt negatively

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An income strategy approach to the positive theory of accounting standard setting/choice

Cited by 365 publications

References 13 publications

Association between Degree of Leverages and Firm Value

Association between Degree of Leverages and Firm Value

Determinants of different accounting methods choice in Tanzania

Conservatisme comptable et coût de la dette : étude sur un échantillon d’entreprises canadiennes

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