Abstract:Purpose
This study aims to investigate the impact of accounting regulation (AR) on good news (GNs) recognition and conditional conservatism (CC), using the Chinese experiment in the 2006 AR.
Design/methodology/approach
The current study applies the Basu (1997) model to a sample of 26,755 firm-year observations from 1997 to 2017.
Findings
The study finds that GNs recognition is significantly reduced and becomes significantly less than bad news recognition under China’s 2006 AR, suggesting that CC is enhance… Show more
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